A week of consolidation at the index level comes to a close, and while the index was little changed (ASX -0.02%), a lot was happening under the hood with two banks reporting and several other stocks out with updates, by in large, we were on the wrong side of them headlined by Xero (XRO) which we hold in our large cap growth strategy – more on this below.
The ASX200 hit a 3-week high around midday today on hopes that we have seen “peak rates” locally and in the US. The run home was a little tougher this afternoon though, finishing in positive territory but falling ~30pts from the high. The Energy sector continues to struggle, Crude oil hitting a 3-month low overnight feeding into further weakness today, offset by a reasonable performance by Financials and Materials.
A mildly positive session for the ASX with 65% of the main board higher, if it hadn’t been for widespread weakness across commodities the market would have pushed up through 7000 with a bullish vibe, only 24 hours after the RBA hiked rates again.
The RBA raised rates today by 0.25% to 4.35% inline with the majority of expectations and market pricing – we’re not surprised they did but we thought there was very little reason to do so. The reaction in markets told the story, stocks initially lower but reversed quickly to trade up (+20pts) from pre-announcement levels, while the currency fell (-0.80%) and so did bond yields, the reaction you’d expect at the end of a hiking campaign
Stocks started the week higher ahead of the RBA decision on interest rates tomorrow, a hike the more probable scenario according to both economists and interest rate futures, however on balance, we believe they shouldn’t and won’t hike as weakness creeps into the local economy, the 1H of 2024 could be a testing time for many people in Australia and we see no reason for the RBA to come off the sidelines after sitting pat for 4 straight meetings, especially given the changing bias in the US last week.
Stocks were up for a 4th straight session today with the main board now ~3.5% above this week’s low, a sharp turnaround since Jerome Powell hinted that the Fed has ended the most aggressive rate hiking cycle in history, with US 10-year yields now ~40bps below recent highs.
Dovish commentary out of the Fed overnight helped to support equity markets globally over the last ~12 hours, and the ASX was no exception. Interest rate-leveraged sectors of Tech and Real Estate were the most significant beneficiaries as the rally in bond yields cooled off. The US 2-year yields fell back below 5% and Australian bond yields were also lower throughout our session.
Some reprieve from recent weakness across the ASX today with stocks holding onto morning gains to finish at session highs, up 0.85%, after a weak October saw the market down 3.8%, underperforming global peers.
The local index saw the best of the day early on, starting off with a respectable ~0.60% rally thanks mostly to a bounce across the Big 4 banks. The strength slipped throughout the afternoon though with cracks in China’s economy leading Materials lower. The index traded down on the session late in the day but managed to close marginally higher.
For the past week, it felt like “when” not “if” the ASX200 would set a new 12-month low. That question was answered today as the local index fell further into despair, weighed on by the Energy, Financials and Consumer sectors. Tech was the only area of the market to buck the weakness, a solid result considering bond yields were broadly higher throughout Monday.
The ASX200 hit a 3-week high around midday today on hopes that we have seen “peak rates” locally and in the US. The run home was a little tougher this afternoon though, finishing in positive territory but falling ~30pts from the high. The Energy sector continues to struggle, Crude oil hitting a 3-month low overnight feeding into further weakness today, offset by a reasonable performance by Financials and Materials.
A mildly positive session for the ASX with 65% of the main board higher, if it hadn’t been for widespread weakness across commodities the market would have pushed up through 7000 with a bullish vibe, only 24 hours after the RBA hiked rates again.
The RBA raised rates today by 0.25% to 4.35% inline with the majority of expectations and market pricing – we’re not surprised they did but we thought there was very little reason to do so. The reaction in markets told the story, stocks initially lower but reversed quickly to trade up (+20pts) from pre-announcement levels, while the currency fell (-0.80%) and so did bond yields, the reaction you’d expect at the end of a hiking campaign
Stocks started the week higher ahead of the RBA decision on interest rates tomorrow, a hike the more probable scenario according to both economists and interest rate futures, however on balance, we believe they shouldn’t and won’t hike as weakness creeps into the local economy, the 1H of 2024 could be a testing time for many people in Australia and we see no reason for the RBA to come off the sidelines after sitting pat for 4 straight meetings, especially given the changing bias in the US last week.
Stocks were up for a 4th straight session today with the main board now ~3.5% above this week’s low, a sharp turnaround since Jerome Powell hinted that the Fed has ended the most aggressive rate hiking cycle in history, with US 10-year yields now ~40bps below recent highs.
Dovish commentary out of the Fed overnight helped to support equity markets globally over the last ~12 hours, and the ASX was no exception. Interest rate-leveraged sectors of Tech and Real Estate were the most significant beneficiaries as the rally in bond yields cooled off. The US 2-year yields fell back below 5% and Australian bond yields were also lower throughout our session.
Some reprieve from recent weakness across the ASX today with stocks holding onto morning gains to finish at session highs, up 0.85%, after a weak October saw the market down 3.8%, underperforming global peers.
The local index saw the best of the day early on, starting off with a respectable ~0.60% rally thanks mostly to a bounce across the Big 4 banks. The strength slipped throughout the afternoon though with cracks in China’s economy leading Materials lower. The index traded down on the session late in the day but managed to close marginally higher.
For the past week, it felt like “when” not “if” the ASX200 would set a new 12-month low. That question was answered today as the local index fell further into despair, weighed on by the Energy, Financials and Consumer sectors. Tech was the only area of the market to buck the weakness, a solid result considering bond yields were broadly higher throughout Monday.
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