The ASX200 again surrendered early gains on Tuesday and we ended the day down 0.6% with around 65% of stocks closing in negative territory, not a good Melbourne Cup for Australian equities. The value stocks were the standout losers as the market continued to worry about rising interest rates stifling global growth i.e. Financials -1.3%, Energy -1.1% & Materials -2.1%. China also continues to pressure the influential Australian iron ore and coal names but with panic comes both market tops and bottoms and as subscribers...
Monday saw some healthy intra-day strength within the iron ore names and we feel they are now at or very close to a low hence making them excellent risk / reward buys – probably the question I’ve heard the most over recent weeks has been “when should we buy BHP, RIO, FMG etc” , MM thinks the answer is basically now. If the banks can regain their mojo sooner rather than later then we feel the ASX will be looking good into Christmas assuming there are no hand grenades lobbed in the market by the RBA at 2.30pm today, after which of course the nation has just 30-minutes to digest the news before casting there eyes to the nearest TV screen to watch 24 horses run 3200m in around 3.3 minutes – apparently, Incentivise is going to win!
Australian stocks succumbed to the ever increasing weight of interest rate speculation on Friday, the aggressive weakness on the last day of October actually resulted in it being a down month. Fortunately the US reversed losses by their futures during our time zone to make fresh highs on Friday which should provide a much needed boost to stocks this morning – the SPI futures are pointing to early gains of almost 1%. The specific pressures around the RBA appear to be the reason for the ASX’s position in the underperformance corner last month:
The ASX200 slipped 0.25% yesterday but considering the generally negative leads from overseas indices and sheer panic that washed through Australian interest rate markets it actually felt like a solid performance. The selling frenzy that’s washed through bonds this week feels akin to how stocks plummeted when COVID first raised its head although its coverage is primarily limited to the financial press, for now:
The ASX200 climbed to fresh October highs yesterday morning only to get clobbered at 11.30am when markets saw Australia’s inflation rate significantly surprise on the upside – the RBA’s preferred gauge, the CPI trimmed mean YoY, came in at 2.1% for the 3rd quarter compared to expectations of 1.8%, importantly the economy is rapidly approaching the RBA’s 2-3% target band for the first time since 2015 when the cash rate averaged over 2% compared to todays 0.1%.
The ASX200 again tried to push higher early on Tuesday only to drift through the afternoon, this style of price action might often concern us but the local market just feels a little stretched this month, we still anticipate fresh highs into November / Christmas. All the action on Tuesday was on the stock / sector level as lithium stocks rallied while gold stocks gave back some of their recent gains but overall it was a quiet day as we see slowly & quietly say goodbye to October.
The ASX200 kicked off the last week of October in solid form rallying to new monthly highs in the morning before finally managing to close up 0.3% even as more stocks actually closed in negative territory. The resources names, led by the energy component, were the best on ground while the tech sector slipped lower but overall it was another quiet session as investors appear reticent to buy into strength, they must have read our notes!
Global stocks continue to encounter headwinds from a number of different areas and last week inflation was the standout raising its head across a number of countries, yet most indices continued to rally and are still hovering around their respective all-time highs. Also we’re approaching the seasonally very strong period for stocks which adds to any optimism. At this stage the liquidity driven stock market rally continues to win arm wrestles against all challengers!
The ASX200 continues to struggle to advance much above 7400 as it pays respect to the historical statistics in play i.e. the bulls may have to wait until the Melbourne Cup runners are off and running before we can see a sustained challenge on 7500, and above. Yesterday saw the index drift from its lunchtime highs in sympathy with US futures, the COVID re-opening names experienced further profit taking while the Real Estate Sector was the standout top performer.
The ASX200 rallied over 0.5% yesterday although it was up over 1% moving into lunch before we saw some weakness creep into the Resources & Energy Sectors. However it was still a solid session for the local index which enjoyed over 65% of stocks on the main board advance with a few noticeably accelerating north i.e. 6 stocks rallied by over 5% while only 1 culprit retreated by the same degree.
Monday saw some healthy intra-day strength within the iron ore names and we feel they are now at or very close to a low hence making them excellent risk / reward buys – probably the question I’ve heard the most over recent weeks has been “when should we buy BHP, RIO, FMG etc” , MM thinks the answer is basically now. If the banks can regain their mojo sooner rather than later then we feel the ASX will be looking good into Christmas assuming there are no hand grenades lobbed in the market by the RBA at 2.30pm today, after which of course the nation has just 30-minutes to digest the news before casting there eyes to the nearest TV screen to watch 24 horses run 3200m in around 3.3 minutes – apparently, Incentivise is going to win!
Australian stocks succumbed to the ever increasing weight of interest rate speculation on Friday, the aggressive weakness on the last day of October actually resulted in it being a down month. Fortunately the US reversed losses by their futures during our time zone to make fresh highs on Friday which should provide a much needed boost to stocks this morning – the SPI futures are pointing to early gains of almost 1%. The specific pressures around the RBA appear to be the reason for the ASX’s position in the underperformance corner last month:
The ASX200 slipped 0.25% yesterday but considering the generally negative leads from overseas indices and sheer panic that washed through Australian interest rate markets it actually felt like a solid performance. The selling frenzy that’s washed through bonds this week feels akin to how stocks plummeted when COVID first raised its head although its coverage is primarily limited to the financial press, for now:
The ASX200 climbed to fresh October highs yesterday morning only to get clobbered at 11.30am when markets saw Australia’s inflation rate significantly surprise on the upside – the RBA’s preferred gauge, the CPI trimmed mean YoY, came in at 2.1% for the 3rd quarter compared to expectations of 1.8%, importantly the economy is rapidly approaching the RBA’s 2-3% target band for the first time since 2015 when the cash rate averaged over 2% compared to todays 0.1%.
The ASX200 again tried to push higher early on Tuesday only to drift through the afternoon, this style of price action might often concern us but the local market just feels a little stretched this month, we still anticipate fresh highs into November / Christmas. All the action on Tuesday was on the stock / sector level as lithium stocks rallied while gold stocks gave back some of their recent gains but overall it was a quiet day as we see slowly & quietly say goodbye to October.
The ASX200 kicked off the last week of October in solid form rallying to new monthly highs in the morning before finally managing to close up 0.3% even as more stocks actually closed in negative territory. The resources names, led by the energy component, were the best on ground while the tech sector slipped lower but overall it was another quiet session as investors appear reticent to buy into strength, they must have read our notes!
Global stocks continue to encounter headwinds from a number of different areas and last week inflation was the standout raising its head across a number of countries, yet most indices continued to rally and are still hovering around their respective all-time highs. Also we’re approaching the seasonally very strong period for stocks which adds to any optimism. At this stage the liquidity driven stock market rally continues to win arm wrestles against all challengers!
The ASX200 continues to struggle to advance much above 7400 as it pays respect to the historical statistics in play i.e. the bulls may have to wait until the Melbourne Cup runners are off and running before we can see a sustained challenge on 7500, and above. Yesterday saw the index drift from its lunchtime highs in sympathy with US futures, the COVID re-opening names experienced further profit taking while the Real Estate Sector was the standout top performer.
The ASX200 rallied over 0.5% yesterday although it was up over 1% moving into lunch before we saw some weakness creep into the Resources & Energy Sectors. However it was still a solid session for the local index which enjoyed over 65% of stocks on the main board advance with a few noticeably accelerating north i.e. 6 stocks rallied by over 5% while only 1 culprit retreated by the same degree.
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