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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.
The ASX200 ended the first week of December down just 0.2%, with the real estate sector the main drag, falling 2.65% following the sell-down of $1.9bn worth of sector/market heavyweight Goodman Group (GMG) stock. Conversely, IT and consumer discretionary sectors were best on the ground. The gold names dominated the winner’s enclosure after Northern Star’s (NST) $5bn takeover of De Grey Mining (DEG), while lithium and ESG continued to decline.
We are taking profit on a bank in the International Equities Portfolio
Some selling pressure swept across the ASX today with over 70% of the main board finishing lower. We’ve talked about the declining momentum on the upside, and while it’s too early to conclude the bullish trend is over, some consolidation at least wouldn’t surprise.
