The ASX200 experienced a quiet week with the US Thanksgiving holiday giving investors and traders alike a reason to take a breather after November's strong performance – the index rotated in a tight 0.9% range before finally slipping less than 10-points. Under the hood, we witnessed some reversion to the month's recent moves as the euphoria around falling bond yields abated, Tech & Real Estate were the weakest two sectors, while the influential Energy, Financials and Materials Sectors were the only three sectors which managed to edge higher.
Last week was a volatile but overall positive time for the ASX200, with the local index finally closing up +1.05% after registering a fresh 7-week high on Wednesday following a market-friendly US CPI (inflation) print on Tuesday night – it hasn't been one-way traffic, but the drop by the local 3-year yields from 4.24% to 4.1% provided a sufficient tailwind to push stocks higher. The market reacting positively to falling bond yields is nothing new, but what did catch our attention last week was some performance catch-up/reversion on the stock level as we approach 2024, perhaps a combination of bond yield optimism and book squaring:
Last week was one to forget for MM with a few of our positions in our Active Growth Portfolio having a really tough time for a variety of reasons, e.g. Xero (XRO) -11.1%, Paladin Energy (PDN) -7%, and Whitehaven Coal (WHC) -3.8%. It felt like the only place that fared worse than us was the ESG names which continued their standout underperformance, e.g. Liontown Resources (LTR) -9.4%, IGO Ltd (IGO) -7.4% and Pilbara Minerals (PLS) -6.4% with all three of these making fresh 6-month lows, or worse – crowded trades often sound logical but a stock/market needs fresh buyers to push higher.
It wasn’t quite the running of the bulls at Pamplona, but after the selling we've witnessed through September and October, it was a very welcome “Relief Rally”, or perhaps more. The ASX200 ended last week up +3.4% from Monday's intra-day low, with the index rallying around 200-points over the last 3-days with strong buying in the rate-sensitive Real Estate +6.7%, Tech +4.5%, and Healthcare +4.3% sectors, laying the foundations for a stellar week while only the Utilities and energy stocks reined in the markets gains.
The ASX200 added to October's woeful performance, falling another -1% last week, taking the infamous month's decline to -3.15% with two sessions remaining – bring on Wednesday! Over the five days, the resources helped stem the losers, while the interest rate-sensitive real estate and tech names led the declines. Under the hood, there were some standout moves over the week in both directions as the index posted new lows for 2023
Last week saw broad-based weakness across the ASX200, the index closed down -2.1% after particularly aggressive selling on Thursday and Friday, the rate-sensitive Tech -5.1% and Consumer Discretionary -3.4% Sectors led the decline, while only the energy Sector closed higher over the 5-days as tensions increased across the Middle East, e.g. Whitehaven Coal (WHC) +12.3%, Santos (STO) +2.9%, Beach Petroleum (BPT) +2.9%, and Woodside Energy (WDS) +1.9%. The same two issues continue to weigh on stocks:
With over two weeks remaining, October is back in positive territory, although not in a convincing manner, the index is up +0.03%, while six out of the 11 sectors are higher. Not surprisingly, the Healthcare Sector is down -3.06%, but it probably would surprise most subscribers to know that the Energy Sector is faring worse, down -3.07%, even after the positive blip in oil prices following the attacks on Israel by Hamas – an illustration of why we believe the advance by oil and its related names is maturing fast although they should rally on Monday morning e.g. in the US Exxon Mobil (XOM) rallied +3.2%.
October has started in a very similar vein to September, with the ASX200 already down -1.3% as rising long-term bond yields continue to rattle equities. Over the last week, all eleven sectors closed lower with little respite for the bulls, with the index breaking to fresh lows for 2023, led by weakness in the energy and consumer discretionary names. It was a tough start to the new month for the MM Flagship Growth Portfolio, which holds a few of the standout losers last week courtesy of the aggressive “risk off” sentiment:
September is finally in the rear-view mirror with the ASX200 ending the month down -3.5% (excluding dividends). However, it was encouraging last week to see some “buying into dips” enter the market, with the index often ending at its highs for the day, the Energy Sector +1.98% was again the shining light while the rate-sensitive Tech and Real Estate Sectors, struggled, both falling over -1%. Bond yields again dominated proceedings as they continued to challenge their decade-highs, which led to further stock/sector rotation:
We’re entering the last week of September, and even after Friday's stellar recovery from the early lows, the local index is still down -3.2% with just five trading days remaining. The action was “fast & furious” during the week as investors strived to fathom the path of interest rates/bond yields into and through 2024. At MM, we don’t believe there were many surprises from central banks, but the volatility across equities suggests we were in the minority:
Last week was a volatile but overall positive time for the ASX200, with the local index finally closing up +1.05% after registering a fresh 7-week high on Wednesday following a market-friendly US CPI (inflation) print on Tuesday night – it hasn't been one-way traffic, but the drop by the local 3-year yields from 4.24% to 4.1% provided a sufficient tailwind to push stocks higher. The market reacting positively to falling bond yields is nothing new, but what did catch our attention last week was some performance catch-up/reversion on the stock level as we approach 2024, perhaps a combination of bond yield optimism and book squaring:
Last week was one to forget for MM with a few of our positions in our Active Growth Portfolio having a really tough time for a variety of reasons, e.g. Xero (XRO) -11.1%, Paladin Energy (PDN) -7%, and Whitehaven Coal (WHC) -3.8%. It felt like the only place that fared worse than us was the ESG names which continued their standout underperformance, e.g. Liontown Resources (LTR) -9.4%, IGO Ltd (IGO) -7.4% and Pilbara Minerals (PLS) -6.4% with all three of these making fresh 6-month lows, or worse – crowded trades often sound logical but a stock/market needs fresh buyers to push higher.
It wasn’t quite the running of the bulls at Pamplona, but after the selling we've witnessed through September and October, it was a very welcome “Relief Rally”, or perhaps more. The ASX200 ended last week up +3.4% from Monday's intra-day low, with the index rallying around 200-points over the last 3-days with strong buying in the rate-sensitive Real Estate +6.7%, Tech +4.5%, and Healthcare +4.3% sectors, laying the foundations for a stellar week while only the Utilities and energy stocks reined in the markets gains.
The ASX200 added to October's woeful performance, falling another -1% last week, taking the infamous month's decline to -3.15% with two sessions remaining – bring on Wednesday! Over the five days, the resources helped stem the losers, while the interest rate-sensitive real estate and tech names led the declines. Under the hood, there were some standout moves over the week in both directions as the index posted new lows for 2023
Last week saw broad-based weakness across the ASX200, the index closed down -2.1% after particularly aggressive selling on Thursday and Friday, the rate-sensitive Tech -5.1% and Consumer Discretionary -3.4% Sectors led the decline, while only the energy Sector closed higher over the 5-days as tensions increased across the Middle East, e.g. Whitehaven Coal (WHC) +12.3%, Santos (STO) +2.9%, Beach Petroleum (BPT) +2.9%, and Woodside Energy (WDS) +1.9%. The same two issues continue to weigh on stocks:
With over two weeks remaining, October is back in positive territory, although not in a convincing manner, the index is up +0.03%, while six out of the 11 sectors are higher. Not surprisingly, the Healthcare Sector is down -3.06%, but it probably would surprise most subscribers to know that the Energy Sector is faring worse, down -3.07%, even after the positive blip in oil prices following the attacks on Israel by Hamas – an illustration of why we believe the advance by oil and its related names is maturing fast although they should rally on Monday morning e.g. in the US Exxon Mobil (XOM) rallied +3.2%.
October has started in a very similar vein to September, with the ASX200 already down -1.3% as rising long-term bond yields continue to rattle equities. Over the last week, all eleven sectors closed lower with little respite for the bulls, with the index breaking to fresh lows for 2023, led by weakness in the energy and consumer discretionary names. It was a tough start to the new month for the MM Flagship Growth Portfolio, which holds a few of the standout losers last week courtesy of the aggressive “risk off” sentiment:
September is finally in the rear-view mirror with the ASX200 ending the month down -3.5% (excluding dividends). However, it was encouraging last week to see some “buying into dips” enter the market, with the index often ending at its highs for the day, the Energy Sector +1.98% was again the shining light while the rate-sensitive Tech and Real Estate Sectors, struggled, both falling over -1%. Bond yields again dominated proceedings as they continued to challenge their decade-highs, which led to further stock/sector rotation:
We’re entering the last week of September, and even after Friday's stellar recovery from the early lows, the local index is still down -3.2% with just five trading days remaining. The action was “fast & furious” during the week as investors strived to fathom the path of interest rates/bond yields into and through 2024. At MM, we don’t believe there were many surprises from central banks, but the volatility across equities suggests we were in the minority:
