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A soft session locally with sellers kicking into gear post a more benign inflation print at 11.30am, though there were some hotter pockets to it, and higher bonds and lower stock prices show how it was interpreted by the market, even though headline CPI at 2.8% came back into the RBA’s target band for the first time in 3-years.
We are making several changes to the Active Growth Portfolio today
China’s top legislative bodies’ looming meeting on 4-8th November is slowly adding a bid tone to the ASX miners. Overnight, Reuters reported that China is weighing up a massive $US1.4 trillion in fiscal stimulus over the next few years, with talk that it might be even more if Trump wins next week’s election – Polymarket now have Trump as a 66.7% favourite!
A solid session today for the market, though once again the action is happening under the hood rather than at the index level with a bunch of sales/quarterly updates, an interesting deal in the retail space and a response with more substance from MinRes (MIN) about prevailing issues with their MD.
The ASX200 managed to eke out a slight 0.1% gain on Monday, with BHP’s 1.3% advance being the market’s backbone. It was a reasonably balanced affair on the sector level, with tech names advancing +2% while the rate-sensitive utilities and real estate stocks slipped over 0.5%. The main area of weakness was the energy sector, which declined 0.54%, which was not too bad considering that Paladin Energy (PDN) delivered a disappointing quarterly update and oil tumbled over 5% on easing tensions in the Middle East – more on this later.
A choppy session with some big moves in individual stocks though the index finished only mildly higher. Uranium shares were hit, as were gold stocks while lithium names found a few friends.
Donald Trump is the clear favourite for next week’s election. He’s now rated a ~60% chance of winning the White House, and markets are moving accordingly. As we said last week, the “Trump Trade” has returned with a vengeance, and the impact on bond yields is reverberating across all financial markets.
Last week was a choppy affair for the ASX200, dominated by Tuesdays sharp-sell off as bond yields rallied to 3-month highs with credit markets reducing the number of rate cuts they expect over the next year. The index finally closed down 0.87% on broad based selling with consumer staples +0.02% the only sector managing to eke out a gain while the tech sector took the wooden spoon retreating ~4%. On the stock level, except for a strong performance by the gold miners, it was another mixed bunch of winners & losers
A similar trend to yesterday with the best of the session seen early before consistent selling played out through the afternoon session, the index closing on its lows and down ~0.9% for the week.
The ASX200 slipped just 0.1% on Thursday, a good effort considering the Dow tumbled over 400-points after rising bonds yields weighed on stocks, and in particular the tech sector – overnight US mortgage rates rose for a fourth week to 6.54%. The banks were again the backbone of the local market with the “Big Four” rallying an average of 0.8%, with most of the group back within striking distance of their 2024 high.
