Equities are struggling as free money is withdrawn from the financial system and many stocks appear to be going on sale, recession led market corrections have only occurred roughly every 6-years since WW2 and while a little more downside wouldn’t surprise MM considering how much economic stimulus supported stocks through the GFC and COVID these should be exciting times for the informed investors not a time to panic – remember US stocks have already endured over 75% of their average recession led correction.
The ASX200 edged higher on Thursday as the broad market managed to successfully offset pockets of aggressive selling in the Resources Sector courtesy of some very tough commentary from Fed Chair Powell around the potential for a recession in the year ahead. The commodities markets have certainly been paying attention with both crude oil and copper plumbing multi-week lows over recent days:
The ASX200 slipped back into its recent bad habits yesterday with investors prepared to chase a few bargains into weakness but unfortunately, there remains a clear absence of buyers into any meaningful degree of strength – it appears we need some improvement on the macro level before some real confidence returns to stocks but this can often occur when least expected. However, through Wednesday’s session, it was a sharp decline by the S&P500 futures that changed the initial positive sentiment for the local market as recession fears intensified dragging down influential commodities like crude oil and copper, both were down well over...
The ASX200 opened strongly on Tuesday as anticipated but it was pleasant change compared to the rest of June that we managed to hold onto these gains although a surging S&P500 Futures market certainly helped the sentiment. The main Australian bourse ended the day up +1.4% with over 70% of the main board closing in positive territory. The Financials & Resources Sectors combined to lead the gains with many energy stocks reversing much of Mondays weakness, although a number of the miners struggled to maintain their gains through the afternoon implying they could experience further downside into July e.g. yesterday saw iron ore experience...
The ASX200 came under renewed pressure on Monday only from a different sector this time as the miners were smacked in line with their underlying commodities e.g. iron ore plunged 11% at one stage yesterday taking Fortescue Metals (FMG) down -8.6% in sympathy. Over 55% of the main board’s stocks rallied over the day but when the heavyweight resource stocks fall ~5% it’s always going to be tough going for the broad market. It feels like different market pockets/sectors are taking it in turns to attract sellers’ attention almost like dominos falling one at a time:
Global stocks have been smacked in 2022 with losses accelerating over the last few weeks primarily in our opinion because investors have simply lost confidence that central banks can / will balance inflation with economic growth, let’s just consider the RBA and some factors close to home:
The ASX200 struggled again on Thursday as it failed to embrace the bounce by overseas bourses following the 0.75% interest rate hike by the Fed, or maybe it was simply smarter expecting the recent equities downtrend to continue over the coming weeks – it would appear so this morning! Overall the session was another lacklustre performance which may have seen the winners and losers evenly matched but when the banks struggle the local index tends to follow suit, Westpac (WBC) for example has now tumbled -20% in just 2-weeks.
The ASX200 endured another bad day at the office on Wednesday with the index closing down a further -1.3% after flouting with positive territory at lunchtime. Yesterday’s fall was on a distinct lack of buying as opposed to aggressive selling - investors remaining very nervous, a pretty understandable mindset considering the press, both financial and mainstream e.g. yesterday saw Jarden’s suggest local house prices are set for their worst fall in over 40-years. The prospect of the Fed hiking interest rates by more than expected this morning felt like it was enough to send buyers searching for cover as cash feels the comfortable option for many at the moment, ironically a relatively poor performing...
The ASX200 was hammered another -3.6% yesterday with well over 90% of the main board closing in the red, we may have bounced from support below 6600 but the market clearly remains very nervous. Recent weeks have certainly reinforced the old saying “sell in May & go away”, probably more effectively than all but the most pessimistic bears were expecting. During periods of uncertainty and volatility its important to maintain a degree of perspective even if feel like running for the hills, a move that history tells us is not a prudent course of action for long-term investors.
Global stocks have experienced ever-increasing volatility through 2022 and while its easy to point the finger of blame directly at surging bond yields we believe the removal of liquidity is more specifically the issue although by definition they go hand in hand. What matters is where to from here so MM and our subscribers can add value (alpha) to our portfolios while both fear and opportunity increase by the week. The obvious place to start our search for answers is by reviewing the previous occasions when the Fed removed QE and its subsequent impact on stocks.
The ASX200 edged higher on Thursday as the broad market managed to successfully offset pockets of aggressive selling in the Resources Sector courtesy of some very tough commentary from Fed Chair Powell around the potential for a recession in the year ahead. The commodities markets have certainly been paying attention with both crude oil and copper plumbing multi-week lows over recent days:
The ASX200 slipped back into its recent bad habits yesterday with investors prepared to chase a few bargains into weakness but unfortunately, there remains a clear absence of buyers into any meaningful degree of strength – it appears we need some improvement on the macro level before some real confidence returns to stocks but this can often occur when least expected. However, through Wednesday’s session, it was a sharp decline by the S&P500 futures that changed the initial positive sentiment for the local market as recession fears intensified dragging down influential commodities like crude oil and copper, both were down well over...
The ASX200 opened strongly on Tuesday as anticipated but it was pleasant change compared to the rest of June that we managed to hold onto these gains although a surging S&P500 Futures market certainly helped the sentiment. The main Australian bourse ended the day up +1.4% with over 70% of the main board closing in positive territory. The Financials & Resources Sectors combined to lead the gains with many energy stocks reversing much of Mondays weakness, although a number of the miners struggled to maintain their gains through the afternoon implying they could experience further downside into July e.g. yesterday saw iron ore experience...
The ASX200 came under renewed pressure on Monday only from a different sector this time as the miners were smacked in line with their underlying commodities e.g. iron ore plunged 11% at one stage yesterday taking Fortescue Metals (FMG) down -8.6% in sympathy. Over 55% of the main board’s stocks rallied over the day but when the heavyweight resource stocks fall ~5% it’s always going to be tough going for the broad market. It feels like different market pockets/sectors are taking it in turns to attract sellers’ attention almost like dominos falling one at a time:
Global stocks have been smacked in 2022 with losses accelerating over the last few weeks primarily in our opinion because investors have simply lost confidence that central banks can / will balance inflation with economic growth, let’s just consider the RBA and some factors close to home:
The ASX200 struggled again on Thursday as it failed to embrace the bounce by overseas bourses following the 0.75% interest rate hike by the Fed, or maybe it was simply smarter expecting the recent equities downtrend to continue over the coming weeks – it would appear so this morning! Overall the session was another lacklustre performance which may have seen the winners and losers evenly matched but when the banks struggle the local index tends to follow suit, Westpac (WBC) for example has now tumbled -20% in just 2-weeks.
The ASX200 endured another bad day at the office on Wednesday with the index closing down a further -1.3% after flouting with positive territory at lunchtime. Yesterday’s fall was on a distinct lack of buying as opposed to aggressive selling - investors remaining very nervous, a pretty understandable mindset considering the press, both financial and mainstream e.g. yesterday saw Jarden’s suggest local house prices are set for their worst fall in over 40-years. The prospect of the Fed hiking interest rates by more than expected this morning felt like it was enough to send buyers searching for cover as cash feels the comfortable option for many at the moment, ironically a relatively poor performing...
The ASX200 was hammered another -3.6% yesterday with well over 90% of the main board closing in the red, we may have bounced from support below 6600 but the market clearly remains very nervous. Recent weeks have certainly reinforced the old saying “sell in May & go away”, probably more effectively than all but the most pessimistic bears were expecting. During periods of uncertainty and volatility its important to maintain a degree of perspective even if feel like running for the hills, a move that history tells us is not a prudent course of action for long-term investors.
Global stocks have experienced ever-increasing volatility through 2022 and while its easy to point the finger of blame directly at surging bond yields we believe the removal of liquidity is more specifically the issue although by definition they go hand in hand. What matters is where to from here so MM and our subscribers can add value (alpha) to our portfolios while both fear and opportunity increase by the week. The obvious place to start our search for answers is by reviewing the previous occasions when the Fed removed QE and its subsequent impact on stocks.
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