The ASX200 continued to make fresh 11-month highs yesterday with again only 60% of the index posting gains but with the exception of CSL Ltd (CSL) the winners were focused were it mattered from a points perspective propelling the market over 50-points higher e.g. The “Big 4” Banks, Wesfarmers (WES), BHP and RIO all rallied well over 1%. Global equities are clearly embracing the combination of ongoing huge fiscal / monetary stimulus plus the hope that Joe Biden will deliver stability around global trade.
However it wasn’t all roses under the hood as Cleanaway Waste (CWY) fell over 8% following the retirement of its Chief Executive Vik Bansal after 5-years’ in the seat – the bullying incident and associated uprising a few months ago clearly the catalyst for his departure. While we’ve had Cleanaway on our hitlist for a while, the pullback hasn’t convinced MM that its time to buy back into the business. We are keener on a few stocks that already appear to have found a decent swing low such as Aristocrat Leisure (ALL) which we touched on yesterday – watch for alerts today.
The ASX200 made fresh 11-month highs yesterday illustrating even though we feel a pullback may occur MM has no interest in losing our significant core exposure to equities, remember “the trend is your friend” and its clearly been up since last March – we may take some money off the table in the coming months but it simply still feels too early. Wednesdays push to multi month highs was reasonably broad based with 60% of the index advancing as the performance baton was passed from the Banks back to the IT Sector, there’s no rest for the bears as buyers still look keen to buy any dips.
After struggling over recent months the IT Sector was the standout yesterday advancing +2.5% but interestingly, Afterpay (APT) aside, it’s some of the weaker names like Wisetech (WTC) and Bravura (BVS) that have started leading the charge with one on the star performers of the last 6-months Xero (XRO) appearing to be seeing some profit taking as it corrects almost 20% in just a few weeks – investors are getting on the front foot and rotating between stocks / sectors as we expected, MM definitely expects to be on this train through 2021.
The ASX200 gave back over 50-points yesterday with 65% of stocks falling, declines were led by the Banks and Resources with some clear “risk off” profit taking washing through the market. The news was thin on the ground but in unison with a pullback in the Aussie and a wobbly US futures market we saw the buyers simply back off letting the sellers win the day, importantly there was nothing aggressive / scary about the session plus remember our “Gut Feel” is we see the index dip under 6500 before the uptrend resumes.
Over the weekend the market news was fairly thin, but it was interesting to see it in black and white that the RBA expects their current aggressive stance on interest rates to fuel a surge in house prices, they actually anticipate such a move to be somewhere between +10% and +30% over 3-years depending on whether homeowners / investors become complacent that it’s the new norm. The message beneath the surface is clear in our opinion:
1 – If house prices pop too hard expect the RBA to again act to rein in the gains through increasing interest rates.
2 – The RBA are watching the loan to value data closely simply because they don’t want to see a major outbreak of negative equity when interest rates rise and housing prices potentially correct.
The ASX200 fought its way to a small 7-point gain yesterday while the sector story remained the same as Energy / Resources and Banks rallied while the yield sensitive stocks / sectors struggled. Many lucky market players are still enjoying an extended break which is reflected by the quiet roads, with school holidays running up until Australia Day I don’t really expect too many fireworks in the near future even with President Trump again being impeached. Yesterday’s extremely tight intra-day trading range says it all as does the markets 8-weeks of consolidation since late November, in our opinion the longer stocks can hold the 6700 area the greater chance that the next decent leg will again be higher.
It’s now only 4-days until Christmas but for people in NSW and all of Australia watching the COVID outbreak on Sydney’s Northern Beaches its likely to feel much longer – 30 fresh cases yesterday and while we saw zero spread outside of the area the full city lockdown scenario currently feels around 50-50, at least the Avalon area has the reputation as being the “insula peninsula” for a reason, it may just save both our Christmas and New Year.
The ASX200 soared to its highest level since February as over 80% of the market rallied led by the unusual combination of resources and IT with the later the standout led by Afterpay which gained 5% to breach $120 for the first time ever – its now incredibly a bigger business than both Coles (COL) and Woodside (WPL). Throughout Thursday the market rallied without taking a meaningful backward step, as we’ve trotted out almost at nauseam recently this time of year regularly delivers a dearth of sellers.
The ASX200’s post COVID rally continues in earnest with the local market breaking above both its March high and the psychological 6500 level during yesterday’s session. The markets now rallied well over 10% in the last 3-weeks as stocks continue to embrace the US election, positive vaccine development and ongoing huge monetary & fiscal stimulus. Last week I wrote “My “Gut Feel” is the buying in the banks and resources will continue but the aggressive selling of some tech names will abate pushing the underlying index higher.” – this has been on the money recently and we see no reason to doubt a further extension of this new trend into Christmas but after an almost vertical style rally some decent pullbacks or at least consolidation is inevitable.
Yesterday wasn’t the ASX’s proudest day with the trading system failing for almost 6-hours - a lot of not-too subtle lines circulating around the office yesterday however it seems the ASX has a glitch like this every 4 years – last time it happened was in 2016 and 2012 before that – fingers crossed for today. This particular ASX technical upgrade reminded me of what Apple regularly run through my phone, it never works as well afterwards. All we know for sure is the market opened strongly coming within a whisker of 6500 by 10.24am before the curtain fell, the futures implied stocks would have drifted for most of the day before finishing close to their highs but only a crystal ball will know the exact answer.
This morning the SPI futures are calling the ASX200 to open up around 50-points after a strong performance on Wall Street which saw the likes of BHP rally ~2% in the US. Again the “recovery story” looks set to lead the pack after the Energy Sector surged almost 4% on Friday night compared to the IT sector which gained less than 1%, investors remain comfortable to look through the current awful COVID picture in the US following Pfizer’s vaccine announcement. With earnings turning higher and a global reopening on the horizon the optimists are in in charge at present and we see no reason to the fight the uptrend until further notice.
The ASX200 made fresh 11-month highs yesterday illustrating even though we feel a pullback may occur MM has no interest in losing our significant core exposure to equities, remember “the trend is your friend” and its clearly been up since last March – we may take some money off the table in the coming months but it simply still feels too early. Wednesdays push to multi month highs was reasonably broad based with 60% of the index advancing as the performance baton was passed from the Banks back to the IT Sector, there’s no rest for the bears as buyers still look keen to buy any dips.
After struggling over recent months the IT Sector was the standout yesterday advancing +2.5% but interestingly, Afterpay (APT) aside, it’s some of the weaker names like Wisetech (WTC) and Bravura (BVS) that have started leading the charge with one on the star performers of the last 6-months Xero (XRO) appearing to be seeing some profit taking as it corrects almost 20% in just a few weeks – investors are getting on the front foot and rotating between stocks / sectors as we expected, MM definitely expects to be on this train through 2021.
The ASX200 gave back over 50-points yesterday with 65% of stocks falling, declines were led by the Banks and Resources with some clear “risk off” profit taking washing through the market. The news was thin on the ground but in unison with a pullback in the Aussie and a wobbly US futures market we saw the buyers simply back off letting the sellers win the day, importantly there was nothing aggressive / scary about the session plus remember our “Gut Feel” is we see the index dip under 6500 before the uptrend resumes.
Over the weekend the market news was fairly thin, but it was interesting to see it in black and white that the RBA expects their current aggressive stance on interest rates to fuel a surge in house prices, they actually anticipate such a move to be somewhere between +10% and +30% over 3-years depending on whether homeowners / investors become complacent that it’s the new norm. The message beneath the surface is clear in our opinion:
1 – If house prices pop too hard expect the RBA to again act to rein in the gains through increasing interest rates.
2 – The RBA are watching the loan to value data closely simply because they don’t want to see a major outbreak of negative equity when interest rates rise and housing prices potentially correct.
The ASX200 fought its way to a small 7-point gain yesterday while the sector story remained the same as Energy / Resources and Banks rallied while the yield sensitive stocks / sectors struggled. Many lucky market players are still enjoying an extended break which is reflected by the quiet roads, with school holidays running up until Australia Day I don’t really expect too many fireworks in the near future even with President Trump again being impeached. Yesterday’s extremely tight intra-day trading range says it all as does the markets 8-weeks of consolidation since late November, in our opinion the longer stocks can hold the 6700 area the greater chance that the next decent leg will again be higher.
It’s now only 4-days until Christmas but for people in NSW and all of Australia watching the COVID outbreak on Sydney’s Northern Beaches its likely to feel much longer – 30 fresh cases yesterday and while we saw zero spread outside of the area the full city lockdown scenario currently feels around 50-50, at least the Avalon area has the reputation as being the “insula peninsula” for a reason, it may just save both our Christmas and New Year.
The ASX200 soared to its highest level since February as over 80% of the market rallied led by the unusual combination of resources and IT with the later the standout led by Afterpay which gained 5% to breach $120 for the first time ever – its now incredibly a bigger business than both Coles (COL) and Woodside (WPL). Throughout Thursday the market rallied without taking a meaningful backward step, as we’ve trotted out almost at nauseam recently this time of year regularly delivers a dearth of sellers.
The ASX200’s post COVID rally continues in earnest with the local market breaking above both its March high and the psychological 6500 level during yesterday’s session. The markets now rallied well over 10% in the last 3-weeks as stocks continue to embrace the US election, positive vaccine development and ongoing huge monetary & fiscal stimulus. Last week I wrote “My “Gut Feel” is the buying in the banks and resources will continue but the aggressive selling of some tech names will abate pushing the underlying index higher.” – this has been on the money recently and we see no reason to doubt a further extension of this new trend into Christmas but after an almost vertical style rally some decent pullbacks or at least consolidation is inevitable.
Yesterday wasn’t the ASX’s proudest day with the trading system failing for almost 6-hours - a lot of not-too subtle lines circulating around the office yesterday however it seems the ASX has a glitch like this every 4 years – last time it happened was in 2016 and 2012 before that – fingers crossed for today. This particular ASX technical upgrade reminded me of what Apple regularly run through my phone, it never works as well afterwards. All we know for sure is the market opened strongly coming within a whisker of 6500 by 10.24am before the curtain fell, the futures implied stocks would have drifted for most of the day before finishing close to their highs but only a crystal ball will know the exact answer.
This morning the SPI futures are calling the ASX200 to open up around 50-points after a strong performance on Wall Street which saw the likes of BHP rally ~2% in the US. Again the “recovery story” looks set to lead the pack after the Energy Sector surged almost 4% on Friday night compared to the IT sector which gained less than 1%, investors remain comfortable to look through the current awful COVID picture in the US following Pfizer’s vaccine announcement. With earnings turning higher and a global reopening on the horizon the optimists are in in charge at present and we see no reason to the fight the uptrend until further notice.
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