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We are making changes to both the Emerging Companies Portfolio & the Global ETF Portfolio today
The ASX200 closed marginally higher on Tuesday as it continued to hover around the 7500 level, the number of winners & losers almost exactly matched with only 1% of stocks moving by over 5% i.e. there was little on the stock level to excite investors following the Labor Day holiday in the US. However on the macro / news level there was a couple of interesting events catching our attention:
The market continued to follow a very similar path to home schooling in the Gerrish house hold of late, the low set in the morning – perhaps deeper than most feared before a recovery plays out later in the session and we close at the high point of the day. Today that was up just 1pt for the ASX 200 as the market continues to consolidate it’s recent ~200pt pullback. As we highlighted this morning, the previous pullback back in June / July took 6-weeks…
The ASX200 again rallied strongly after briefly dipping below the 7450 level – I’m almost getting bored of saying “buy the dip” but yet again the local market found a low just as Gladys delivered the NSW’s COVID statistics before enjoying solid buying throughout the day to reverse early loses and close marginally higher, a +1.2% intraday turnaround. Very similar to the trend in home schoolings, the low is certainly formed in the AM before a recovery plays out in the PM! Yesterday it was the unusual combination of IT, Gold and Reopening stocks led…
While a +5pt gain at the index level implies a lacklustre session, there was a lot happening under the hood + it was a major turnaround from early weakness which had the market hit a 7440 low before rallying unabated to close at 7528, a +88pt turnaround as the wall of money buys weakness. That is very typical of a strong market and while some will list all the entertaining reasons for a market top, the trend remains up and that’s all…
The ASX200 is a few days into what’s been a very quiet start to September, over the last decade August & September have combined to fall an average of -3.8% but last month’s +1.9% advance should have already warned statisticians that there’s nothing normal about the strength of the post COVID stock market rally – at MM we’re sticking with the trend of “Buy the dips but only fade the “pops” to new highs”. A quick comparison to the current rally with the one after the GFC illustrates…
The ASX200 has commenced September in similar fashion to most of the year, if the rhythm remains the same we are likely to see a breach of 7700 before we enter the final quarter of 2021. This weeks small gain was spearheaded by an aggressive advance by the medium size resource stocks e.g. Alumina (AWC) +19%, Whitehaven Coal (WHC) +18% and South32 (S32) + 13% who appeared to embrace any stabilisation by the commodities markets.
A solid end to the week with the ASX having a choppy but positive session on a beautiful spring day in Sydney. Resource stocks led the way today with the IT names lagged, a similar sort of session overseas last night with the cyclicals coming back into favour after stalling recently. The uranium stocks were on fire today while the rest of the commodity complex was strong. For the week, the ASX 200 added ~0.50% although there was significant influence from dividends.
The ASX200 slipped -0.55% yesterday but once we take out the huge dividends delivered to happy investors the market actually hardly moved e.g. BHP Group (BHP) $2.74, CSL Ltd (CSL) $1.64, Woolworths (WOW) 55c and Perpetual (PPT) 96c. Importantly these funds will drop into shareholders bank accounts around the end of September / start of October providing yet another tailwind for this already resilient market i.e. a significant portion of investors simply reinvest their dividends back into the market…
A similar session to yesterday with the market opening sharply lower before fighting back throughout the day – the buy the dip mentality still very much alive and well. Two index heavyweights traded ex-dividend today, namely BHP & CSL and while the ASX 200 closed down 41points, ~30points of that move was dividend related.
