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The ASX200 struggled again on Tuesday following a tough session on Wall Street, although the -0.6% decline was significantly better than the US S&P500, which tumbled -1.8% as the large-cap tech names received attention from the sellers.
The market gave back two thirds of yesterday’s gains today as tariffs came in effect on Canada, China & Mexico and Trump took aim at Ukraine following the heated exchange with President Zelensky in the White House. 75% of the main board finished lower, with small caps underperforming large by around 1% i.e. clearly a risk off session.
MM is adding a new position to the Active Income Portfolio today.
The ASX200 rallied +0.9% on Monday after Chinese Manufacturing Data came printed better than expected: The Caixin PMI came in at 50.8, well above the 50.4 consensus forecast, delivering its fastest expansion rate in three months.
A change of fortunes for the ASX today with a positive start to the week; the recently soft sectors saw some strong buying, particularly areas exposed to China while the momentum stocks that struggled through reporting have attracted some money into the dip.
There’s recently been plenty of headline news to trouble investors, although much of it was flagged in Trump’s election campaign speeches. Still, when it becomes a reality, it causes a migration into defensive assets.
Friday’s sharp 1.2% sell-off compounded what had already been a tough February for local stocks. The ASX200 ended the month down 4.2%, with the Financials, Energy, Real Estate, Healthcare, and Tech sectors all falling over 5%. The defensives stood out in the winner’s enclosure, with the Utilities +2.7% and Consumer Staples +1.5%, reducing the market’s decline. The market’s drop was its largest one-month decline since September 2022, as all the statistics aligned to paint a pretty average picture for investors, although we are still up for 2025, albeit just. On the stock level, the major movers were dictated by reporting season; next week should be back to normal, although we do still have Trump and an election looming:
A fitting sell-off to end a tough month for equities with the ASX down over 5% from recent highs. While there is clearly risk off hitting markets, we had similar size moves in August and December 2024, before bouncing back to new highs pretty quickly.
We are making a change to the Active Growth Portfolio today.
The ASX200 enjoyed broad-based buying on Thursday, pushing the index up 27 points / +0.3%; less than 30% of the main board closed lower, with healthcare as the weakest sector. BHP Group (BHP) and Medibank Private (MPL) added 9 points to the index, while CSL was the standout detractor, taking more than 7 points off the ASX200.
