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Last week was a choppy affair for the ASX200, which, even after Friday’s aggressive 0.87% sell-off, still closed up 0.84% courtesy of a storming week for the financials. The action on the stocks/sector level remains more interesting than the too often tracked index, with the financials advancing +4.1% while the utilities, energy and tech sectors retreated 4.4%, 3.9% and 3.5%, respectively. We remain net bullish on the market into 2025, but if you’ve backed the wrong horse, it’s still likely to be a tough ride.
The market gave back all of yesterdays gains in a soft end to a positive week for stocks. The ASX 200 trading at a new all-time high of 8384 yesterday and while todays sell-off had some sting about it, the market was still up 0.8% for the week led by a bounce back in the financial stocks. Gold was strong in Asia today, cracking through $US2700/oz for the first time in history!
The ASX200 rallied 0.86% on Thursday, bringing the local index within striking distance of 8400 for the first time. Gains were broad-based, with ~75% of the main board closing higher, but the banks contributed the most points, with the “Big Four” closing up an average of 1.8% following a strong overnight result by Morgan Stanley (MS US) and stronger than expected employment data locally. We hate to be boring, but “the ASX doesn’t go down without the banks.”
A choppy but position session overall for the ASX, with a very bullish open (market up ~90pts at the highs), before a hotter than expected read on local employment sent bond yields higher (3’s up 5bps to 3.8%), the AUD was bought (+0.4% to 66.91c) while equities were sold as the timing of rate cuts got pushed further out into the Never Never…the market now pricing only a 20% chance of a cut this side of Christmas with the first full 25bps cut now not priced in until April 25.
The ASX200 slipped 0.4% on Wednesday, rotating through the day to close at a similar level to where it opened. The banks advanced throughout the session, with the financial sector ultimately finishing up by +0.27%. Conversely, the other ten main sectors closed lower, led by tech, which fell -1.35%, following the weak overnight session by their peers on Wall Street. There were a couple of interesting moves within the resources sector, both of which are worth monitoring.
The ASX pulled back from all-time highs today, and despite a decent session from the financials, all other sectors finished lower, with most of the selling coming late in the day.
The ASX200 rallied +0.79% on Tuesday, taking the local index above 8300 for the first time. Buying was broad-based, with over 80% of the main board closing in positive territory, but it was financials, healthcare, and tech stocks that led the line, with all three sectors closing over +2.3% higher. The index opened on the front foot following gains on Wall Street and ground higher through the day on an absence of selling in a market that “feels” underweight, especially in some of the influential pockets.
New all-time highs for the ASX today, breaking out above 8300 for the first time as money found it’s way back into the banks while the resources remained pretty well supported – 80% of the main board finished higher. The breakout feels almost lethargic, which is not a bad thing, with stocks grinding to new highs as opposed to exploding towards them on a news-driven event that could quickly dissipate i.e. the market feels like it has sustainable legs here.
Local stocks shrugged off fears around Saturday’s tepid briefing on China stimulus from Lan Fo’an. The local miners rallied throughout the day to close near their session highs, and the Materials Sector was the day’s top performer, gaining +1.3%.
The widely expected sell-off in China facing equities failed the materialise today, with resource stocks and others actually rallying, latching onto the belief that China has signalled its intentions of support, even if they haven’t articulated the finer details or provided specific guidance on the size of stimulus.
