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...
Firstly, I hope you all had a great Easter break, a beautiful 4 days in Sydney where the sun was certainly appreciated. The ASX 200 added +0.61% for the shortened week with Gold & Travel-related stocks populating the leader board. We’re now 19 days into the market’s 2nd strongest month of the year with a gain of just 0.32% to speak of. The ‘old world’ is smashing the new with Utilities up 5.44% while the Information Technology sector languishes, down another 4.01% for the period. Bond yields the major influence on respective sector performance however as US quarterly reporting season heats up it’s important to remember MM’s preferred path for the coming period.
Since hitting a high of 7573 on the 5th of April, the ASX200 has drifted lower as it consolidates the gains achieved in the best March since 2009. The patience of the bulls is being tested however in MM’s view it remains just a matter of time before new highs are achieved for local stocks. Bond yields had a rest yesterday which relieved some pressure on sectors that cower at their ongoing advance while the resources & energy stocks continued to enjoy strength in their underlying commodity prices.
The ASX200 disappointingly reversed some early optimism yesterday to close down 0.42% however there was a lack of interest in the market shown through light volumes ahead of the Easter break. Despite this continued consolidation, MM’s view is unchanged into the end of April / early May:
A tepid start to the trading week locally with a small 0.10% gain at the index level courtesy of strength amongst the financial stocks which have enjoyed the onset of higher interest rates, the hope that margin pressure will ease along with some large looming dividends is a hard 1-2 combo to pass up. All the talk this year has been about how hot the Energy & Materials stocks have been and rightly so, however, it’s the boring/defensive sector of Ulilities that has been the quiet achiever. In a little over 3 months, the sector that comprises the likes of APA Group (APA), Origin Energy (ORG) & AGL Energy (AGL) is up over 17%, dramatically outperforming last year’s ‘go-to’ tech sector by more than 35%. As we often say at Market Matters, keep an open mind and 2022 is so far delivering on that call.
Last week saw the ASX200 consolidate its recent rally just below all-time highs despite the growing chorus for the RBA to act sooner rather than later and commence the inevitable interest rate tightening cycle, joining the US & Canada who raised by 0.25% in March and New Zealand who have now pushed through three rate increases taking the official cash rate to 1%. When the RBA cut rates way back in November of 2020 to the emergency setting of just 0.10% they based their decision on economic forecasts. By the end of 2022 they thought unemployment would be 6% and inflation would be 1.5%, as it stands now we have unemployment at 4% and inflation at 3.5%, a long way from these economic assumptions.
The local market endured a bad day at the office yesterday falling -0.6% as we followed the US futures lower through both their day session and again during our day time / their overnight session. Over 70% of the mainboards stocks slid on Thursday but it was again the growth stocks that weighed the most on the ASX with all members closing lower leaving the overall sector down -3.5%, ultimately it was a fairly uninspiring day that saw the SPI Futures close where they were trading at 10am.
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...
Firstly, I hope you all had a great Easter break, a beautiful 4 days in Sydney where the sun was certainly appreciated. The ASX 200 added +0.61% for the shortened week with Gold & Travel-related stocks populating the leader board. We’re now 19 days into the market’s 2nd strongest month of the year with a gain of just 0.32% to speak of. The ‘old world’ is smashing the new with Utilities up 5.44% while the Information Technology sector languishes, down another 4.01% for the period. Bond yields the major influence on respective sector performance however as US quarterly reporting season heats up it’s important to remember MM’s preferred path for the coming period.
Since hitting a high of 7573 on the 5th of April, the ASX200 has drifted lower as it consolidates the gains achieved in the best March since 2009. The patience of the bulls is being tested however in MM’s view it remains just a matter of time before new highs are achieved for local stocks. Bond yields had a rest yesterday which relieved some pressure on sectors that cower at their ongoing advance while the resources & energy stocks continued to enjoy strength in their underlying commodity prices.
The ASX200 disappointingly reversed some early optimism yesterday to close down 0.42% however there was a lack of interest in the market shown through light volumes ahead of the Easter break. Despite this continued consolidation, MM’s view is unchanged into the end of April / early May:
A tepid start to the trading week locally with a small 0.10% gain at the index level courtesy of strength amongst the financial stocks which have enjoyed the onset of higher interest rates, the hope that margin pressure will ease along with some large looming dividends is a hard 1-2 combo to pass up. All the talk this year has been about how hot the Energy & Materials stocks have been and rightly so, however, it’s the boring/defensive sector of Ulilities that has been the quiet achiever. In a little over 3 months, the sector that comprises the likes of APA Group (APA), Origin Energy (ORG) & AGL Energy (AGL) is up over 17%, dramatically outperforming last year’s ‘go-to’ tech sector by more than 35%. As we often say at Market Matters, keep an open mind and 2022 is so far delivering on that call.
Last week saw the ASX200 consolidate its recent rally just below all-time highs despite the growing chorus for the RBA to act sooner rather than later and commence the inevitable interest rate tightening cycle, joining the US & Canada who raised by 0.25% in March and New Zealand who have now pushed through three rate increases taking the official cash rate to 1%. When the RBA cut rates way back in November of 2020 to the emergency setting of just 0.10% they based their decision on economic forecasts. By the end of 2022 they thought unemployment would be 6% and inflation would be 1.5%, as it stands now we have unemployment at 4% and inflation at 3.5%, a long way from these economic assumptions.
The local market endured a bad day at the office yesterday falling -0.6% as we followed the US futures lower through both their day session and again during our day time / their overnight session. Over 70% of the mainboards stocks slid on Thursday but it was again the growth stocks that weighed the most on the ASX with all members closing lower leaving the overall sector down -3.5%, ultimately it was a fairly uninspiring day that saw the SPI Futures close where they were trading at 10am.
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.
Market Matters members receive daily market reports, real-time trade alerts, full access to 5 portfolios and dynamic company data.
Choose how you'd like to proceed:
We have a range of membership options to suit your needs and budget, why not join today and get unlimited access to the premium Market Matters service.
