Please excuse the last few month’s fascination with bonds but last week painted a pretty conclusive picture of how bond yields continue to dictate the price of risk assets and in particular stocks.
The ASX200 had a quiet Thursday, especially when compared to the previous two sessions, the index closed up less than 2-points with losers actually slightly outnumbering the winners. Another strong performance by the Energy Sector managed to edge the index higher but outside of the likes of Whitehaven Coal (WHC) and Woodside Energy (WDS) it was a relatively uneventful trading day which felt at its most comfortable trading basically unchanged – no great surprise after already rallying +6.5% from Monday’s intra-day low.
The ASX200 enjoyed another major “risk on” session on Wednesday, we even saw weakness in the US futures ignored throughout our day session as small intra-day dips were bought before they hardly started – no great surprise to MM when we consider how bearish investors & fund managers had become. Readers should remember that last month’s Bank of Americas Fund Managers Survey showed Fund Managers were holding their lowest ever allocation to global equities, or in other words, as we’ve been pointing out who will be left to sell. However, we caution subscribers around becoming too bullish into strength:
The RBA demonstrated some admirable independence yesterday as it hiked interest rates by a moderate 0.25% ignoring hawkish rhetoric from other major central banks in the process, a great call in our opinion! With a large proportion of Australian mortgages going to be linked to the Official Cash Rate by the end of next year there’s undoubtedly going to be a significant headwind for the Australian consumer in the not too distant future, we believe this lag effect is likely to have played a significant role in the decision from Philip Lowe et al.
Stocks entered October in the same vein as the departed September i.e. weak and nervous. On Friday night global stocks fell to a 2-year low on growing concerns that hawkish central banks will plunge the world into a recession which by definition will lead to painful earnings contraction for the majority of listed companies. Today at 2.30pm the RBA is expected to hike rates another 0.5% even if they have been considering a more moderate 0.25%, MM believes it’s unlikely they will have the individual fortitude to buck the global trend and ease off on their recent hiking...
The ASX200 finally regained some of its much-needed Mojo yesterday finally managing to close up 92-points even after a sell-off into the close as US futures reversed sharply lower – again! Unfortunately, we remain confident that volatility will remain elevated into October but as we look through the noise MM is looking for ongoing signs that the market’s internal strength and the underlying sentiment are improving. Yesterday’s broad-based gains were a step in the right direction with well over 80% of the main board closing up on the day led by the resource stocks but with selling extremely thin on the ground we actually saw the index challenge the 6600 area early in the day.
The ASX200 fell another -0.5% yesterday after trading higher in the morning only to be buffeted lower following comments from the Whitehouse which threw cold water on any potential currency intervention to cap the rising $US plus Apple (AAPL US) announced it had shelved plans to increase iPhone production due to faltering demand, the 2 pieces of news sent US Futures sharply lower, dragging the SPI and local stocks down in its wake. There’s no doubt that at the moment the Fed and most fellow central banks have little concern about the negative impact of their rhetoric on stocks. As we said on Wednesday morning “further news-driven turbulence feels...
The ASX200 fought valiantly on Tuesday to finally close up +0.4% on tentative buying and a strong lead from US Futures during our day session however it needed a bounce by the Resources & Energy Sectors to lift the nervous market which still saw the losers outnumber the winners. As subscribers know we increased our exposure to stocks yesterday – I apologise to anyone who didn’t receive the SMS notification, we’re confident this issue will be resolved by Friday:
The ASX200 tumbled another 105-points yesterday closing less than 1% above this year’s low posted back in June, Monday’s selling was specifically focused in the Energy & Resources Sectors e.g. Whitehaven Coal (WHC) -14%, Woodside Energy (WDS) -5%, IGO Ltd (IGO) -7.6%, South32 (S32) -7% and BHP Group (BHP) -5.2%. Interestingly the market’s weakness wasn’t very broad-based for such a disappointing session with over 25% of stocks and 45% of sectors managing to close in positive territory – more on the divergence later.
Equities are experiencing a September to forget and although most indices haven’t yet broken below their June lows things are “feeling” worse this time around e.g. the S&P500 closed on Friday 1.6% above its mid-year low but the Dow ended the week at fresh lows for 2022. There was no really good news on either the macro-economic or geopolitical front but we feel it was a trifecta of semi-left-field news that sent stocks reeling e.g. the S&P500 tumbled -4.6% and while the ASX200 fared better only falling 2.4% it’s set to open down another -1.25% this morning. The problem for stocks came from 3 different continents which combined with rising interest rates created a major headwind for risk assets:
The ASX200 had a quiet Thursday, especially when compared to the previous two sessions, the index closed up less than 2-points with losers actually slightly outnumbering the winners. Another strong performance by the Energy Sector managed to edge the index higher but outside of the likes of Whitehaven Coal (WHC) and Woodside Energy (WDS) it was a relatively uneventful trading day which felt at its most comfortable trading basically unchanged – no great surprise after already rallying +6.5% from Monday’s intra-day low.
The ASX200 enjoyed another major “risk on” session on Wednesday, we even saw weakness in the US futures ignored throughout our day session as small intra-day dips were bought before they hardly started – no great surprise to MM when we consider how bearish investors & fund managers had become. Readers should remember that last month’s Bank of Americas Fund Managers Survey showed Fund Managers were holding their lowest ever allocation to global equities, or in other words, as we’ve been pointing out who will be left to sell. However, we caution subscribers around becoming too bullish into strength:
The RBA demonstrated some admirable independence yesterday as it hiked interest rates by a moderate 0.25% ignoring hawkish rhetoric from other major central banks in the process, a great call in our opinion! With a large proportion of Australian mortgages going to be linked to the Official Cash Rate by the end of next year there’s undoubtedly going to be a significant headwind for the Australian consumer in the not too distant future, we believe this lag effect is likely to have played a significant role in the decision from Philip Lowe et al.
Stocks entered October in the same vein as the departed September i.e. weak and nervous. On Friday night global stocks fell to a 2-year low on growing concerns that hawkish central banks will plunge the world into a recession which by definition will lead to painful earnings contraction for the majority of listed companies. Today at 2.30pm the RBA is expected to hike rates another 0.5% even if they have been considering a more moderate 0.25%, MM believes it’s unlikely they will have the individual fortitude to buck the global trend and ease off on their recent hiking...
The ASX200 finally regained some of its much-needed Mojo yesterday finally managing to close up 92-points even after a sell-off into the close as US futures reversed sharply lower – again! Unfortunately, we remain confident that volatility will remain elevated into October but as we look through the noise MM is looking for ongoing signs that the market’s internal strength and the underlying sentiment are improving. Yesterday’s broad-based gains were a step in the right direction with well over 80% of the main board closing up on the day led by the resource stocks but with selling extremely thin on the ground we actually saw the index challenge the 6600 area early in the day.
The ASX200 fell another -0.5% yesterday after trading higher in the morning only to be buffeted lower following comments from the Whitehouse which threw cold water on any potential currency intervention to cap the rising $US plus Apple (AAPL US) announced it had shelved plans to increase iPhone production due to faltering demand, the 2 pieces of news sent US Futures sharply lower, dragging the SPI and local stocks down in its wake. There’s no doubt that at the moment the Fed and most fellow central banks have little concern about the negative impact of their rhetoric on stocks. As we said on Wednesday morning “further news-driven turbulence feels...
The ASX200 fought valiantly on Tuesday to finally close up +0.4% on tentative buying and a strong lead from US Futures during our day session however it needed a bounce by the Resources & Energy Sectors to lift the nervous market which still saw the losers outnumber the winners. As subscribers know we increased our exposure to stocks yesterday – I apologise to anyone who didn’t receive the SMS notification, we’re confident this issue will be resolved by Friday:
The ASX200 tumbled another 105-points yesterday closing less than 1% above this year’s low posted back in June, Monday’s selling was specifically focused in the Energy & Resources Sectors e.g. Whitehaven Coal (WHC) -14%, Woodside Energy (WDS) -5%, IGO Ltd (IGO) -7.6%, South32 (S32) -7% and BHP Group (BHP) -5.2%. Interestingly the market’s weakness wasn’t very broad-based for such a disappointing session with over 25% of stocks and 45% of sectors managing to close in positive territory – more on the divergence later.
Equities are experiencing a September to forget and although most indices haven’t yet broken below their June lows things are “feeling” worse this time around e.g. the S&P500 closed on Friday 1.6% above its mid-year low but the Dow ended the week at fresh lows for 2022. There was no really good news on either the macro-economic or geopolitical front but we feel it was a trifecta of semi-left-field news that sent stocks reeling e.g. the S&P500 tumbled -4.6% and while the ASX200 fared better only falling 2.4% it’s set to open down another -1.25% this morning. The problem for stocks came from 3 different continents which combined with rising interest rates created a major headwind for risk assets:
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.
