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The ASX200 enjoyed a solid Thursday courtesy of ongoing strength in banks and resources with heavyweights BHP Group (BHP) & RIO Tinto (RIO) both gaining around 4%. Losers marginally trumped the winners but when the indexes 2 largest sectors, which make up around 40% of the market rally the index tends to follow suit. Blackstone’s increased bid for Crown Resorts (CWN) also helped market sentiment as it demonstrated that M&A remains alive and well for undervalued assets arguably creating a bid into any decent sell-offs in risk assets.
A positive day for the ASX with another session where material stocks supported the market with the sector enjoying strong showings from Iron Ore, Lithium & Copper, while Blackstone have finally bid up for Crown (CWN) with a deal looking likely at $13.10.
The ASX200 sprang back to life on Wednesday finally closing up 0.7% as the Energy Sector led almost 70% of the market higher, we’re almost half way through January and the main Australian index is down just 5-points year-to-date as the lack of direction over the last 6-months continues unabated. The tech names finally took some notice from the recovery by US names producing the days 2nd best performance with Appen (APX) and Life360 (360) both advancing well over 5%.
The Match Out: ASX rallies, Energy stocks fly while IT bounces back, First video update for the year
A strong showing by Energy & Technology shares helped the ASX recover the majority of yesterdays losses today, although the best of the session was seen early on before the ‘sell the pop’ mentality became evident. Crude Oil rallied ~4% overnight to trade above $US80/bbl and remains bullish while lower yields helped a bounce back in tech.
We are making some amendments to portfolios:
Flagship Growth: Selling Fortescue Metals (FMG) & Buying Goodman Group (GMG)
Emerging Companies: Buying Whisper (WSP)
Macro ETF: Selling TBF and adding to Sprott Physical Uranium Trust (U-U CN)
Tuesday saw the Australian market slip -0.8% on broad selling with 70% of the index closing in negative territory but come 4pm we remained around 7400, just as we did when MM delivered its previous Portfolio Positioning Report back on the 22nd December. After the NASDAQ’s excellent recovery on Monday night we thought the Australian Tech Sector would have regained some of their recent losses but it still struggled with most stocks reversing lower after a promising open, it feels like local investors will take more convincing to overcome inflation…
A weak session for Aussie stocks today underperforming most Asian markets while US Futures were also fairly muted throughout our session. Weakness was widespread with only the Material stocks closing a few ticks into the green. Supply chain issues are starting to hurt and this is evident amongst the supermarkets and the companies that supply them, Inghams (ING) the latest to flag production problems.
The ASX200 drifted marginally lower yesterday with the value names continuing to support the index while the broader index drifted lower under the weight of increasing concerns around rising bond yields and inflation. While the banks were firm the Resources Sector was the standout for MM with influential stocks like BHP Group (BHP), RIO Tinto (RIO) and South32 (S32) all advancing over 2% – MM expects more of the same over the coming weeks but if we are correct this year will not be a one trick pony.
It was actually an interesting trading session today at the stock level despite the index finishing little changed. The high value (tech & others) were sold off fairly hard this morning before most bounced while there was also some aggressive buying in some of the ‘dogs’ of 2021, a strategy that often pays dividends – commonly called the ‘Dogs of the Dow’ where investors buy the underperformers of the past 12 months.
It’s great to be back on deck and a special welcome to our new subscribers who came on board over Christmas. As refresher to new and old, our report schedule is as follows:
