As we see aggressive selling wash through equity markets the main question MM is being asked is “should we sell and hide, or be a buyer” with underlying sentiment understandably one of caution. Today we have taken a holistic look at our MM Flagship Growth Portfolio as we look to maintain our outperformance without taking on board undue risk. Today we’ve considered a few snapshots of this portfolio after we used recent weaknesses to deploy some funds across the banks, tech, and miners.
MM remains fairly comfortable that the regulators will end the current panic sooner rather than later although that doesn’t mean the banks are a “screaming buy” they are likely to take time to regain investors’ full confidence – people love to knock the Australian banks but its times like now where we should feel blessed by their strength and stability.
US stocks experienced a volatile but ultimately positive session overnight following the support of First Republic Bank which saw the S&P00 advance +1.8% and the NASDAQ again outperform +2.7% even as Treasuries fell and rates rose after the ECB hiked interest rates. The Tech stocks are focused on the future path for interest rates as opposed to the current turmoil in the Banking Sector – on the sector level Tech rallied +2.8% while the Financials bounced +2%.
US stocks experienced another tough session overnight as Credit Suisse (CSGN SW) plunged ever lower, the European investment bank closed down a scary -24% with the Swiss Government now looking at options to stabilise the bank – ironically economists were focusing on consumers and mortgage holders being pressured by rate hikes over the last 12 months but it has been the banks that appear to have suffered the most since central banks relentlessly marched down their hawkish path.
This time last week the market was abuzz with the previous day’s 10th consecutive interest rate hike by the RBA which in the process took the Australian Official Cash Rate to 3.6%. This morning that’s a distant memory as analysts apply stress tests to the embattled US & Global Banking Sector, the former has already fallen -39% from its January 2022 high – this week we have already seen well know Zurich based merchant bank Credit Suisse (CSGN SW) plumb a fresh all-time low showing it’s not just the vulnerable US regionals that are catching sellers attention.
Through 2023 MM has been pointing out how equities were ignoring rising bond yields i.e. the previous 4 times we saw local 3-year yields above 3.5% the ASX200 was under 7000. However, ironically this month has seen the local index plunge towards 7000 as yields finally turn lower following the collapse of SVB – a great example of what drives markets transitioning over time.
After numerous months of hanging on every word/innuendo from the Fed, RBA, BOE, et al we have a new gorilla in the room i.e. the collapse of Silicon Valley Bank (SIVB US), the 2nd largest bank to collapse in the US history. The wheels started to fall off last Wednesday when the company surprised the market by announcing it needed to raise $US2.2bn to shore up its balance sheet, the rest is already history as we witnessed a hysteria-induced run on the bank largely blamed on Venture Capitalists, customers withdrew a staggering $US42bn by the close of business on Thursday.
US stocks had a tough session overnight ahead of US Jobs Data and ongoing concerns following Jerome Powell’s extremely hawkish Senate testimony earlier in the week, the S&P500 closed down -1.85%. The SPI Futures are pointing to a -1.1% fall early this morning with BHP off 50c in the US while the banks had a tough night dragging the Financial Sector down -4.1%, not a good read-through for the ASX today.
Last week saw approvals to build new homes in Australia fall by the most on record as permits for private houses tumbled which implies weak residential property investment will drag on the economy through 2023/4. Total dwelling approvals tumbled 27.6%, as the weak trend continues with permits to build new private sector houses slumping 13.8% - the 5th straight monthly decline and the lowest since June 2012 according to the Australian Bureau of Statistics (ABS).
Tuesday was all about the RBA with the local index basically unchanged at 2.30 pm before surging +0.5% in the minutes following a less hawkish narrative from Philip Lowe et al. The buying through the afternoon was however controlled with over 30% of the ASX200 still closing down on the day with selling most noticeable in the Materials Sector following the disappointing news out of Beijing regarding China’s economic growth over the weekend. With reporting season and the RBA in the rear-view mirror the market should show its hand over the coming week (s).
MM remains fairly comfortable that the regulators will end the current panic sooner rather than later although that doesn’t mean the banks are a “screaming buy” they are likely to take time to regain investors’ full confidence – people love to knock the Australian banks but its times like now where we should feel blessed by their strength and stability.
US stocks experienced a volatile but ultimately positive session overnight following the support of First Republic Bank which saw the S&P00 advance +1.8% and the NASDAQ again outperform +2.7% even as Treasuries fell and rates rose after the ECB hiked interest rates. The Tech stocks are focused on the future path for interest rates as opposed to the current turmoil in the Banking Sector – on the sector level Tech rallied +2.8% while the Financials bounced +2%.
US stocks experienced another tough session overnight as Credit Suisse (CSGN SW) plunged ever lower, the European investment bank closed down a scary -24% with the Swiss Government now looking at options to stabilise the bank – ironically economists were focusing on consumers and mortgage holders being pressured by rate hikes over the last 12 months but it has been the banks that appear to have suffered the most since central banks relentlessly marched down their hawkish path.
This time last week the market was abuzz with the previous day’s 10th consecutive interest rate hike by the RBA which in the process took the Australian Official Cash Rate to 3.6%. This morning that’s a distant memory as analysts apply stress tests to the embattled US & Global Banking Sector, the former has already fallen -39% from its January 2022 high – this week we have already seen well know Zurich based merchant bank Credit Suisse (CSGN SW) plumb a fresh all-time low showing it’s not just the vulnerable US regionals that are catching sellers attention.
Through 2023 MM has been pointing out how equities were ignoring rising bond yields i.e. the previous 4 times we saw local 3-year yields above 3.5% the ASX200 was under 7000. However, ironically this month has seen the local index plunge towards 7000 as yields finally turn lower following the collapse of SVB – a great example of what drives markets transitioning over time.
After numerous months of hanging on every word/innuendo from the Fed, RBA, BOE, et al we have a new gorilla in the room i.e. the collapse of Silicon Valley Bank (SIVB US), the 2nd largest bank to collapse in the US history. The wheels started to fall off last Wednesday when the company surprised the market by announcing it needed to raise $US2.2bn to shore up its balance sheet, the rest is already history as we witnessed a hysteria-induced run on the bank largely blamed on Venture Capitalists, customers withdrew a staggering $US42bn by the close of business on Thursday.
US stocks had a tough session overnight ahead of US Jobs Data and ongoing concerns following Jerome Powell’s extremely hawkish Senate testimony earlier in the week, the S&P500 closed down -1.85%. The SPI Futures are pointing to a -1.1% fall early this morning with BHP off 50c in the US while the banks had a tough night dragging the Financial Sector down -4.1%, not a good read-through for the ASX today.
Last week saw approvals to build new homes in Australia fall by the most on record as permits for private houses tumbled which implies weak residential property investment will drag on the economy through 2023/4. Total dwelling approvals tumbled 27.6%, as the weak trend continues with permits to build new private sector houses slumping 13.8% - the 5th straight monthly decline and the lowest since June 2012 according to the Australian Bureau of Statistics (ABS).
Tuesday was all about the RBA with the local index basically unchanged at 2.30 pm before surging +0.5% in the minutes following a less hawkish narrative from Philip Lowe et al. The buying through the afternoon was however controlled with over 30% of the ASX200 still closing down on the day with selling most noticeable in the Materials Sector following the disappointing news out of Beijing regarding China’s economic growth over the weekend. With reporting season and the RBA in the rear-view mirror the market should show its hand over the coming week (s).
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