Stocks opened slightly higher on Friday and with the US settling into its Thanksgiving long weekend everything was pointing to a low volume quiet day, how things changed over the ensuing hours - we’ve repeatedly said the market will breakout when least expected and that’s one call we certainly got right - just not the direction we were after:
A small bounce on Friday saw the ASX200 close out the week down 0.6%, a pretty good effort considering Commonwealth Bank (CBA) plunged over $10 taking the influential Banking Sector along for the ride – it doesn’t matter how big or powerful you are the markets not tolerating mediocrity when companies report. With ongoing weakness by a number of resources stocks it was left to the growth sector, primarily IT and healthcare to provide some backbone to the local index – this was almost a mirror image of last week’s sector performance which probably helps explain why the ASX200 has gone nowhere for many weeks.
Friday saw the AX200 close out the week little changed courtesy of a 4.7% rally by the Resources Sector, the other 10 sectors all declined over the week with the interest rate sensitive Healthcare, Real Estate and IT Sectors worst on ground. The local index actually felt worse last week due to the broad based nature of the selling but we’re still only 2.5% below Augusts all-time high. We witnessed another failed attempt on the 7475 resistance level on Friday, if / when we close above 7480 don’t be short is the message I would pass on to traders.
The AX200 rallied almost 2% last week as bond yields fell even after the RBA abandoned its “yield curve control policy”, the impact is going to be felt by many homeowners with fixed rate mortgages already being hiked this week e.g. St George’s fixed 3-year increased from just over 2% to 2.39% courtesy of the RBA no longer anchoring local 3-year bond yields to 0.1% plus for good measure they’ve started to prime the market for potential rate rises in 2023.
The AX200 was clobbered 1.44% on Friday to send the local index into the red for both the week and month, things were looking good on the open but the combination “end of month shenanigans” and bond market turmoil appeared to finally take its toll. There’s no doubt the last week of October 2021 will be remembered by all interest rate traders as the time the market kicked the RBA’s butt, whether its simply Round 1 or the end of Philip Lowes fixation on 2024 before we see higher Australian interest rates only time will tell
The AX200 continues to grind towards all-time highs even in the face of ongoing adverse news, last week it was soaring bond yields and a pullback in commodities but as has been the case throughout 2021 when one sector struggles another one steps up to more than compensate e.g. last week saw the financials and real estate sectors offset losses by the resources stocks. This has been the basic narrative during the steady advance of 2021 implying if the selling vanishes as is so typical into Christmas hold onto your hats!
The AX200 enjoyed a strong end to the week making fresh highs for October on Friday as the unusual combination of Tech and Resources banded together to drag the index into positive territory for the week. Suddenly the statistics & seasonality factors are combining nicely for the bulls:
As we make new highs for the month on the 15th the strong likelihood is we’ve not only seen the low for October at 7157 but also the quarter which has very bullish implications.
The average quarterly range since the COVID outbreak is well over 500-points implying from extrapolation that there’s a strong likelihood that the ASX200 can achie
The AX200 staged a solid recovery last week closing the shortened week, for some, up 1.87% with the Energy & Financial Sectors leading the line but with only the healthcare names closing in the red it was an encouraging solid broad-based effort. It still doesn’t feel like any “new money” is entering the market but with 3 of the “Big 4” banks due to trade ex-dividend in November we may see some buying in anticipation of the attractive payouts plus of course a large portion of these funds often returns to the market – the next few weeks is historically a very strong time for the sector which has a major positive influence on the local index.
The AX200 waved goodbye to September on a positive note only for October to start with a 2% plunge, history tells us this is usually an excellent time to start accumulating stocks but as is always the case near lows equities certainly feel vulnerable to further declines. Investors have started considering the attractive dividends on offer from the banks in November plus of course the much anticipated “Santa Claus Rally” but there are a couple of important hurdles to be cleared
Trading on the ASX was dominated last week by China Evergrande as the massive property developer watched its stock continue to crash as doubts whether it could meet looming interest payments intensified by the day - the company only owes a mere $US305bn, or more than twice the market cap of BHP Group (BHP)
A small bounce on Friday saw the ASX200 close out the week down 0.6%, a pretty good effort considering Commonwealth Bank (CBA) plunged over $10 taking the influential Banking Sector along for the ride – it doesn’t matter how big or powerful you are the markets not tolerating mediocrity when companies report. With ongoing weakness by a number of resources stocks it was left to the growth sector, primarily IT and healthcare to provide some backbone to the local index – this was almost a mirror image of last week’s sector performance which probably helps explain why the ASX200 has gone nowhere for many weeks.
Friday saw the AX200 close out the week little changed courtesy of a 4.7% rally by the Resources Sector, the other 10 sectors all declined over the week with the interest rate sensitive Healthcare, Real Estate and IT Sectors worst on ground. The local index actually felt worse last week due to the broad based nature of the selling but we’re still only 2.5% below Augusts all-time high. We witnessed another failed attempt on the 7475 resistance level on Friday, if / when we close above 7480 don’t be short is the message I would pass on to traders.
The AX200 rallied almost 2% last week as bond yields fell even after the RBA abandoned its “yield curve control policy”, the impact is going to be felt by many homeowners with fixed rate mortgages already being hiked this week e.g. St George’s fixed 3-year increased from just over 2% to 2.39% courtesy of the RBA no longer anchoring local 3-year bond yields to 0.1% plus for good measure they’ve started to prime the market for potential rate rises in 2023.
The AX200 was clobbered 1.44% on Friday to send the local index into the red for both the week and month, things were looking good on the open but the combination “end of month shenanigans” and bond market turmoil appeared to finally take its toll. There’s no doubt the last week of October 2021 will be remembered by all interest rate traders as the time the market kicked the RBA’s butt, whether its simply Round 1 or the end of Philip Lowes fixation on 2024 before we see higher Australian interest rates only time will tell
The AX200 continues to grind towards all-time highs even in the face of ongoing adverse news, last week it was soaring bond yields and a pullback in commodities but as has been the case throughout 2021 when one sector struggles another one steps up to more than compensate e.g. last week saw the financials and real estate sectors offset losses by the resources stocks. This has been the basic narrative during the steady advance of 2021 implying if the selling vanishes as is so typical into Christmas hold onto your hats!
The AX200 enjoyed a strong end to the week making fresh highs for October on Friday as the unusual combination of Tech and Resources banded together to drag the index into positive territory for the week. Suddenly the statistics & seasonality factors are combining nicely for the bulls:
As we make new highs for the month on the 15th the strong likelihood is we’ve not only seen the low for October at 7157 but also the quarter which has very bullish implications.
The average quarterly range since the COVID outbreak is well over 500-points implying from extrapolation that there’s a strong likelihood that the ASX200 can achie
The AX200 staged a solid recovery last week closing the shortened week, for some, up 1.87% with the Energy & Financial Sectors leading the line but with only the healthcare names closing in the red it was an encouraging solid broad-based effort. It still doesn’t feel like any “new money” is entering the market but with 3 of the “Big 4” banks due to trade ex-dividend in November we may see some buying in anticipation of the attractive payouts plus of course a large portion of these funds often returns to the market – the next few weeks is historically a very strong time for the sector which has a major positive influence on the local index.
The AX200 waved goodbye to September on a positive note only for October to start with a 2% plunge, history tells us this is usually an excellent time to start accumulating stocks but as is always the case near lows equities certainly feel vulnerable to further declines. Investors have started considering the attractive dividends on offer from the banks in November plus of course the much anticipated “Santa Claus Rally” but there are a couple of important hurdles to be cleared
Trading on the ASX was dominated last week by China Evergrande as the massive property developer watched its stock continue to crash as doubts whether it could meet looming interest payments intensified by the day - the company only owes a mere $US305bn, or more than twice the market cap of BHP Group (BHP)
