A quiet start to a busy week from a data perspective, the Australian Budget is out tomorrow (not usually market moving), ahead of the US Inflation Data on Wednesday (which is usually market moving). Today, stocks moved in a tight ~20-point range with little conviction in either direction, before a spurt in the last hour pushed the index into positive territory (just).
Todays afternoon note will not be available from Market Matters. We'll provide an overview of the week in tomorrow's Q&A Report. Apologies for the inconvenience.
The Market Matters Team
A tough session for the ASX today with a confluence of factors combining to hit Property, Financials and Retailers fairly hard. Signs that consumers are starting to feel the pinch of higher rates was the common theme, with both CBA and Judo highlighting an uptick in arrears on the same day that several retailers flagged softer sales.
The market was strongest early before tapering off throughout the day, a late spurt putting the ASX200 in the green (just) on a day dominated by company-specific news flow, generally coming out of the very popular Macquarie conference.
The local market enjoyed the best session in 3 months today with a broad-based rally for much of the day turning into overdrive following a more ‘dovish’ than expected RBA which had interest rates on hold this afternoon. The gain of more than 100 points is even more impressive given NAB went ex-dividend today, the bank falling 52c vs 84c dividend, managing to hold onto more than just the attached franking credits.
A strong start to the 2nd week of May as softer US employment data on Friday allayed some concerns around sticky inflation and higher interest rates. As bond yields pulled back, equities got some clear air to rally buoyed by US quarterly earnings that are coming in stronger than expected. i.e. the Goldilocks scenario remains in play.
A solid session to end a choppy but overall positive week for stocks with some big moves playing out across the market. The rate-sensitive sectors in Real-Estate & Property were the main winners for the week showing strong reversion from last week's move. This ongoing uncertainty around interest rates is clearly having a big influence, however, if MM is correct, the next move in rates will be down which will be supportive of equities overall, hence we’ve maintained our bullish bias towards stocks.
An interesting session today coming off a volatile last hour in the US where markets surged higher and then gave back all of their gains following the Fed Decision on interest rates. Traders were looking for a big move either way, so derivatives had been piled on, the most in around a year, however, Jerome Powell ‘threaded the needle’ and did a good job of articulating the Fed stance, which is rates may remain higher for longer, but they’re unlikely to go up. The ASX opened marginally higher this morning, rallied then pulled back late as US Futures made gains during our time zone.
The local market wasn’t immune to the equity rout in the US overnight, all sectors closing lower today to give back all the gains that started this week. There was some effort to support the ASX intraday, staging a ~40pt rally from early lows to early afternoon, however, the risk-off trend picked back up into the afternoon as trades took exposure off ahead of the Fed interest rate decision due out tomorrow morning our time.
A positive session to end a tough month for markets with the ASX dipping 2.95% during April, offsetting much of the strong move in March. That said, the ASX 200 remains only 3% below its all-time high despite some significant changes from a macro perspective during the month as inflation remains ‘stickier’. At Market Matters, we’ve remained bullish equities and we continue to believe that’s the right medium-term approach, albeit in a three-step forward, two-back sort of trend.
Todays afternoon note will not be available from Market Matters. We'll provide an overview of the week in tomorrow's Q&A Report. Apologies for the inconvenience.
The Market Matters Team
A tough session for the ASX today with a confluence of factors combining to hit Property, Financials and Retailers fairly hard. Signs that consumers are starting to feel the pinch of higher rates was the common theme, with both CBA and Judo highlighting an uptick in arrears on the same day that several retailers flagged softer sales.
The market was strongest early before tapering off throughout the day, a late spurt putting the ASX200 in the green (just) on a day dominated by company-specific news flow, generally coming out of the very popular Macquarie conference.
The local market enjoyed the best session in 3 months today with a broad-based rally for much of the day turning into overdrive following a more ‘dovish’ than expected RBA which had interest rates on hold this afternoon. The gain of more than 100 points is even more impressive given NAB went ex-dividend today, the bank falling 52c vs 84c dividend, managing to hold onto more than just the attached franking credits.
A strong start to the 2nd week of May as softer US employment data on Friday allayed some concerns around sticky inflation and higher interest rates. As bond yields pulled back, equities got some clear air to rally buoyed by US quarterly earnings that are coming in stronger than expected. i.e. the Goldilocks scenario remains in play.
A solid session to end a choppy but overall positive week for stocks with some big moves playing out across the market. The rate-sensitive sectors in Real-Estate & Property were the main winners for the week showing strong reversion from last week's move. This ongoing uncertainty around interest rates is clearly having a big influence, however, if MM is correct, the next move in rates will be down which will be supportive of equities overall, hence we’ve maintained our bullish bias towards stocks.
An interesting session today coming off a volatile last hour in the US where markets surged higher and then gave back all of their gains following the Fed Decision on interest rates. Traders were looking for a big move either way, so derivatives had been piled on, the most in around a year, however, Jerome Powell ‘threaded the needle’ and did a good job of articulating the Fed stance, which is rates may remain higher for longer, but they’re unlikely to go up. The ASX opened marginally higher this morning, rallied then pulled back late as US Futures made gains during our time zone.
The local market wasn’t immune to the equity rout in the US overnight, all sectors closing lower today to give back all the gains that started this week. There was some effort to support the ASX intraday, staging a ~40pt rally from early lows to early afternoon, however, the risk-off trend picked back up into the afternoon as trades took exposure off ahead of the Fed interest rate decision due out tomorrow morning our time.
A positive session to end a tough month for markets with the ASX dipping 2.95% during April, offsetting much of the strong move in March. That said, the ASX 200 remains only 3% below its all-time high despite some significant changes from a macro perspective during the month as inflation remains ‘stickier’. At Market Matters, we’ve remained bullish equities and we continue to believe that’s the right medium-term approach, albeit in a three-step forward, two-back sort of trend.
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