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A soft session locally with the kibosh put on a positive open mid-morning as employment data was stronger than expected casting a shadow over the RBA’s new found dovish stance, the market quickly bringing back the probability of a February cut to a coin toss.
We are amending the Active Growth Portfolio Today
The market further embraced Tuesday’s more dovish rhetoric from Michele Bullock on Wednesday as bonds rallied (yields lower) and the Aussie Dollar fell to fresh 2024 lows on the prospect of RBA rate cuts in 2025. Our preferred scenario is unchanged, but the risks have certainly skewed to a more aggressive path by the RBA.
It was all about rate expectations today after the RBA commentary yesterday afternoon, with limited news on the corporate front. Stocks sensitive to a cut crawled higher, and some of the more crowded trades reversed – real estate and consumer discretionary all alone in the green as the other nine sectors fell. The index moved lower from the opening bell and didn’t look like recovering.
The ASX200 slipped -0.36% on Tuesday, but the pronounced stock/sector rotation is what caught our attention. The stimulatory rhetoric out of Beijing on Tuesday saw aggressive buying return to the ASX miners, in a similar fashion to late September.
An interesting session for the ASX today with some aggressive rotation out of the highflyers into the beaten-up miners following news of further Chinese stimulus.
We are making several amendments to the Emerging Companies Portfolio
The ASX200 staged an impressive recovery on Monday after being down ~50 points at around 11 am; 8 of the main board’s 11 sectors closed higher which was enough to see the index eke out a small gain for a day that saw an absence of selling into early weakness.
The ASX sank early today down ~50pts by 11am before producing a very solid come-back to finish a whisker higher – a strong effort really ahead of the RBA decision on rates tomorrow and a mixed day for the banks with ANZ announcing a new CEO.
Momentum mania is sweeping both Wall Street and the ASX, with the risk party continuing unabated on Friday night. The S&P 500 ended last week at fresh records, helped by a +28% gain by the NASDAQ this year.
