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MM has been looking for a recovery by the defensive sectors over recent sessions and its slowly been playing out but the big question is do we believe the likes of Healthcare will rally or simply outperform some hot value stocks that have soared in 2021.
A fairly lacklustre day to start the week with the ASX ebbing in and out of positive territory within a fairly broad 66 point trading range. Property stocks the standout from a sector perspective followed closely by Healthcare with some decent buying in Fischer & Paykel (FPH) +3.78%, Healius (HLS) +3.34% and Ramsay Healthcare (RHC) which put on +3.21%. We’ve written a bit about Gold in recent notes and its struggling to rally by any meaningful margin, in Asian trade today spot gold was trading down $4 to $1723, Newcrest (NCM) the best of the large cap golds up +1.42%.
The ASX200 rallied almost 1% last week but it noticeably underperformed the Dow which rallied over 4% to fresh all-time highs, unfortunately we remain 6% below our 7197 all-time high posted in February last year. A couple of COVID cases plus an amazing Labor landslide victory in WA wont help the local market today which was already only looking for a flat opening following another poor session by US tech stocks on Friday night.
A strong session to round out the week, the ASX managed to hold on to early gains today after dropping the ball all other days this week. Tech was best as growth names get picked up off the floor. Resources were riding the coat tails of the risk on attitude from the market movers. The staples and financials lagged the market though still managed a small gain.
The weekly Q&A Report answering subscriber questions throughout the week
The ASX200 can’t make its mind what to do, should it follow the Dow, NASDAQ or Europe and so far the conclusions been “if in doubt do nowt”. Coming into today the markets up just 3-points for the week, for all its bluster and major stock / sector rotation the underlying index continues to go nowhere fast. Yesterday summed up most of 2021 as we opened marginally higher which attracted sellers, this drove the market down over 100-points from its high before the weakness attracted buyers to push us all the way back to unchanged.
Another choppy day for the ASX with one way traffic on the sell side for the morning before a midday low and a reasonable rally into the close before finishing flat. The ASX sell-off early was an anomaly from a regional perspective with Asian markets remaining flat as did US Futures however that didn’t last long and we saw some reasonable buying in the second-half of the day.
MM added to our frustrating position in Newcrest Mining (NCM) yesterday, hopefully we aren’t throwing good money after bad! The gold price has corrected almost 20% since the euphoric period last August and as we’ve seen this year when markets become too optimistic watch out and vice-versa.
As MM keeps saying “selling strength and buying weakness will add value in 2021” and gold certainly ticks the box of the later. I wont go into the fundamental reasons why we are bullish gold around the $US1700 area as its covered very succinctly by Rocky in the video contained and we share those views, but the technical picture is also supportive with silver remaining on track to make fresh multi-year highs above $US30/oz.
The ASX opened better than it closed today with the 6800 level on the ASX once again providing an impenetrable barrier. The early high of 6806 was made 20mins after the open and the rest of the day was one way traffic before we eventually closed at 6714. There was a clear move out of the recently strong banks, resources & energy today, back into growth, however it was far from convincing while overnight buying in Gold saw the precious metal stocks do pretty well.
We are making some amendments across all MM Portfolio’s today, inline with recent changes in the Macro backdrop as discussed in recent notes.
