China attempted to give equities a shot in the arm on Tuesday but it was extremely short-lived. We expected the “China Trade” to pullback after its aggressive rally in late September but the retracement has been deeper than anticipated with the market now firmly in a “glass half empty” mood
The initial “Trump Bump” is probably already maturing but he hasn’t even been sworn in yet and there are still four more years to go, with Chapter 1 likely to be dominated by deregulation and tariffs. On the election trail, the President-elect described “tariffs” as his favourite word although it took time for him to roll them out in 2016. Conversely, corporate Australia is arguably heading in the opposite direction with government inquiries/commissions becoming increasingly commonplace, they may often be warranted but they’re generally bad news for stocks, especially the long drawn-out affairs that seem to be in vogue.
Market sceptics keep telling us that stock market valuations are too high and a meaningful correction is imminent, but these calls are currently falling on deaf errors. Even important pockets of the lagging ASX, like the banking sector, have repeatedly been described as too expensive and a sell by most analysts.
The ASX200 advanced +0.3% on Thursday, in a very different session from the one enjoyed by US equities following Trump's victory. Less than 55% of the local mainboard and 5 of the major 11 sectors closed in positive territory.
The bookies again proved to be a far better gauge of politics than the polls, with Donald Trump steamrolling Kamala Harris in yesterday's election. We all know the result: the Republicans are poised to control the House and Senate, making Trump one of the most powerful Presidents in history, a far cry from a jail cell.
Melbourne Cup Day saw the RBA leave interest rates at 4.35% while indicating they will remain at their 13-year high for some time. This is not ideal for Prime Minister Albanese, as a federal election is due between February and May. Labour has already started looking for votes from the younger generation by targeting fees/payments around further education.
The ASX200 enjoyed a solid start to the Presidential election week, closing up +0.6%. The financials dragged the index higher throughout the session, contributing ~50% to the market's advance. Westpac (WBC) reversed an early intra-day ~2.5% loss to finish up +0.9% as investors digested its FY report.
The “Magnificent Seven” goliath tech stocks have come off the boil over recent months, illustrated by the NASDAQ failing to break above its July peak, whereas the Broad-based S&P500, Dow Jones and Russell 30 have all posted new milestones in recent weeks. The markets are becoming more discerning towards high-valuation growth stocks, demanding increasingly strong results to maintain their bullish advance.
The ASX200 slipped 0.25% as we waved goodbye to October; the infamous month finished down 0.6%, but volatility was significantly higher on the stock/sector level as we rolled through AGM season. The financials remained the backbone of the market, advancing 4.5% ahead of key earnings and dividends for 3 of the “Big Four” plus Macquarie Group (MQG).
Thursday saw the Annual headline inflation rate fall to 2.8% in the three months to September from 3.8% in the June quarter, slightly better than the forecasted 2.9%, but it wasn’t enough to move bond markets or the Aussie Dollar. The numbers were broadly in line with the RBA’s inflation outlook; remember last week, Michele Bullock said it would take another “year or two” before consumer prices are sustainably in their 2-3% target band, i.e. rates will remain higher for longer.
The initial “Trump Bump” is probably already maturing but he hasn’t even been sworn in yet and there are still four more years to go, with Chapter 1 likely to be dominated by deregulation and tariffs. On the election trail, the President-elect described “tariffs” as his favourite word although it took time for him to roll them out in 2016. Conversely, corporate Australia is arguably heading in the opposite direction with government inquiries/commissions becoming increasingly commonplace, they may often be warranted but they’re generally bad news for stocks, especially the long drawn-out affairs that seem to be in vogue.
Market sceptics keep telling us that stock market valuations are too high and a meaningful correction is imminent, but these calls are currently falling on deaf errors. Even important pockets of the lagging ASX, like the banking sector, have repeatedly been described as too expensive and a sell by most analysts.
The ASX200 advanced +0.3% on Thursday, in a very different session from the one enjoyed by US equities following Trump's victory. Less than 55% of the local mainboard and 5 of the major 11 sectors closed in positive territory.
The bookies again proved to be a far better gauge of politics than the polls, with Donald Trump steamrolling Kamala Harris in yesterday's election. We all know the result: the Republicans are poised to control the House and Senate, making Trump one of the most powerful Presidents in history, a far cry from a jail cell.
Melbourne Cup Day saw the RBA leave interest rates at 4.35% while indicating they will remain at their 13-year high for some time. This is not ideal for Prime Minister Albanese, as a federal election is due between February and May. Labour has already started looking for votes from the younger generation by targeting fees/payments around further education.
The ASX200 enjoyed a solid start to the Presidential election week, closing up +0.6%. The financials dragged the index higher throughout the session, contributing ~50% to the market's advance. Westpac (WBC) reversed an early intra-day ~2.5% loss to finish up +0.9% as investors digested its FY report.
The “Magnificent Seven” goliath tech stocks have come off the boil over recent months, illustrated by the NASDAQ failing to break above its July peak, whereas the Broad-based S&P500, Dow Jones and Russell 30 have all posted new milestones in recent weeks. The markets are becoming more discerning towards high-valuation growth stocks, demanding increasingly strong results to maintain their bullish advance.
The ASX200 slipped 0.25% as we waved goodbye to October; the infamous month finished down 0.6%, but volatility was significantly higher on the stock/sector level as we rolled through AGM season. The financials remained the backbone of the market, advancing 4.5% ahead of key earnings and dividends for 3 of the “Big Four” plus Macquarie Group (MQG).
Thursday saw the Annual headline inflation rate fall to 2.8% in the three months to September from 3.8% in the June quarter, slightly better than the forecasted 2.9%, but it wasn’t enough to move bond markets or the Aussie Dollar. The numbers were broadly in line with the RBA’s inflation outlook; remember last week, Michele Bullock said it would take another “year or two” before consumer prices are sustainably in their 2-3% target band, i.e. rates will remain higher for longer.
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