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We’re tweaking the Flagship Growth Portfolio today making a relative performance call. While we like VOC and see it higher over time, we need to make room for VUK, which we think can have a more explosive move.
Last week’s pullback now seems a distant memory as the market roars back to life, the ‘Robinhood Rout’ seemed to be a convenient excuse for the market to have a break, rinse out the weak longs before the reality of low interest rates and abundant stimulus once again becomes the dominate theme.
The ASX200 enjoyed an extremely bullish turnaround to kick off both the week and February, after being down 90-points late morning the sentiment turned on a sixpence as “risk on” prevailed across the board – on the local bourse we finally closed up almost 1% with 60% of the market rallying led by the Healthcare & Resources Sectors. Elsewhere Asia followed suit with most major indices gaining over 2% while silver soared over 10% to make an 8-year high as the “Reddit Army” turned its attention to commodities – as we keep saying volatility is set to rule in 2021.
A strong turnaround from stocks today after trading sharply lower in early trade. At its worst the ASX 200 was down -90pts hitting a low of 6517 smack on 11am. It’s uncanny how often the market makes a pivot point around 11am after margin calls filter through early, stocks get dumped and then cooler heads prevail. We’d been targeting a move down to 6500 and todays bounce (for now at least) from that level looks a solid one as the intra-day chart below clearly shows
Over the weekend the market news was mildly negative in my opinion as 80% of WA’s population went into a COVID lockdown for the first time in over 6-months. A new case has been recorded of the potentially highly infectious UK strain of the virus by a hotel guard who never actually entered a hotel room.
The ASX200 has just endued its worst week since October finally closing down almost 3%, we’ve mentioned a few times this month that our “Gut Feel” has been the next ~5% move for stocks would be down, although we remain bullish, things now appear to be following our 2021 roadmap – on an index level we will be keen buyers around the 6500 level.
The day started on the front foot with most stocks/sectors rebounding after yesterday’s deep slide but the best of it was certainly seen early. The ASX200 hit its peak at around 10.30am, topping 80pts higher before a slow and steady wave of selling set in for the rest of the session. At its worst, the index was down -64pts, breaking through the 6600-support level before some bulls returned from lunch and softened the blow.
The ASX200 was smacked almost 2% yesterday with close to 90% of the market closing down on the day, declines were led by the IT Sector which tumbled almost 5% with Xero (XRO), Afterpay (APT) and Wisetech (WTC) all closing more than 6% lower. The rhetoric in many news stories was pointing the finger at earnings disappointments and concerns around valuations following sharp drops on overseas bourses, falls which we felt were initially triggered by potential hurdles around the European vaccine rollout.
The GameStop effect took hold of the local market today, with the ASX falling 130pts, the most in more than 3 months as markets globally took notice of the targeted buying of GameStop overnight. For those that missed the news, a group from an online forum took on a number of funds that had shorted shares in the US listed video game retailer, bidding up the stock in a frenzy which eventually saw shares in the struggling company more than double overnight on its fourth consecutive day of gains.
The ASX200 struggled yesterday finally closing down 44-points, or 0.65%, it felt worse at the time but when less than 60% of the index falls the drop is rarely too severe.
