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We are making some amendments in the Emerging Companies, International Equities & ETF Portfolios. Please note, SMS alerts are only sent for changes in the Flagship Growth Portfolio. In that portfolio we are looking for further weakness to buy Oz Minerals (OZL) & Santos (STO), hopefully that plays out next week.
The ASX200 slipped lower yesterday, as we come into Friday “the song remains the same” with the local market very happy to simply rotate around the 7300 area whatever the macro / market news that crosses our screens. In what was a quiet session during an even quieter few weeks for stocks a few points did catch my attention:
The Match out: Stocks lower as lockdowns weigh, Gold stocks rally, Sydney Airports (SYD) rejects bid
A weaker session today with all market sectors lower bar materials & utilities, the former mainly supported by a good move in Gold which has broken out through the $US1800 handle to be trading at $US1831 at our close while the latter was a result of the takeover launched for Spark Infrastructure (SKI). The move in gold talks to the risk off mentality that was seen today as Melbourne is tipped to be entering lockdown. With the two main economic engines of the Aussie economy likely to be in lockdown the market gave back all of the early gains and some to close marginally lower.
The ASX200 enjoyed a solid Wednesday in the face of some negative leads as US stocks drifted lower and the local BNPL space was clobbered courtesy of Apple (AAPL US) – more on this later. Under the hood we saw ongoing mean reversion with the likes of Crown (CWN) and HUB24 Ltd (HUB), who both reside in the MM Flagship Growth Portfolio bounce strongly after struggling over the last few weeks i.e. pretty much a continuance of the trend across recent months.
A choppy session for Aussie stocks today with most focus on the Buy Now Pay Later (BNPL) sector that was hit on the back of news that Apple (AAPL US) was entering the fray, most players in the sector off ~10%. That weighed on the IT sector which fell 2.7% however that was pretty much entirely related to the BNPL companies while tech generally was positive while the Utilities was a standout up more than 3%.
The ASX200 again succumb to the almost magnetic pull of the 7300 level, the index has been rotating around this area within +/- 100-points for over a month but from my perspective it feels even longer! Yesterday saw the market forgo early strong gains to close basically unchanged with the Banking, Energy and Real Estate Sectors weighing on the ASX but the selling was very restrained with only 1 stock falling by over 3% i.e. no change, there are buyers of weakness and sellers of strength but neither appears particularly committed to their cause.
The market saw a strong open up ~50 points early on however sellers got the upper hand and stocks simply drifted lower all day before a big Market on Close (MOC) order hit which knocked 16 points from the market in the match alone. The broader industrials & utilities best on ground today however no sector added more than 1%, while the Real-Estate stocks experienced some mean reversion after yesterday’s strong performance.
Stocks kicked off the week on a very positive footing following the strong gains in Europe and the US on Friday but it was the sterling performance from the large cap miners that caught my attention e.g. BHP Group (BHP) and Fortescue Metals (FMG) both closed up over +3%. MM has been looking for some weakness in the Resources Sector to increase our exposure but its currently proving to be a long wait!
A risk on session to start the week with another 112 cases of COVID in NSW failing to dent sentiment early on. The market opened higher and did a good job of maintaining strength throughout the session. The resource stocks bounced back strongly, BHP up through $51 a standout and when the bulk of the sector rallies ~3% and banks also edge higher it’s hard for the market to do anything but rally.
The ASX200 continues to bounce around between 7200 and 7400 which considering the economic and social backdrop is an impressive performance in my opinion. The local index has rallied ~28% over the last 9-months yet the very real prospect of a damaging extended lockdown in NSW is being shrugged off by stocks, although both bond and currency markets are taking more notice:
