Bond yields fell, the rate-sensitive 3 years lost 12bps, the Aussie dollar declined and stocks rallied, with the relative sector performances acknowledging what looks to be a very subtle but clear change of tack by our Central Bank.
A choppy session that saw the best of it early thanks to a bullish session overseas where stocks continue to climb the wall of worry. Interest rate-sensitive sectors were the driver today with Aussie 3-year yields off 9bps underpinning buying in retail, IT and Property sectors ahead of key central-bank updates headlined by the RBA tomorrow (+25bps expected) & Fed Chair Jerome Powell’s semi-annual testimony to the US Senate on Wednesday.
A broad-based rally helped recover some of the losses seen on the index earlier in the week. The banks found some buying to round out the week after a few softer sessions, while the resource heavyweights continued their march higher. Real Estate was the only area of the market still struggling today with the market still concerned about interest rates and their impact on property valuations. Despite the bounce today, the index closed -23pts/-0.32% lower for the week.
While the index was largely unchanged, there were some big swings from a sector point of view. Both Materials & Energy was strong, but that’s where the good news ended. The remaining nine sectors closed lower, albeit dividends weighing on some areas more than others as a total of 9 shares in the index traded ex-dividend today.
It was a soggy start to the session today, but buyers came to life mid-morning when some local data prints landed. Inflation (CPI) for January came in below expectations at 7.4%, below the 8% expected by the market while GDP Growth for the 4th quarter was 0.5% vs 0.7% expected. The data took some heat out of bond yields and helped support shares today, while China’s Caixin PMI was also above expectations which supported resource names into the afternoon.
The market ended a tough month on the front foot with the material sector seeing some rare buying, while Energy & Property also chimed in. Over the course of the 28 days of February, resources were the biggest drag on the index which fell by ~3% overall, clearly a weak period for stocks but against the backdrop of January’s ~6% advance, it’s no disaster, particularly given bond yield find themselves back testing multi-year highs.
Local shares started the week on the back foot following a soft Friday night in the US. Inflation concerns picked up again after the previous PCE figure was revised higher and bond yields rallied as a result.
Overall, the week was a soft one (-0.56%) dominated by company results, a lot of moving parts in the market at the moment however earnings have been okay, not a disaster as many suggested, while the focus at the macro at least remains around the trajectory of interest rates.
A softer session for the market, but again there was a lot happening under the hood as you’d expect with reporting season still in full swing - although tapering off from here. 60% of the ASX actually rallied today although when the Materials are down ~1.5% it’s always going to be tough going at the index level.
An interesting session today with the market getting knocked ~60pts early on following a ~700pt fall by the Dow Jones in the US, however wage data that was weaker than expected saw the AUD fall, bond yields fall and equities rally strongly from the morning lows to finish only a lower, particularly when we strip out the impact of dividends with CBA trading Ex-Div for $2.10 + franking today.
A choppy session that saw the best of it early thanks to a bullish session overseas where stocks continue to climb the wall of worry. Interest rate-sensitive sectors were the driver today with Aussie 3-year yields off 9bps underpinning buying in retail, IT and Property sectors ahead of key central-bank updates headlined by the RBA tomorrow (+25bps expected) & Fed Chair Jerome Powell’s semi-annual testimony to the US Senate on Wednesday.
A broad-based rally helped recover some of the losses seen on the index earlier in the week. The banks found some buying to round out the week after a few softer sessions, while the resource heavyweights continued their march higher. Real Estate was the only area of the market still struggling today with the market still concerned about interest rates and their impact on property valuations. Despite the bounce today, the index closed -23pts/-0.32% lower for the week.
While the index was largely unchanged, there were some big swings from a sector point of view. Both Materials & Energy was strong, but that’s where the good news ended. The remaining nine sectors closed lower, albeit dividends weighing on some areas more than others as a total of 9 shares in the index traded ex-dividend today.
It was a soggy start to the session today, but buyers came to life mid-morning when some local data prints landed. Inflation (CPI) for January came in below expectations at 7.4%, below the 8% expected by the market while GDP Growth for the 4th quarter was 0.5% vs 0.7% expected. The data took some heat out of bond yields and helped support shares today, while China’s Caixin PMI was also above expectations which supported resource names into the afternoon.
The market ended a tough month on the front foot with the material sector seeing some rare buying, while Energy & Property also chimed in. Over the course of the 28 days of February, resources were the biggest drag on the index which fell by ~3% overall, clearly a weak period for stocks but against the backdrop of January’s ~6% advance, it’s no disaster, particularly given bond yield find themselves back testing multi-year highs.
Local shares started the week on the back foot following a soft Friday night in the US. Inflation concerns picked up again after the previous PCE figure was revised higher and bond yields rallied as a result.
Overall, the week was a soft one (-0.56%) dominated by company results, a lot of moving parts in the market at the moment however earnings have been okay, not a disaster as many suggested, while the focus at the macro at least remains around the trajectory of interest rates.
A softer session for the market, but again there was a lot happening under the hood as you’d expect with reporting season still in full swing - although tapering off from here. 60% of the ASX actually rallied today although when the Materials are down ~1.5% it’s always going to be tough going at the index level.
An interesting session today with the market getting knocked ~60pts early on following a ~700pt fall by the Dow Jones in the US, however wage data that was weaker than expected saw the AUD fall, bond yields fall and equities rally strongly from the morning lows to finish only a lower, particularly when we strip out the impact of dividends with CBA trading Ex-Div for $2.10 + franking today.
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