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The magnitude of the selloff in the U.S last night didn’t quite translate to the ASX today – a case of the bigger they are, the harder they fall. The ASX was hit hard early, down ~180pts at the 11am low before recovering 20% of the decline to finish off ~140pts.
The ASX200 ended down -0.1 % on Wednesday; the market looked excellent around midday, but the bears took over in the afternoon, with the Treasurer’s mid-year economic update potentially weighing on the confidence of the local market.
It was a story of one step forward and one step back today – the morning looked promising as the index crept up 50 points and knocked on the door of the 8,350 level, but buying grew tired and sellers flocked in to square away positions for the holiday period as we closed where we set off for the day.
We are amending our bank exposures in the Income Portfolio
Yesterday, an index of Asian currencies retreated to a two-year low. Pessimism towards China’s economic outlook, coupled with the belief that Trump would support the Greenback, has sent the Bloomberg Asia Dollar Index (ADXY) down more than 4% since late September.
Today’s price action is typical of this time of year as many wind down for Christmas – moves get amplified on low volume and the market can start to trade in a more exaggerated way.
The ASX200 slipped another -0.56% on Monday, closing at its lowest level in a month ahead of global rate decisions. The local benchmark retreated for the fifth straight session, its longest losing streak since April. Losses were broad-based, with over 70% of the main board retreating but led by mining and real estate stocks.
Macro dominated the ASX today with the markets losing streak extending to 5 sessions – a drought of corporate announcements as we crawl into 2nd half of December with many businesses entering shutdowns over the holiday period.
The last year has been a roller-coaster for bonds, with analysts changing their minds about the path for RBA rate rises/cuts like the weather! The only constant has been RBA Governor Michele Bullock, who has been consistent in her message to the market, i.e. don’t get too optimistic towards rate cuts as inflation remained sticky. That all changed on Tuesday afternoon.
The ASX200 ended the second week of December down by 1.48%, with the tech sector leading the retreat, tumbling by 5.7%. This was accompanied by real estate, financials, and industrials, which all declined by around 2%. The consumer staples and materials sectors were the only pockets to close up for the week, and they both advanced less than 0.1%. On the stock front, we saw some standout performance reversion from trends of 2024:
