Last week saw 2 major macro headwinds weigh on stocks but overall we felt risk assets held up extremely well with the ASX200 & S&P500 both managing to rally 1.8% even as investors became more nervous & twitchy by the day. While confidence is certainly mixed MM sticks with our view that equities have found or are “looking for” a low albeit one which might only last a few months:
We felt the ASX200 put in a stellar performance on Thursday to fall less than 10-poinst as US futures fell away during our time zone – poor results from the likes of Meta Platforms, the old Facebook (FB US), and Spotify (SPOT US) after the US market closed more than reversed the gains during their day session e.g. Mark Zuckerberg’s Meta Platforms (FB US) was already down well over 20% in New York late trade. The ASX Tech Sector followed the negative US lead closing the day down 5.9%, by far the worst performer – more on this later.
The ASX200 rallied strongly yesterday extending early morning gains on broad based buying that saw over 80% of the index rally – the Energy sector led yet again which has a feeling about it that underweight fund managers are slowly capitulating as crude oil continues to post fresh 7-year highs hence they’re simply missing out, the perfect recipe for a quick sharp rally. Wednesday actually had a surprisingly steady feel about it considering the index rallied over 80-points as buying was consistent but not impulsive as was enjoyed across...
Tuesday saw the ASX200 rally 0.5% on broad based buying with over 80% of the index closing in positive territory, unfortunately some fairly aggressive profit taking in the heavyweight iron ore miners reigned in the gains. The interest rate sensitive Tech and Utilities Sectors led the line as rising bond yields / inflation is slowly becoming old news. The RBA stepped up to the plate yesterday, the news was largely expected which was illustrated perfectly by the markets deepest and most liquid markets:
Stocks will be glad to see the back of January which saw the local ASX200 fall over 11% from its monthly high of 7620 to its low of 6758 with Healthcare and IT Sectors leading the descent e.g. 50% of the Australian tech names are already down over 20% year to date. The steep decline has made the quarterly range one of the largest in the last decade, especially if we remove the initial panic when COVID first entered our lives back in early 2020. However the declines have been very broad based with 13% of the ASX200 currently in the black while the unpopular Energy Sector dominates the winners...
Last week saw a continuation of Januarys surge in volatility but we feel it’s probably gone too far, at least short-term, with any further dips by equities in the coming weeks reasonable buying for active investors:
Equities have been hammered over the last 2-weeks as concerns that higher inflation is set to spark rate hikes across the globe gathered momentum and understandably / logically the high valuation growth names have borne the brunt of the selling. Thursday saw a 4% intra-day bearish turnaround as margin selling appeared to roll through the market after 11am, a short-term panic style bottom feels close at hand, or even in, and we should remember that seasonally buying a January pullback and holding into early Q2 has a great historical track record. I recently read an article by Shane Oliver...
Tuesday saw the ASX200 get savaged following a poor night on Wall Street and nerves ahead of the Feds pending interest rate decision, not to mention the market being closed for Australia Day creating the perfect storm for traders to have zero risk appetite. Its old news as we brace for this morning’s trade but less than 5% of the market managed to advance in the last session as we witnessed unrelenting broad-based selling wash through stocks, firstly lets quickly just evaluate what happened:
Many investors watched yesterday’s market with a large degree of trepidation and while the ASX200 bounced from its early morning lows it was definitely not a convincing recovery with the index still closing down 0.5%, making new 8-months lows and with only 32% of stocks managing to close in positive territory. While the aggressive selling witnessed on Friday wasn’t evident the underlying “risk off” theme continued as quality and defensive names were in demand across many sectors:
MM had been anticipating a very volatile 2022 for financial markets but its arrived faster than we expected, we’re only 3-weeks into January and the markets have already delivered some major swings:
We felt the ASX200 put in a stellar performance on Thursday to fall less than 10-poinst as US futures fell away during our time zone – poor results from the likes of Meta Platforms, the old Facebook (FB US), and Spotify (SPOT US) after the US market closed more than reversed the gains during their day session e.g. Mark Zuckerberg’s Meta Platforms (FB US) was already down well over 20% in New York late trade. The ASX Tech Sector followed the negative US lead closing the day down 5.9%, by far the worst performer – more on this later.
The ASX200 rallied strongly yesterday extending early morning gains on broad based buying that saw over 80% of the index rally – the Energy sector led yet again which has a feeling about it that underweight fund managers are slowly capitulating as crude oil continues to post fresh 7-year highs hence they’re simply missing out, the perfect recipe for a quick sharp rally. Wednesday actually had a surprisingly steady feel about it considering the index rallied over 80-points as buying was consistent but not impulsive as was enjoyed across...
Tuesday saw the ASX200 rally 0.5% on broad based buying with over 80% of the index closing in positive territory, unfortunately some fairly aggressive profit taking in the heavyweight iron ore miners reigned in the gains. The interest rate sensitive Tech and Utilities Sectors led the line as rising bond yields / inflation is slowly becoming old news. The RBA stepped up to the plate yesterday, the news was largely expected which was illustrated perfectly by the markets deepest and most liquid markets:
Stocks will be glad to see the back of January which saw the local ASX200 fall over 11% from its monthly high of 7620 to its low of 6758 with Healthcare and IT Sectors leading the descent e.g. 50% of the Australian tech names are already down over 20% year to date. The steep decline has made the quarterly range one of the largest in the last decade, especially if we remove the initial panic when COVID first entered our lives back in early 2020. However the declines have been very broad based with 13% of the ASX200 currently in the black while the unpopular Energy Sector dominates the winners...
Last week saw a continuation of Januarys surge in volatility but we feel it’s probably gone too far, at least short-term, with any further dips by equities in the coming weeks reasonable buying for active investors:
Equities have been hammered over the last 2-weeks as concerns that higher inflation is set to spark rate hikes across the globe gathered momentum and understandably / logically the high valuation growth names have borne the brunt of the selling. Thursday saw a 4% intra-day bearish turnaround as margin selling appeared to roll through the market after 11am, a short-term panic style bottom feels close at hand, or even in, and we should remember that seasonally buying a January pullback and holding into early Q2 has a great historical track record. I recently read an article by Shane Oliver...
Tuesday saw the ASX200 get savaged following a poor night on Wall Street and nerves ahead of the Feds pending interest rate decision, not to mention the market being closed for Australia Day creating the perfect storm for traders to have zero risk appetite. Its old news as we brace for this morning’s trade but less than 5% of the market managed to advance in the last session as we witnessed unrelenting broad-based selling wash through stocks, firstly lets quickly just evaluate what happened:
Many investors watched yesterday’s market with a large degree of trepidation and while the ASX200 bounced from its early morning lows it was definitely not a convincing recovery with the index still closing down 0.5%, making new 8-months lows and with only 32% of stocks managing to close in positive territory. While the aggressive selling witnessed on Friday wasn’t evident the underlying “risk off” theme continued as quality and defensive names were in demand across many sectors:
MM had been anticipating a very volatile 2022 for financial markets but its arrived faster than we expected, we’re only 3-weeks into January and the markets have already delivered some major swings:
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