The $US has fallen over 11% since late September spiking life back into the likes of gold, silver and copper taking the Australian Resources Sector along for the ride e.g. this week even saw the “Big Australian” BHP Group (BHP) hit $50 for the first time. However, as Shawn discussed on AusBiz yesterday MM doesn’t believe it’s going to be a one-directional journey for this influential sector which could provide an excellent platform for investors’ portfolios over the coming years if navigated correctly. Our view is basically split into 2 parts:
The ASX200 rallied another +0.8% yesterday on broad-based buying reaching levels not enjoyed since June of last year, over 75% of the index advanced, and all 11 sectors advanced while in the loser’s corner lithium and iron ore names were the market’s weakest pockets. As we head into what most pundits believe is an almost certain recession the local market is now only 3.2% below its pinnacle posted last August – investors might be bearish but the stock market is not listening.
We will deliver The MM Annual Outlook Report in the coming weeks but today’s first report for 2023 is likely to provide some clues on our current thinking for the coming year with stock/sector volatility looking set to be firmly on the menu yet again i.e. another year for the Active Investor. In a number of key financial markets, we have strong views on where they are travelling over the next 2-5 years but the next 3-6 months could easily see 10-20% reversions as varying dominant cycle thematic come in and out of favour such is the nature of today’s rapidly evolving macroeconomic landscape hence in our opinion investors must manage risk and be often prepared to “buy weakness and...
The ASX200 finally strung together two consecutive positive days courtesy of strong performances from overseas bourses, in quick fashion the local index had bounced almost 150 points, recovering more than 40% of December’s losses in the process – it’s, unfortunately, going to be a different story this morning. Thursday’s gains were fairly broad-based with over 75% of the index rallying with only the Resources Sector surrendering a little ground. A number of the growth stocks caught our attention in the winner’s enclosure as bond yields continue to consolidate their strong advance through 2022:
The ASX200 has embraced the saying “what a difference a day makes” in consummate style over the last 48 hours i.e. down aggressively on Tuesday following the BoJ’s hawkish tweak on interest rate policy followed by a +1.3% recovery yesterday, the net difference being down just 18 points. The local market’s advance yesterday was broad-based with over 85% of the main board rising as the bulls again started talking up the prospects of a late Christmas rally – certainly, anything is possible as volumes start to decline. There were a few standout sector performances as the news from Japan was dismissed almost as fast as it arrived:
The Bank of Japan (BOJ) shocked financial markets at 2 pm AEST when they adjusted their yield curve control program, in simple English they will allow Japan’s 10-year bond yields to rise to ~0.5% from the previous upper limit of 0.25% - at MM we all wish we could borrow money for 10-years at 0.5%, that would make a lovely present from Santa. However, at the same time, the central bank kept its short-term interest rates at minus -0.1%, significantly below the likes of Australia, Europe and the US.
The ASX200 put in a valiant effort yesterday considering Friday’s weakness on Wall Street, for much of the session it actually felt like we were witnessing the dawn of another “Christmas Rally” before the index ultimately closed down just -0.2% with the Real Estate Sector falling -1.1% the weakest link. Conversely, the Energy Sector again rallied solidly led by the coal names with Whitehaven (WHC) now only ~4% away from making fresh all-time highs.
As most readers would know last week saw central banks continue to hike interest rates with total disregard for Christmas cheer, the hikes and net hawkish rhetoric weighed on equities making a “Christmas Rally” start to feel like the proverbial pipe dream – any other time of the year and we would say no way but history tells us to never discount a run by stocks into Christmas and the year-end. Some fascinating moves unfolded on the macro level last week with very mixed messages for investors:
The ASX200 struggled again yesterday taking the market into negative territory for the week as weakness crept into the previously strong Resources Sector. The market has felt heavy over the last few weeks but at this stage, we’re still only -2.3% below the market’s recent high, very surmountable if we can regain our mojo after recent moves by central banks...
The ASX200 rallied strongly on Wednesday following the positive lead from the better-than-expected US CPI inflation print, we believe bond yields have peaked for now although the Fed have work to do even if the worst of US inflation may have passed. Stocks/sectors are taking some heart from recent Fed comments and Tuesday’s benign CPI read as we see some reversion to the dominant trends of 2022 start to slowly unfold, yesterday fitted into this story under the hood i.e. banks and resources were mixed while the tech stocks gained some traction.
The ASX200 rallied another +0.8% yesterday on broad-based buying reaching levels not enjoyed since June of last year, over 75% of the index advanced, and all 11 sectors advanced while in the loser’s corner lithium and iron ore names were the market’s weakest pockets. As we head into what most pundits believe is an almost certain recession the local market is now only 3.2% below its pinnacle posted last August – investors might be bearish but the stock market is not listening.
We will deliver The MM Annual Outlook Report in the coming weeks but today’s first report for 2023 is likely to provide some clues on our current thinking for the coming year with stock/sector volatility looking set to be firmly on the menu yet again i.e. another year for the Active Investor. In a number of key financial markets, we have strong views on where they are travelling over the next 2-5 years but the next 3-6 months could easily see 10-20% reversions as varying dominant cycle thematic come in and out of favour such is the nature of today’s rapidly evolving macroeconomic landscape hence in our opinion investors must manage risk and be often prepared to “buy weakness and...
The ASX200 finally strung together two consecutive positive days courtesy of strong performances from overseas bourses, in quick fashion the local index had bounced almost 150 points, recovering more than 40% of December’s losses in the process – it’s, unfortunately, going to be a different story this morning. Thursday’s gains were fairly broad-based with over 75% of the index rallying with only the Resources Sector surrendering a little ground. A number of the growth stocks caught our attention in the winner’s enclosure as bond yields continue to consolidate their strong advance through 2022:
The ASX200 has embraced the saying “what a difference a day makes” in consummate style over the last 48 hours i.e. down aggressively on Tuesday following the BoJ’s hawkish tweak on interest rate policy followed by a +1.3% recovery yesterday, the net difference being down just 18 points. The local market’s advance yesterday was broad-based with over 85% of the main board rising as the bulls again started talking up the prospects of a late Christmas rally – certainly, anything is possible as volumes start to decline. There were a few standout sector performances as the news from Japan was dismissed almost as fast as it arrived:
The Bank of Japan (BOJ) shocked financial markets at 2 pm AEST when they adjusted their yield curve control program, in simple English they will allow Japan’s 10-year bond yields to rise to ~0.5% from the previous upper limit of 0.25% - at MM we all wish we could borrow money for 10-years at 0.5%, that would make a lovely present from Santa. However, at the same time, the central bank kept its short-term interest rates at minus -0.1%, significantly below the likes of Australia, Europe and the US.
The ASX200 put in a valiant effort yesterday considering Friday’s weakness on Wall Street, for much of the session it actually felt like we were witnessing the dawn of another “Christmas Rally” before the index ultimately closed down just -0.2% with the Real Estate Sector falling -1.1% the weakest link. Conversely, the Energy Sector again rallied solidly led by the coal names with Whitehaven (WHC) now only ~4% away from making fresh all-time highs.
As most readers would know last week saw central banks continue to hike interest rates with total disregard for Christmas cheer, the hikes and net hawkish rhetoric weighed on equities making a “Christmas Rally” start to feel like the proverbial pipe dream – any other time of the year and we would say no way but history tells us to never discount a run by stocks into Christmas and the year-end. Some fascinating moves unfolded on the macro level last week with very mixed messages for investors:
The ASX200 struggled again yesterday taking the market into negative territory for the week as weakness crept into the previously strong Resources Sector. The market has felt heavy over the last few weeks but at this stage, we’re still only -2.3% below the market’s recent high, very surmountable if we can regain our mojo after recent moves by central banks...
The ASX200 rallied strongly on Wednesday following the positive lead from the better-than-expected US CPI inflation print, we believe bond yields have peaked for now although the Fed have work to do even if the worst of US inflation may have passed. Stocks/sectors are taking some heart from recent Fed comments and Tuesday’s benign CPI read as we see some reversion to the dominant trends of 2022 start to slowly unfold, yesterday fitted into this story under the hood i.e. banks and resources were mixed while the tech stocks gained some traction.
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