The ASX200 got it’s mojo back this week and yesterday closed at it’s highest level since the pandemic broke late in the first quarter of 2020. It seems the shackles tying the index to the 6800 handle have now been cast off and thankfully we have some clear air ahead of us.
The ASX200 rallied yesterday up through the 6900 level only to falter in late trade to close marginally below the fairly insignificant milestone. Not surprising really given we’ve had a handful of attempts at a breakout only for it to fail and the market to fall back into the trading range that has held firm for more than 5 months now.
Following the longest break of the year for the ASX, we’re tipped to open higher this morning as global markets break to new highs with a confluence of better economic data and news of further stimulus in the US last week creating a strong tailwind for risk assets. Last week saw the resumption of the trends that played out in 2020, namely outperformance by the growth / technology stocks and underperformance of value.
The first quarter of 2021 is behind us and after 3 extremely choppy months on the stock & sector level the ASX200 itself has managed to advance 3%, or an average of just 1% per month. The determining factor of sector performance year to date has been the sharp appreciation by longer dated bond yields as markets factor in a major post COVID economic recovery.
The ASX200 has totally ignored some strong leads from global indices this week, on Monday morning a test of 6900 appeared imminent but the combination of Brisbane’s lockdown and fears around JobKeeper ending today has sent the local index down closer to 6700 come Tuesdays final bell. – as can be seen on the chart below we’re back at the mid-point of 2021, yet again. The selling yesterday was noticeably broad based with almost 85% of the ASX200 closing in the red, notably the Telco’s were the only sector which managed to close in positive territory as Telstra (TLS) continued to firm.
Yesterday morning we saw Brisbane go into a snap 3-day lock down as fears the UK strain of COVID was about to explode through the capital of the Sunshine State, undoubtedly plenty of Easter holidays have been thrown into disarray by this one press conference.
The rally by building stocks caught my attention yesterday in what was another fairly lacklustre session. The 4 local building stocks we are looking at today reside in the large Materials Sector which is illustrated below. At MM we had reduced our exposure to the influential Resources Sector.
The ASX200 enjoyed a surprisingly strong Wednesday ignoring weakness in both the US and Asian Indices, although only just over half of the stocks rallied from an index perspective strength was at the right end of town with both Commonwealth Bank (CBA) and CSL Ltd (CSL) up by almost 2%. Weakness was again focused in the recovery and European facing stocks as the COVID situation deteriorates in many parts of the world, whenever I type words like this I think how lucky we’ve been in Australia.
The ASX200 again challenged the 6800 area early on yesterday only to spend the afternoon drifting lower on broad based selling, the tourism stocks garnered some especially harsh treatment e.g. Flight Centre (FLT), Corporate Travel (CTD) and Webjet (WEB) fell by an average of -3.8%. The market remains choppy and non-committed in both directions making it easy to adopt both a bullish & bearish outlook over 24-hours, overall we feel its best to adopt the attitude of “if in doubt do nowt”.
The ASX200 rallied yesterday up through the 6900 level only to falter in late trade to close marginally below the fairly insignificant milestone. Not surprising really given we’ve had a handful of attempts at a breakout only for it to fail and the market to fall back into the trading range that has held firm for more than 5 months now.
Following the longest break of the year for the ASX, we’re tipped to open higher this morning as global markets break to new highs with a confluence of better economic data and news of further stimulus in the US last week creating a strong tailwind for risk assets. Last week saw the resumption of the trends that played out in 2020, namely outperformance by the growth / technology stocks and underperformance of value.
The first quarter of 2021 is behind us and after 3 extremely choppy months on the stock & sector level the ASX200 itself has managed to advance 3%, or an average of just 1% per month. The determining factor of sector performance year to date has been the sharp appreciation by longer dated bond yields as markets factor in a major post COVID economic recovery.
The ASX200 has totally ignored some strong leads from global indices this week, on Monday morning a test of 6900 appeared imminent but the combination of Brisbane’s lockdown and fears around JobKeeper ending today has sent the local index down closer to 6700 come Tuesdays final bell. – as can be seen on the chart below we’re back at the mid-point of 2021, yet again. The selling yesterday was noticeably broad based with almost 85% of the ASX200 closing in the red, notably the Telco’s were the only sector which managed to close in positive territory as Telstra (TLS) continued to firm.
Yesterday morning we saw Brisbane go into a snap 3-day lock down as fears the UK strain of COVID was about to explode through the capital of the Sunshine State, undoubtedly plenty of Easter holidays have been thrown into disarray by this one press conference.
The rally by building stocks caught my attention yesterday in what was another fairly lacklustre session. The 4 local building stocks we are looking at today reside in the large Materials Sector which is illustrated below. At MM we had reduced our exposure to the influential Resources Sector.
The ASX200 enjoyed a surprisingly strong Wednesday ignoring weakness in both the US and Asian Indices, although only just over half of the stocks rallied from an index perspective strength was at the right end of town with both Commonwealth Bank (CBA) and CSL Ltd (CSL) up by almost 2%. Weakness was again focused in the recovery and European facing stocks as the COVID situation deteriorates in many parts of the world, whenever I type words like this I think how lucky we’ve been in Australia.
The ASX200 again challenged the 6800 area early on yesterday only to spend the afternoon drifting lower on broad based selling, the tourism stocks garnered some especially harsh treatment e.g. Flight Centre (FLT), Corporate Travel (CTD) and Webjet (WEB) fell by an average of -3.8%. The market remains choppy and non-committed in both directions making it easy to adopt both a bullish & bearish outlook over 24-hours, overall we feel its best to adopt the attitude of “if in doubt do nowt”.
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