The ASX200 fell -0.4% yesterday as the RBA hiked rates slightly more than expected to 0.35% but interestingly we saw the value stocks dip slightly while tech in particular enjoyed a strong session. However, interest rates have been destined to go higher for months and while yesterday’s move was more aggressive than most economists anticipated it was always a matter of when and how fast as opposed to if they were going significantly higher. The need for the RBA’s record ultra-low COVID 0.1% rate is well and truly in the rearview mirror and MM believes the RBA effectively-acknowledged they’ve let themselves get behind the curve at 2.30 pm, on Tuesday:
The ASX200 kicked off the infamous May on the back foot slipping -1.2%, overall not a bad performance considering the S&P500 fell over -3.6% on Friday night taking it down over -9% for April, we closed the month basically unchanged. All 11 market sectors declined yesterday and I feel like a broken record stating that the weakness was again focused in the IT Sector as it plunged another 4%, all 14 stocks fell as earnings / valuation jitters took their lead from the US reporting season e.g. Amazon.com (AMZN US) was down -14% on Friday. We’ve been looking for a countertrend bounce from this embattled sector but as we said yesterday “it’s now too early to pre-empt...
Over recent decades investors in Australian shares have regularly experienced a negative return through May & June, hence the phrase quoted at nauseam “sell in May and go away”. This morning is certainly poised to rattle investors after Fridays -3.6% plunge by the US S&P500 following further disappointing earnings reports. At MM we had been looking for a spike to new highs through March / April to migrate down the risk curve while at the same time increasing cash levels, so far we’ve only increased our exposure to the defensive end of town as opposed to executing some outright selling as the index failed to reach our upside target levels.
The ASX200 bounced almost +1.3% overnight as the mining stocks enjoyed a strong rebound which helped the Materials Sector rally over +3.5%. The local market yet again finds itself only 3% below its all-time high although most subscribers would agree it doesn’t feel that strong but we cannot argue with the numbers, at MM we still believe “the path of most pain” for underweight investors is a pop to new highs but after trading sideways for more than 12-months it feels a rash call to say it will happen in coming weeks, especially as the banks are starting to feel tired into May.
A week is proving to be a very long time in today’s market, last week the ASX200 tested its all-time high for a second time in 2022 and then yesterday morning we found ourselves 5% lower. The pullback has largely been driven by a plunge in the previously “hot” Resources Sector as China threatens to choke the global economy with further COVID lockdowns, over just 6 trading sessions heavyweight BHP Group has fallen 16%. While MM believes the sector is likely to attract some buying after its savage rerating we remain conscious that investors were positioned the most overweight ever towards the commodity sector which by definition poses some clear washout risks – time will tell if we’ve just witnessed enough of a sell-off to rebalance the markets positioning towards the sector however it seems a strong possibility.
The ASX200 tumbled 2% yesterday courtesy of the combination of gathering downside momentum in global equities and China’s deteriorating COVID picture which is seriously threatening to derail global growth as lockdowns loom across the world’s 2nd largest economy. China is following the rest of the world’s approach to COVID elimination only more than a year behind schedule, Xi Jinping et al are now considering locking down Beijing in an effort to follow their zero-tolerance policy towards the virus – good luck with that! The “million-dollar question” is how far will China go to fight COVID...
The last 2 sessions in the US have seen major volatility with an almost 1000-point drop by the Dow on Friday followed up overnight by an almost 500-point morning dip before stocks reversed higher led by the embattled tech names. With the exception of growth, and especially tech stocks, equities have been holding up extremely well in the face of adversity over the last 6-months but COVID potentially bringing China’s economic growth to a grinding halt is both challenging the macro backdrop and causing weakness across many sectors of the market:
The local market continues to knock on the door of new all-time highs which I’m sure amazes many subscribers and even for bulls like MM its impressive when we consider the huge macro headwinds that have been thrown at equities through the early months of 2022:
The ASX200 got within 8 points of all-time highs yesterday morning however by 4.10pm the market was 63pts off the milestone that MM has been calling for months. Not even a spectacular $20bn private equity bid for hospital operator Ramsay Healthcare (RHC) was enough to offset the profit-taking that crept into the dominant banks and resources throughout the session. Overall, a weak day with the market feeling a touch tired having already rallied +6.39% in March & is now up ~1% in April.
Today I turn 40, I’m not normally big into birthdays however they say this one is meaningful, a time for reflection, to focus on what comes next. For me, hopefully, more of the same with a few more camping holidays, a bit more time with the kids, and I also feel like I need some adventures, things that offer a challenge both physically and mentally and that’s going to be a priority over the coming years. For Market Matters and our wider investment management business, there are some really exciting developments about to happen. Our vision for Market Matters has always been to create a great digital advice platform...
The ASX200 kicked off the infamous May on the back foot slipping -1.2%, overall not a bad performance considering the S&P500 fell over -3.6% on Friday night taking it down over -9% for April, we closed the month basically unchanged. All 11 market sectors declined yesterday and I feel like a broken record stating that the weakness was again focused in the IT Sector as it plunged another 4%, all 14 stocks fell as earnings / valuation jitters took their lead from the US reporting season e.g. Amazon.com (AMZN US) was down -14% on Friday. We’ve been looking for a countertrend bounce from this embattled sector but as we said yesterday “it’s now too early to pre-empt...
Over recent decades investors in Australian shares have regularly experienced a negative return through May & June, hence the phrase quoted at nauseam “sell in May and go away”. This morning is certainly poised to rattle investors after Fridays -3.6% plunge by the US S&P500 following further disappointing earnings reports. At MM we had been looking for a spike to new highs through March / April to migrate down the risk curve while at the same time increasing cash levels, so far we’ve only increased our exposure to the defensive end of town as opposed to executing some outright selling as the index failed to reach our upside target levels.
The ASX200 bounced almost +1.3% overnight as the mining stocks enjoyed a strong rebound which helped the Materials Sector rally over +3.5%. The local market yet again finds itself only 3% below its all-time high although most subscribers would agree it doesn’t feel that strong but we cannot argue with the numbers, at MM we still believe “the path of most pain” for underweight investors is a pop to new highs but after trading sideways for more than 12-months it feels a rash call to say it will happen in coming weeks, especially as the banks are starting to feel tired into May.
A week is proving to be a very long time in today’s market, last week the ASX200 tested its all-time high for a second time in 2022 and then yesterday morning we found ourselves 5% lower. The pullback has largely been driven by a plunge in the previously “hot” Resources Sector as China threatens to choke the global economy with further COVID lockdowns, over just 6 trading sessions heavyweight BHP Group has fallen 16%. While MM believes the sector is likely to attract some buying after its savage rerating we remain conscious that investors were positioned the most overweight ever towards the commodity sector which by definition poses some clear washout risks – time will tell if we’ve just witnessed enough of a sell-off to rebalance the markets positioning towards the sector however it seems a strong possibility.
The ASX200 tumbled 2% yesterday courtesy of the combination of gathering downside momentum in global equities and China’s deteriorating COVID picture which is seriously threatening to derail global growth as lockdowns loom across the world’s 2nd largest economy. China is following the rest of the world’s approach to COVID elimination only more than a year behind schedule, Xi Jinping et al are now considering locking down Beijing in an effort to follow their zero-tolerance policy towards the virus – good luck with that! The “million-dollar question” is how far will China go to fight COVID...
The last 2 sessions in the US have seen major volatility with an almost 1000-point drop by the Dow on Friday followed up overnight by an almost 500-point morning dip before stocks reversed higher led by the embattled tech names. With the exception of growth, and especially tech stocks, equities have been holding up extremely well in the face of adversity over the last 6-months but COVID potentially bringing China’s economic growth to a grinding halt is both challenging the macro backdrop and causing weakness across many sectors of the market:
The local market continues to knock on the door of new all-time highs which I’m sure amazes many subscribers and even for bulls like MM its impressive when we consider the huge macro headwinds that have been thrown at equities through the early months of 2022:
The ASX200 got within 8 points of all-time highs yesterday morning however by 4.10pm the market was 63pts off the milestone that MM has been calling for months. Not even a spectacular $20bn private equity bid for hospital operator Ramsay Healthcare (RHC) was enough to offset the profit-taking that crept into the dominant banks and resources throughout the session. Overall, a weak day with the market feeling a touch tired having already rallied +6.39% in March & is now up ~1% in April.
Today I turn 40, I’m not normally big into birthdays however they say this one is meaningful, a time for reflection, to focus on what comes next. For me, hopefully, more of the same with a few more camping holidays, a bit more time with the kids, and I also feel like I need some adventures, things that offer a challenge both physically and mentally and that’s going to be a priority over the coming years. For Market Matters and our wider investment management business, there are some really exciting developments about to happen. Our vision for Market Matters has always been to create a great digital advice platform...
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