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The ASX200 climbed impressively from its lunchtime low yesterday to end the session down just 0.3%, not a bad effort considering the weak leads from the US and Europe. Over 70% of the market closed in the red but the losses were concentrated in the less influential tech stocks enabling the major index to remain resilient as the “buy the dip” mentality remerged – one day doesn’t make a summer but MM believes the markets looking good for an October rally.
The ASX opened better than the overnight market was implying this morning before a sell-off in US Futures saw the index drop around ~60pts between 11am – midday before an RBA inspired recovery played out into the afternoon – a choppy session! Higher interest rates globally has been putting downward pressure on Tech stocks and that was the obvious theme again in Australia today – IT down ~3% versus Energy which was up another ~2.4%.
The ASX200 kicked off the week with a bang even though many of us enjoyed a long weekend – a sunny one in Sydney. It’s not often you see CBA rally over 5% in one day but a heavily oversubscribed $6bn buyback, which represents 3.8% of the banks issued capital, was enough to the send the stock within a few percent of its all time high, there were a couple of simple but important points for investors to consider & enjoy:
The ASX is set to rise ~50 points this morning recouping about a 1/3rd of Fridays aggressive 2% decline. Much of the country is enjoying a public Holiday Monday today although the ASX remains open. Market Matters is off today however we’ll be back tomorrow with our usual Macro Monday Report (on Tuesday).
The AX200 waved goodbye to September on a positive note only for October to start with a 2% plunge, history tells us this is usually an excellent time to start accumulating stocks but as is always the case near lows equities certainly feel vulnerable to further declines. Investors have started considering the attractive dividends on offer from the banks in November plus of course the much anticipated “Santa Claus Rally” but there are a couple of important hurdles to be cleared
The ASX suffered a brutal session following US Indices lower to start the 2nd quarter of FY22. Infighting in the Democrats appear to threaten both infrastructure spending and an increase to the Government borrowing cap. We have seen all of this before, it’s political posturing that generally gets resolved however the infrastructure package is very important which is the curve ball in these negotiations.
The ASX200 finally found its mojo on the last day of September rallying 1.88% on broad based buying which ultimately saw 86% of stocks close in positive territory, the “Big 4” banks caught my attention gaining an average of 2.4% – perhaps we have a clue as to what sector could drag the index to fresh highs, as we said yesterday moving forward the heavy liftings likely to be relatively concentrated. COVID has already become old news as far as financial markets are concerned, Thursday saw awful…
The market ended a soft month of September with a bang today rallying ~1.9% with broad based buying right across the board and a very bullish close to finish on the daily and weekly highs, smashing back up through 7300 in the process.
As we approach Q4 the question being asked by many is can the AX200 again rise from the ashes, yesterday it was battered for the 2nd successive day as September looks set to live up to its bearish reputation, the index is sitting down 4.5% with just today’s session remaining. Stocks have been caught with a classic “1-2 combination” as the deteriorating macro picture threatens to derail the liquidity driven bull market:
Another weak session today saw the ASX end down more than 1% – the same culprits dragging the ASX lower, IT & Healthcare however Energy was also on the wrong side of the ledger today after a very strong run of late. As we discussed this morning, bond yields trading at 3 month highs is starting to unnerve investors while J Powell’s commentary around higher inflation further fueled that view.
