Yesterday we said that it was unlikely the ASX200 could breach the psychological 7100 area before CBA trades ex-dividend this morning but we didn’t count on BHP hitting the ball out of the park with its FY’22 result – Tuesday saw the index rally 41-points to close at 7105 with BHP contributing almost 60% of the market’s advance. However, Commonwealth Bank (CBA) will trade ex-dividend this morning, $2.10 fully franked, which if all else is equal is like to take the market back towards 7050 in a quick fashion.
The ASX200 knocked on the door of its August high yesterday before finally closing up +0.45% on broad based buying which saw over 67% of the main board close in positive territory. If it hadn’t been for a disappointing report from Bendigo Bank (BEN) which fell over 8% dragging much of the sector down in sympathy we could have been testing 7100 but with Commonwealth Bank (CBA) trading ex-dividend $2 fully franked on Wednesday it may prove a touch too much to ask this week.
Last week saw some inconsistencies / fascinating moves across financial markets which we believe were largely driven by investor positioning & sentiment but this might not continue if MM’s preferred scenario unfolds for bond yields. Last week was all about the US CPI and Wednesday’s number showed a much-welcomed slowdown in inflation which sent most indices soaring to their highest levels in over 3-months:
The ASX200 roared higher on Thursday on optimism that peak inflation is behind us but not all parts of this fascinating puzzle are currently in alignment:
The ASX200 struggled on Wednesday with many traders taking a back seat ahead of last night’s important US CPI (inflation) data, the index ultimately closed down -0.5% basically at the same level we started August. Selling was broad-based with 70% of the main index closing in the red but with the influential Banking Sector closing higher, even as Commonwealth Bank (CBA) slipped -0.3%, losses were limited i.e. for fireworks to be lit under the index we generally need to see the Resources & Banks run in one direction.
On Friday we saw an extremely strong set of US Employment numbers increase expectations of a 75bp hike at the September FOMC meeting but tonight’s CPI and the plethora of Fed speakers enjoying the limelight in coming weeks are likely to see opinions swing between 75bp, and back towards 50bp. The markets have taken a definite shift towards a more hawkish stance since Friday and another strong CPI print could easily see US 10 years back above 3% which will pressure equities and especially the Tech Sector.
The ASX200 fought hard to overcome early weakness to close marginally higher on Monday although the gains were very stock / sector specific with under 40% of the main board managing to close in positive territory. Obviously the big news to kick off the week was BHP’s $8.3bn bid for “green metals” miner OZ Minerals (OZL) – more on this later, but the aggressive play by the “Big Australian” also added a tailwind to reverse some of the recent sector performance following the extremely strong US Jobs Report on Friday night which sent bond yields sharply higher:
This year we’ve seen stock market sectors dance to the inflation/interest rate tune whereas the underlying index has been a far harder tougher nut to fathom:
The ASX200 reversed early gains on Thursday to close marginally in the red as weakness in the influential Resources Sector more than offset ongoing strength from both the tech and banking stocks. The last few years have seen major stock & sector rotation within the ASX depending on the macro events in focus at the time, since mid-June its been all about bond yields correcting as central banks ease off their hawkish rhetoric while the risk of a recession in 2023 has been increasingly factored into the market, the moves over the last 7-weeks tells a clear tale:
The ASX200 slipped -0.3% yesterday with the banks weighing on the index while the less influential tech space rallied another +2.4%, the winners & losers were evenly matched on a day when bond yields continued to dictate terms under the market’s hood:
The ASX200 knocked on the door of its August high yesterday before finally closing up +0.45% on broad based buying which saw over 67% of the main board close in positive territory. If it hadn’t been for a disappointing report from Bendigo Bank (BEN) which fell over 8% dragging much of the sector down in sympathy we could have been testing 7100 but with Commonwealth Bank (CBA) trading ex-dividend $2 fully franked on Wednesday it may prove a touch too much to ask this week.
Last week saw some inconsistencies / fascinating moves across financial markets which we believe were largely driven by investor positioning & sentiment but this might not continue if MM’s preferred scenario unfolds for bond yields. Last week was all about the US CPI and Wednesday’s number showed a much-welcomed slowdown in inflation which sent most indices soaring to their highest levels in over 3-months:
The ASX200 roared higher on Thursday on optimism that peak inflation is behind us but not all parts of this fascinating puzzle are currently in alignment:
The ASX200 struggled on Wednesday with many traders taking a back seat ahead of last night’s important US CPI (inflation) data, the index ultimately closed down -0.5% basically at the same level we started August. Selling was broad-based with 70% of the main index closing in the red but with the influential Banking Sector closing higher, even as Commonwealth Bank (CBA) slipped -0.3%, losses were limited i.e. for fireworks to be lit under the index we generally need to see the Resources & Banks run in one direction.
On Friday we saw an extremely strong set of US Employment numbers increase expectations of a 75bp hike at the September FOMC meeting but tonight’s CPI and the plethora of Fed speakers enjoying the limelight in coming weeks are likely to see opinions swing between 75bp, and back towards 50bp. The markets have taken a definite shift towards a more hawkish stance since Friday and another strong CPI print could easily see US 10 years back above 3% which will pressure equities and especially the Tech Sector.
The ASX200 fought hard to overcome early weakness to close marginally higher on Monday although the gains were very stock / sector specific with under 40% of the main board managing to close in positive territory. Obviously the big news to kick off the week was BHP’s $8.3bn bid for “green metals” miner OZ Minerals (OZL) – more on this later, but the aggressive play by the “Big Australian” also added a tailwind to reverse some of the recent sector performance following the extremely strong US Jobs Report on Friday night which sent bond yields sharply higher:
This year we’ve seen stock market sectors dance to the inflation/interest rate tune whereas the underlying index has been a far harder tougher nut to fathom:
The ASX200 reversed early gains on Thursday to close marginally in the red as weakness in the influential Resources Sector more than offset ongoing strength from both the tech and banking stocks. The last few years have seen major stock & sector rotation within the ASX depending on the macro events in focus at the time, since mid-June its been all about bond yields correcting as central banks ease off their hawkish rhetoric while the risk of a recession in 2023 has been increasingly factored into the market, the moves over the last 7-weeks tells a clear tale:
The ASX200 slipped -0.3% yesterday with the banks weighing on the index while the less influential tech space rallied another +2.4%, the winners & losers were evenly matched on a day when bond yields continued to dictate terms under the market’s hood:
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