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If it wasn’t for the banks & Telstra today, it would have been a poor session on the ASX however when the average gain for the banks is over 2% and Telstra (TLS) rallies ~3% it provides a decent backbone for the broader market.
The ASX200 kicks off the infamous May this morning having already enjoyed gains of 6.6% year-to-date with the Banking Sector leading the way following the sharp rise in global bond yields in Q1.
The ASX200 ended April in a very different tone to the majority of the Easter month, local stocks closed down -0.8% with almost 70% of the index closing in the red. However even a weak Friday wasn’t enough to make a meaningful dent in the months performance with April still closing up +3.5% taking the annual gain to just over +6.5% year-to-date. The banks have dominated 2021 with ANZ Bank (ANZ) and Westpac (WBC) both up almost 30% while the local tech stocks has seen some of the biggest losses, a very different story to recent years and the US market where the NASDAQ again made fresh all-time highs last week.
The last day of April saw the market end ~1% lower as traders ruled a line under a very strong month.
The ASX200 closed up 0.25% yesterday as it continued to grind higher, the speed of its ascent is reminiscent of my kids getting ready for school but there’s no signs of failure at this point in time – our preferred scenario remains a classic seasonal pullback through May & June but the bulls still remain in control at this juncture with 55% of stock rallying on Thursday, led by strength in Healthcare & IT stocks both of which prefer a lower bond yield environment.
Another positive session for stocks today with the market grinding higher – it actually hit a new intra-day post pandemic high at 7096 supported by strong buying in the IT sector which added more than 2%. Some fire works amongst the supermarkets today as Coles aggressive sales plan got the thumbs up against Woolies as they released a trading update, the former up ~3%, the latter down ~4% – more on that below.
As discussed in recent reports, we are making some amendments across the Global Macro ETF Portfolio & Emerging Companies Portfolio today / tonight.
The ASX200 rallied solidly on Wednesday embracing what was surprisingly benign inflation data which suggests the RBA will be able to hold off longer than expected before it pulls the trigger on rate hikes.
The market opened around par this morning however inflation data released at 11.30am was weaker than expected and saw the buyers emerge pushing the market ~30pts higher.
The ASX200 continues to oscillate around the psychological 7000 level ignoring both good and bad news over recent sessions. Yesterday we saw further positive M&A news from both Bingo (BIN) & Tabcorp (TAH) plus an iron ore sector continuing to recover strongly but disappointingly with over half of the ASX falling the underlying index was unable to register a gain for the day – the stock / sector rotation continues.
