Archives: Reports
While the short odds favourite failed to get up in the cup today, the decision by the RBA at 2.30pm this afternoon to scrap yield targets and remove guidance for 2024 rate hikes was expected and that saw both bond yields and the AUD tick lower post the announcement.
The ASX was soft during early trade today, it bounced as the RBA took some uncertainty away but that didn’t last long and we sold off into the close, the material stocks providing the biggest drag as China facing commodities took a beating, Iron Ore limit down and Coal prices continued to slide. Don’t fight the PBOC the clear message at the moment!
Monday saw some healthy intra-day strength within the iron ore names and we feel they are now at or very close to a low hence making them excellent risk / reward buys – probably the question I’ve heard the most over recent weeks has been “when should we buy BHP, RIO, FMG etc” , MM thinks the answer is basically now. If the banks can regain their mojo sooner rather than later then we feel the ASX will be looking good into Christmas assuming there are no hand grenades lobbed in the market by the RBA at 2.30pm today, after which of course the nation has just 30-minutes to digest the news before casting there eyes to the nearest TV screen to watch 24 horses run 3200m in around 3.3 minutes – apparently, Incentivise is going to win!
The market got off to a very indecisive start today, giving up early gains to trade just marginally higher by 10.30am before buyers step up to the plate & carried the index higher. The financials sector was weighed by a poor FY21 report from Westpac (WBC), however it was the only sector to close lower on the day
The ASX 200 finished up 47pts/+0.64% today at 7470
Financials were the only sector to finish lower (-0.48%) on the back of weakness in Westpac (WBC) while the telco’s were supported by a strong move by Telstra (TLS)
Australian stocks succumbed to the ever increasing weight of interest rate speculation on Friday, the aggressive weakness on the last day of October actually resulted in it being a down month. Fortunately the US reversed losses by their futures during our time zone to make fresh highs on Friday which should provide a much needed boost to stocks this morning – the SPI futures are pointing to early gains of almost 1%. The specific pressures around the RBA appear to be the reason for the ASX’s position in the underperformance corner last month:
The AX200 was clobbered 1.44% on Friday to send the local index into the red for both the week and month, things were looking good on the open but the combination “end of month shenanigans” and bond market turmoil appeared to finally take its toll. There’s no doubt the last week of October 2021 will be remembered by all interest rate traders as the time the market kicked the RBA’s butt, whether its simply Round 1 or the end of Philip Lowes fixation on 2024 before we see higher Australian interest rates only time will tell
A very weak session to end the month with all sectors on the ASX finishing weaker, the Real-Estate stocks hit hardest on the expectation of rising interest rates curtailing asset prices while Healthcare stocks proved defensive down by just 0.10%. For the month of October, the market still managed a gain of 1.92% with 5 sectors outperforming the broader market led by the Financials & IT sectors up +3.66% & +3.18% respectively, while…
The ASX200 slipped 0.25% yesterday but considering the generally negative leads from overseas indices and sheer panic that washed through Australian interest rate markets it actually felt like a solid performance. The selling frenzy that’s washed through bonds this week feels akin to how stocks plummeted when COVID first raised its head although its coverage is primarily limited to the financial press, for now:
While the market was lower overall today, there was some big moves in individual stocks and unfortunately we were on the wrong side of a few – more on that below. At the sector level, financials grinded higher following FY results from ANZ that showed a 72% rise in profit while the energy sector was the biggest drag, hit by weakness overnight in Oil + China’s move this morning to cap thermal coal prices.
We are cutting Crown (CWN) to buy Resmed (RMD) & switching IAG into QBE Insurance (QBE)
The ASX200 climbed to fresh October highs yesterday morning only to get clobbered at 11.30am when markets saw Australia’s inflation rate significantly surprise on the upside – the RBA’s preferred gauge, the CPI trimmed mean YoY, came in at 2.1% for the 3rd quarter compared to expectations of 1.8%, importantly the economy is rapidly approaching the RBA’s 2-3% target band for the first time since 2015 when the cash rate averaged over 2% compared to todays 0.1%.
