The ASX200 tumbled over -1% yesterday after Commonwealth Bank (CBA) dragged both the sector and index lower, by the close the “Big 4” banks were responsible for over two-thirds of the main index’s 78-point fall. During the day we saw noticeably large volume through the futures market as nervous investors appeared to move to the sidelines following the market’s +9.6% rally from its early January low – in just 8 trading days the local market has surrendered over 200 points or 3%.
The ASX200 followed US indices higher at the start of Tuesday but from 10.30 am onwards it slowly but surely slipped lower losing almost 80% of its original gains, a couple of big hits on the stock level appeared to weigh on overall sentiment e.g. Star Entertainment (SGR) -13.5%, Ansell (ANN) -8.7% and Breville (BRG) -4.7%. Earnings season hasn’t helped a tired market that’s already rallied +18% from its October low, however, it’s been interest rate expectations that’s weighed heaviest on risk assets over recent weeks, yesterday we saw NAB forecast that the RBA would hike rates up to 4.1% and suddenly we have a new “handle” that is largely being accepted.
The ASX200 slipped -0.2% yesterday but in a similar fashion to US stocks on Friday we saw some buying surface into the close, especially through the futures. While the local market was down all-day only 55% of the main board closed lower although there was a negative undercurrent to proceedings as the Consumer Discretionary stocks continued to struggle, their woes were compounded by a bearish outlook from JB Hi-Fi (JBH) which saw the electronics retailer tumble over 5% - more on this later.
Both the Fed and RBA have raised interest rates this month as expected, however, the accompanying hawkish rhetoric caught many people calling interest rates close to a peak off guard plus moves were compounded by some recent strong economic data which has stoked the fire that interest rates will both go and stay higher for longer.
The ASX200 fell over 0.5% yesterday courtesy of some broad-based weakness, by the close over 70% of the main board closed lower with all 11 sectors retreating. The main mover on the day was AGL Energy (AGL) which tumbled -10.33% following a weak 1H result and downgrade to full-year guidance, a disappointing combination however overall it was a fairly quiet session that again saw the index traverse the psychological 7500 area.
The ASX200 maintained its recent love affair with the 7500 area on Thursday finally closing up +0.35% with the influential financials offering the main support e.g. Suncorp (SUN) +4.6%, Macquarie Group (MQG) +2.6% and National Australia Bank (NAB) +1%. The winners and losers were evenly matched but it was the smaller end of the main index which dragged the chain hence the index managed to post a small gain e.g. Elders (ELD) -5.9%, Healius (HLS) -5.4% and United Malt Group (UMG) -4.1%.
Tuesday was all about the RBA and the unexpected hawkish comments delivered by the RBA Governor. Stocks reversed lower in a matter of minutes after the 230pm decision as investors contemplated rates breaking above 4% before Christmas, the ASX200 finished the day down -0.5% on broad-based selling which saw less than 30% of stocks post gains.
The ASX200 ended Monday down -0.25% following Friday’s weak session on Wall Street coupled with follow-through selling in the pre-market S&P500 futures. The weakness was broad-based with less than 30% of the main index closing in positive territory with the winner’s circle being dominated by the energy and gold names - more on the precious metal later following Newmont’s (NEM US) bid for Newcrest (NCM).
The AFR proudly announced in “Street Talk” yesterday afternoon that $20bn Newcrest Mining (NCM) might be about to receive a bid with the likely suitors being touted as either Barrick Gold Corp (GOLD US) or Newmont Corp (NEM US), either way, all we can say is bring it on! - we hold 5% of our Flagship Growth Portfolio in NCM.
The ASX200 ended yesterday’s mixed session up just 10 points but under the hood, it was a very eventful day even while the market maintained its magnetic attraction to the 7500 area. The interpretation of the Fed’s 0.25% rate hike and accompanying rhetoric delivered some very different performances on the stock & sector level:
The ASX200 followed US indices higher at the start of Tuesday but from 10.30 am onwards it slowly but surely slipped lower losing almost 80% of its original gains, a couple of big hits on the stock level appeared to weigh on overall sentiment e.g. Star Entertainment (SGR) -13.5%, Ansell (ANN) -8.7% and Breville (BRG) -4.7%. Earnings season hasn’t helped a tired market that’s already rallied +18% from its October low, however, it’s been interest rate expectations that’s weighed heaviest on risk assets over recent weeks, yesterday we saw NAB forecast that the RBA would hike rates up to 4.1% and suddenly we have a new “handle” that is largely being accepted.
The ASX200 slipped -0.2% yesterday but in a similar fashion to US stocks on Friday we saw some buying surface into the close, especially through the futures. While the local market was down all-day only 55% of the main board closed lower although there was a negative undercurrent to proceedings as the Consumer Discretionary stocks continued to struggle, their woes were compounded by a bearish outlook from JB Hi-Fi (JBH) which saw the electronics retailer tumble over 5% - more on this later.
Both the Fed and RBA have raised interest rates this month as expected, however, the accompanying hawkish rhetoric caught many people calling interest rates close to a peak off guard plus moves were compounded by some recent strong economic data which has stoked the fire that interest rates will both go and stay higher for longer.
The ASX200 fell over 0.5% yesterday courtesy of some broad-based weakness, by the close over 70% of the main board closed lower with all 11 sectors retreating. The main mover on the day was AGL Energy (AGL) which tumbled -10.33% following a weak 1H result and downgrade to full-year guidance, a disappointing combination however overall it was a fairly quiet session that again saw the index traverse the psychological 7500 area.
The ASX200 maintained its recent love affair with the 7500 area on Thursday finally closing up +0.35% with the influential financials offering the main support e.g. Suncorp (SUN) +4.6%, Macquarie Group (MQG) +2.6% and National Australia Bank (NAB) +1%. The winners and losers were evenly matched but it was the smaller end of the main index which dragged the chain hence the index managed to post a small gain e.g. Elders (ELD) -5.9%, Healius (HLS) -5.4% and United Malt Group (UMG) -4.1%.
Tuesday was all about the RBA and the unexpected hawkish comments delivered by the RBA Governor. Stocks reversed lower in a matter of minutes after the 230pm decision as investors contemplated rates breaking above 4% before Christmas, the ASX200 finished the day down -0.5% on broad-based selling which saw less than 30% of stocks post gains.
The ASX200 ended Monday down -0.25% following Friday’s weak session on Wall Street coupled with follow-through selling in the pre-market S&P500 futures. The weakness was broad-based with less than 30% of the main index closing in positive territory with the winner’s circle being dominated by the energy and gold names - more on the precious metal later following Newmont’s (NEM US) bid for Newcrest (NCM).
The AFR proudly announced in “Street Talk” yesterday afternoon that $20bn Newcrest Mining (NCM) might be about to receive a bid with the likely suitors being touted as either Barrick Gold Corp (GOLD US) or Newmont Corp (NEM US), either way, all we can say is bring it on! - we hold 5% of our Flagship Growth Portfolio in NCM.
The ASX200 ended yesterday’s mixed session up just 10 points but under the hood, it was a very eventful day even while the market maintained its magnetic attraction to the 7500 area. The interpretation of the Fed’s 0.25% rate hike and accompanying rhetoric delivered some very different performances on the stock & sector level:
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