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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.
The market tracked lower again today however the selling is far from aggressive – it’s more a trickle lower on lack of interest rather than anything more bearish at this stage.
The ASX200 slipped lower on Monday failing to take any cheer from a strong end to last week by overseas markets, the session felt like a drift lower on lack of interest with less than 30% of stocks managing to close in positive territory. With the exception of some solid gains by the iron ore names, following a strong session by the bulk commodity, nothing particularly caught our attention on a day where a disappointing 10 out of 11 of the market sectors closed lower.
A quieter start to a big week with the ASX oscillating around par for most of the session, around 65% of the market closing lower today and only one lone sector (materials) finishing in the black.
Last week saw the ASX200 close basically unchanged although it was fairly choppy from a day to day perspective but with Healthcare stocks picking up the slack in IT and Energy the net result to the index was extremely small. Stock / sector rotation continues to dominate the Australian market as we approach the infamous May – the phrase “sell in May & go away” is founded on hard seasonal facts – over the last decade, while the market was rallying, the average return for May was -3% and June -1.7%.
