The ASX200 rallied another +0.3% on Tuesday as it continues to toy with the psychological 6800 area, as we’ve said previously the market set-up is evolving with an uncanny resemblance to its look & feel through late June, into July. Four months ago once the consolidation was over the market rallied strongly without a backward glance, we are currently wary that many investors are too pre-occupied with the Fed’s interest rate decision and rhetoric next Tuesday when a more pragmatic and aggressive position towards stocks feels warranted as the current wave of selling appears to have exhausted itself.
The ASX200 rallied strongly yesterday following Wall Street’s lead on Friday night as opposed to the savage declines which rolled across Chinese-facing stocks as Xi Jinping took full control of the world’s 2nd largest economy. The local market may have closed up +1.5% but it still surrendered ~30% of its early gains as the Chinese stock market rout weighed on sentiment. However, there were some shining lights which caught our attention as over 85% of the market rallied:
The ASX200 fell over -1% yesterday on broad-based selling which saw over 80% of the leading index close in the red, only the Energy and Financial Sectors managed to close up on the day. The local market continues to rotate in the 6625-6825 region and with the next Fed policy decision due in less than 2-weeks investors feel reticent to take equities towards a new level of equilibrium without fresh news – as we mentioned yesterday the current consolidation looks identical to the one we experienced through June / July before stocks eventually broke out on the upside.
The ASX200 enjoyed another strong session on Wednesday to close the day up +0.3%, taking it back above the psychological 6800 level. Most of the action on a relatively quiet day unfolded on the stock level with the battery metal stocks bouncing nicely whereas one of MM’s holdings Megaport (MP1) was clobbered after failing to meet growth expectations, more on this later. We continue to feel the path of least resistance for stocks is on the upside as we approach the Fed’s interest rate decision in 2-weeks’ time and of course a potential “Christmas Rally”...
Earlier this month we saw the RBA hike rates by only 0.25% when most pundits thought they would go 0.5%, over the last 2-weeks slowly but surely the markets are starting to embrace the possibility that bond yields are close to an inflection point and the inversely correlated rate sensitive stocks/sectors a bottom e.g. Tech, Consumer Discretionary and Real Estate. At MM we’ve stuck to our contrarian view that equities will be higher come Christmas, led by the high Beta Tech Sector, and yesterday we saw how easily some of these stocks can pop when sentiment turns, only slightly:
The ASX200 surrendered most of Friday’s gains yesterday as the market continues to rotate in the 6500-6800 region, it was the heavyweight resource stocks that weighed on Monday while the banks continued to look solid. Weakness was not too broad-based with 20% of stocks advancing but with BHP Group (BHP) -2.3%, RIO Tinto (RIO) -2.6% and CSL (CSL) -1.3% it’s hard for the index to perform on the day.
Last week saw another admirable attempt by stocks to rally quickly fade away as investors remembered the looming Fed rate hike on the 2nd of November. On Thursday night US stocks roared higher even as the CPI Inflation print came in hotter than expected but after a report on Friday showed that inflation expectations over the year ahead had risen for the 1st time in 7-months it was one step too far for the bulls to fight the ingrained downtrend and the Dow proceeded to tumble over 400-points, surrendering almost 50% of the previous day’s rally in the process.
The ASX200 tried to rally yesterday but nerves ahead of the pending US CPI crept in after midday and the market surrendered its earlier 40-point advance. There were a couple of fascinating moves within the Resources Sector which could just be the start of some meaningful changes to some entrenched trends of 2022, it smells like “the game is afoot”:
The ASX200 managed to ignore overnight wobbles on Wall Street to close marginally higher on Wednesday courtesy of a stellar session for the banks following an extremely bullish interpretation of the Bank of Queensland’s (BOQ) FY22 result – cash earnings were actually ~1% below consensus but the net interest margin was 2.5% above expectations, costs were lower while the top line increased, the board talked a solid game over the medium-term and as we’ve been discussing over recent weeks there appeared few people left to sell after the regional banks already corrected 35% over the last year, while the...
The ASX200 rallied strongly yesterday following Wall Street’s lead on Friday night as opposed to the savage declines which rolled across Chinese-facing stocks as Xi Jinping took full control of the world’s 2nd largest economy. The local market may have closed up +1.5% but it still surrendered ~30% of its early gains as the Chinese stock market rout weighed on sentiment. However, there were some shining lights which caught our attention as over 85% of the market rallied:
The ASX200 fell over -1% yesterday on broad-based selling which saw over 80% of the leading index close in the red, only the Energy and Financial Sectors managed to close up on the day. The local market continues to rotate in the 6625-6825 region and with the next Fed policy decision due in less than 2-weeks investors feel reticent to take equities towards a new level of equilibrium without fresh news – as we mentioned yesterday the current consolidation looks identical to the one we experienced through June / July before stocks eventually broke out on the upside.
The ASX200 enjoyed another strong session on Wednesday to close the day up +0.3%, taking it back above the psychological 6800 level. Most of the action on a relatively quiet day unfolded on the stock level with the battery metal stocks bouncing nicely whereas one of MM’s holdings Megaport (MP1) was clobbered after failing to meet growth expectations, more on this later. We continue to feel the path of least resistance for stocks is on the upside as we approach the Fed’s interest rate decision in 2-weeks’ time and of course a potential “Christmas Rally”...
Earlier this month we saw the RBA hike rates by only 0.25% when most pundits thought they would go 0.5%, over the last 2-weeks slowly but surely the markets are starting to embrace the possibility that bond yields are close to an inflection point and the inversely correlated rate sensitive stocks/sectors a bottom e.g. Tech, Consumer Discretionary and Real Estate. At MM we’ve stuck to our contrarian view that equities will be higher come Christmas, led by the high Beta Tech Sector, and yesterday we saw how easily some of these stocks can pop when sentiment turns, only slightly:
The ASX200 surrendered most of Friday’s gains yesterday as the market continues to rotate in the 6500-6800 region, it was the heavyweight resource stocks that weighed on Monday while the banks continued to look solid. Weakness was not too broad-based with 20% of stocks advancing but with BHP Group (BHP) -2.3%, RIO Tinto (RIO) -2.6% and CSL (CSL) -1.3% it’s hard for the index to perform on the day.
Last week saw another admirable attempt by stocks to rally quickly fade away as investors remembered the looming Fed rate hike on the 2nd of November. On Thursday night US stocks roared higher even as the CPI Inflation print came in hotter than expected but after a report on Friday showed that inflation expectations over the year ahead had risen for the 1st time in 7-months it was one step too far for the bulls to fight the ingrained downtrend and the Dow proceeded to tumble over 400-points, surrendering almost 50% of the previous day’s rally in the process.
The ASX200 tried to rally yesterday but nerves ahead of the pending US CPI crept in after midday and the market surrendered its earlier 40-point advance. There were a couple of fascinating moves within the Resources Sector which could just be the start of some meaningful changes to some entrenched trends of 2022, it smells like “the game is afoot”:
The ASX200 managed to ignore overnight wobbles on Wall Street to close marginally higher on Wednesday courtesy of a stellar session for the banks following an extremely bullish interpretation of the Bank of Queensland’s (BOQ) FY22 result – cash earnings were actually ~1% below consensus but the net interest margin was 2.5% above expectations, costs were lower while the top line increased, the board talked a solid game over the medium-term and as we’ve been discussing over recent weeks there appeared few people left to sell after the regional banks already corrected 35% over the last year, while the...
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
Verication email sent.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
!
Invalid One Time Password
Please check you entered the correct info, please also note there is a 10minute time limit on the One Time Passcode
To reset your password, enter your email address
A link to create a new password will be sent to the email address you have registered to your account.
