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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%.
The Match Out: ASX flat, Inflation higher again – bond yields rally, A2 Milk (A2M) downplays growth,
A lot happening on the corporate front today as AGMs and trading updates dominated news flow, while we also saw higher than expected local inflation data push bond yields higher and knock equities lower, although stocks staged a recovery in the afternoon.
The ASX200 again tried to push higher early on Tuesday only to drift through the afternoon, this style of price action might often concern us but the local market just feels a little stretched this month, we still anticipate fresh highs into November / Christmas. All the action on Tuesday was on the stock / sector level as lithium stocks rallied while gold stocks gave back some of their recent gains but overall it was a quiet day as we see slowly & quietly say goodbye to October.
The ASX opened higher this morning however the best of it was seen early and the market tracked lower throughout the day. Positive trends in the tech pace overnight flowed through into our market today with the tech stocks +1.34% while the utilities sector was the biggest drag. Overall, a weak session and the market does look tired in the short term as we approach the end of October.
The ASX200 kicked off the last week of October in solid form rallying to new monthly highs in the morning before finally managing to close up 0.3% even as more stocks actually closed in negative territory. The resources names, led by the energy component, were the best on ground while the tech sector slipped lower but overall it was another quiet session as investors appear reticent to buy into strength, they must have read our notes!
