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I reiterate MM believes the defensive stocks will outperform in the coming few months hence we have started aligning our portfolios accordingly e.g. yesterday in our Growth Portfolio we reduced our holding in Commonwealth Bank (CBA) and finally went long CSL Ltd (CSL) after a very long absence from the healthcare giant which makes up ~7% of the ASX200. However to be more precise we actually believe the markets due some reversion back towards yield sensitive stocks / sector illustrated perfectly by the IT stocks rallying almost 3% yesterday.
A strong (ish) session for stocks today with the ASX 200 finally breaking and holding above the 6800 level although it wasn’t that convincing. It took a couple of attempts this morning before sustained buying saw the market push through the key level which now sets up the technical picture at least for a quick ~200 point move on the upside, similar to the sort of pop higher that we mentioned this morning given short-term traders are probably sitting “short volatility” thinking the sideways ride will continue forever, the perfect backdrop for a squeeze, one if it does unfold subscribers know MM is keen to fade.
MM are making some tweaks to our Flagship Growth & Active Income Portfolios today
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.
