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A choppy but ultimately positive session for the ASX today with the IT stocks offering most support while the Industrials lagged. The key Materials & Financials sectors were more muted today ahead of some key results tomorrow, including Commonwealth Bank (CBA).
The ASX200 tried hard to rally yesterday but the selling across the “re-opening trade” and Resources Sector offset the strength in the Banking Sector, pretty much in line with our expectations flagged in yesterday’s report. MM has been bullish the banks for months and yesterday saw the Insurance Sector join the “rising bond yield” party, we like both the Banking & Insurance Sectors at this stage of the bond yield cycle although our medium-term target for Commonwealth Bank (CBA) is now only 5% away as we…
The ASX gave back early gains to finish flat today, the financials followed their US counterparts higher to be best on ground while the materials suffered at the hands of a rising $US. Earnings season heats up this week with FY21 results coming through thick and fast – I love this time of year!
The ASX200 has surged out of the blocks to kick off August, following gains by the SPI on Friday it’s poised to open around 7570 this morning, up around 150-points / 2% after just 9-days – remember if we maintain the rhythm of 2021 the index should test 7650-7700 this month. Last weeks gains were broad based with only the Resources Sector closing lower while the combination of strong financials and soaring tech stocks contributed the most to our gains, we believe the banks et al will lead the performance this week assuming Commonwealth Bank (CBA) reports well on Wednesday.
Global equities continue to follow good old fashioned corporate earnings while dismissing short-term worries around COVID along the way. Bull markets view news flow through rose coloured glasses and that’s exactly what local stocks have enjoyed since their latest rally commenced back in 2020, 10-months and an impressive 1747-points / 30% ago:
A very quiet day for the index, trading in a tight ~25pt range for the most part before a lunge higher on the close. The sector level was a different story though with tech continuing to be dragged higher by Afterpay (APT) while materials offset strong gains elsewhere, finishing 1.2% lower on weak iron ore prices. The index was up almost 2% this week – on a tear.
We are selling Rhipe from the Emerging Companies Portfolio, along with Ping An & buying Deere & Co in the International Equities Portfolio.
Thursday delivered a steady session for the ASX200 which finally closed at another new all-time high although it didn’t feel like that sort of day with no stocks moving in either direction by more than 3.5%. If we were to try and dissect the meagre +0.1% advance it would be a case of gains by the Banks and Real Estate stocks was more than enough to offset losses in the Resources names. The market feels like it’s slowly starting to accept the new 7500 handle just as it did 7200-7400 and 6900-7100 trading ranges earlier in the year.
The ASX quickly shrugged early weakness to trade above 7500 for much of the day – setting a new record for highest close in consecutive sessions now despite major sectors of materials and energy both more than 1% lower. For now equity markets seem to have little concern around lockdowns and case numbers instead buying the vaccine take up along with the government support narrative despite Victoria now facing another lockdown.
The ASX200 enjoyed a solid session on Wednesday basically closing on its all-time high, although only 55% of stocks rallied when the major banks and miners advance it’s going to be another win for the bulls. Fresh bad news is rapidly becoming increasingly thin on the ground clearing the way for further gains into Christmas for an index which has already rallied +13.9% so far this year. At MM we are bullish equities with the path of least resistance clearly to the upside, a few other additional statistics to the ones recently mentioned are also catching our attention:
