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The local market kicked off May’s penultimate week in a subdued fashion with volumes near the lows of the year, the ASX200 slipping just -0.22% with over 60% of the mainboard closing in the red, the Banking Sector stood out on the wrong side of the ledger while the tech stocks continued their strong 2023 rally e.g. WiseTech Global (WTC) advanced +2.5% posting fresh all-time highs in the process.
MM trimmed our large holding in Xero (XRO) yesterday as planned/flagged in recent reports following its impressive +74% rally from its November low – we still hold 3% of the Flagship Growth portfolio in XRO.
We went very overweight in the growth/tech sector in Q4 of 2023 and are simply migrating back to market weight believing the “easy money” is now in the rear-view mirror as the bond yield ascent slows/ends.
FY23 to date, the Flagship Growth Portfolio is now up ~28%, around 12.5% above the market with our skew towards IT contributing to the outperformance.
The ASX200 ended last week up +2.3%, with the first three days of October already recouping all of September's decline. The healthcare sector made a welcome return to the winners' enclosure, ably supported by the influential miners and banks, while the energy sector was the only meaningful drag on the index. Only a flat week by the heavyweight iron ore miners reined in performance, although their sector peers worked hard to address their slumber, with 18 members of the materials sector closing out the week up more than +5%.
The ASX finished the week strongly, rising steadily through the session with strength in healthcare, tech and consumer names more than offsetting softer trade in energy and utilities.
The ASX 200 surged +1.1% on the second day of October, enjoying its best session in six weeks, as the market appeared to enjoy fresh funds flowing into the major stocks and sectors. Gains took the index back within striking distance of its all-time high as the influential financials and miners lifted the broad market, with 8 of 11 major local sectors closing higher, with energy stocks, real estate plays and health care also notching gains of more than 1% each.
A classic risk-on day for local equities, with investors embracing the dual engine of bank strength and a relentless gold bid. Materials were the clear standout, but the breadth of today’s rally was also impressive, with most sectors participating as the new quarter seemed to attract new $$. Healthcare has been the real index laggard in recent periods but today saw an obvious change of trend with CSL having the biggest influence from an index perspective, up nearly 4%.
After a choppy session, the ASX200 closed slightly lower on the first day of October, with BHP Group (BHP) shaving 17 points off the index, which ultimately slipped just three points. The market seesawed through the day as investors weighed reports of a halt to BHP’s China-bound iron ore shipments alongside concerns over a potential U.S. government shutdown.
The ASX chopped around today, ultimately finishing down a few points with pundits blaming the U.S. government standoff, however we’ve been here before and it rarely creates a large volatility spike – never say never, but it’s generally more about political posturing.
The ASX200 slipped 0.2% on Tuesday after the RBA and Michele Bullock threw a wet towel over the “Rate Cut Party”, although she really only maintained her logical, cautious narrative.
The ASX opened firmer but reversed course after the RBA left rates unchanged at 3.6% and warned that near-term inflation may be stronger than expected, dampening hopes for easing in the short-term.
The ASX 200 put in a stellar performance on the penultimate day of September, advancing by +0.9% and reducing the month's decline to 1.2% with just today remaining. Gains weren't overly broad-based, with less than 60% of the main board closing higher, but when the “Big Four Banks” advance on average more than 1.8% the index is almost guaranteed to rally, and when it's supported by the influential healthcare names, and a rampant gold sector, gains become magnified ultimately delivering the best day since September the 4th.
A bullish start to the week with the ASX outpacing gains seen in the US on Friday evening – the index getting the bit between its teeth from the opening bell, holding onto the gains as the day progressed.
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