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The ASX started the day on the backfoot with the materials space copping a beating after the ~20% selloff in US copper overnight as the index fell -55pts early, but the ~8700 level held well.
The ASX200 surged +0.6% on Wednesday, closing within 0.2% of its all-time trading high after the soft inflation print ignited the rate-sensitive stocks/sectors. Real estate, consumer discretionary, and the financials all closed up more than 1%.
A strong session for the ASX today back testing all-time highs with softer than tipped inflation data at 11.30am the catalyst. The RBA having been waiting for this quarterly print on price pressures, and now the door is fully ajar for a rate cut on the 12 August.
The ASX200 rallied bravely throughout Tuesday to close slightly higher after being down 0.6% earlier in the day. In an overall quiet session, none of the major 11 sectors moved by more than 0.7% but if you look deeper under the hood, it was a tough day for uranium stocks, even though ironically the energy sector was the best on the ground, closing up +0.65%.
The ASX is looking interesting here for the chartists, with the market having broken out mid-month before coming back to consolidate above the ~8600 breakout level. Today was important, with a retest and ultimate rally, and while the main board only put on +6pts in aggregate, it was +60pts from the morning low – a bullish sign. The move will be tested tomorrow with the important inflation data out at 11.30am, a more benign print (sub 2.1%) should see the market break higher, and vice versa on a hotter read. A pivotal penultimate day of the month!
• The ASX200 +6pts/+0.08% closing at 8704
The ASX200 started the week on a firm footing, closing up +0.4%, back within a few points of the psychological 8700 area. The catalyst for the solid day was news that the EU and the US had reached a trade agreement, and President Trump was looking to extend his tariff truce with China – the US S&P 500 futures buoyed sentiment, opening ~0.5% higher on the tariff news.
The ASX closed higher on Monday as global markets rallied on the back of a new US-EU trade deal, a lower tariff of 15% vs 30% widely expected, as well as signs the US-China tariff truce may be extended for an additional 90 days.
Meme stock mania has been spreading across a growing number of speculative stocks, underscoring retail traders’ appetite for more risky bets even with the market at all-time highs.
The ASX200 slipped 1% last week, eroding 40% of July’s gains as the RBA took the shine off the local market even as global indices pushed to fresh highs, i.e. the US S&P 500 advanced +1.5% last week. The S&P 500 notched its 5th straight record weekly closing high, courtesy of more than 80% of the 169 S&P 500 companies that have reported to date have beaten Wall Street’s expectations. In Australia, it’s been a more mixed and polarised affair on the reporting front, but with the “Big Four Banks” retreating on average close to 4% the ASX was always going to struggle to match its overseas peers.
The ASX put in a weaker session seeing sustained selling through the day, as softer iron ore prices weighed on the materials space. With heavyweight resources and the big banks down, the index was fighting a losing battle from start to finish, though we still managed to close higher for the week.
