The ASX200 ended last week down another -2.6% taking August’s pullback to -3.5% with two weeks still remaining. Escalating concerns around the Chinese economy combined with an ever-hawkish Fed saw buyers run for the hills with the influential Financial & Materials Sectors standout detractors ending the week down -3.6% and -4.3% respectively. Only the Real Estate and Healthcare Sectors closed higher over the 5-days with positive earnings as the main drivers in both cases i.e. Goodman Group (GMG) +11% and Cochlear (COH) +11.9%.
The ASX200 ended the week up just 0.2% with much of the action unfolding on the sector level as would be expected during reporting season. The Consumer Discretionary Sector was the best on the ground closing up almost +2% as the market became more optimistic towards the global economy - JP Morgan & Bank of America both scrapped their recession calls this week i.e., the “Goldilocks” scenario. It was a rare week for this year to see the Tech Sector as the market's worst performer closing down -1.6% as investors started to reposition themselves for a brighter 2H. On the stock level, the big moves were dominated by reporting season plus a sprinkling of general news:
The ASX200 ended the week down only -1.1%, it certainly felt much worse over the course of the 5 days following the downgrade of US Debt by rating agency Fitch. The yield-sensitive sectors dragged the market lower with the Utilities -3.4% and Real Estate -2.5% dominating the loser's enclosure while only the Consumer Discretionary Sector closed higher. Longer-dated bond yields rallied into Friday's US Employment data which is likely to have weighed on both of these sectors which have been looking for an end to the hiking cycle by central banks – a reversal of this move by bonds following a pretty benign jobs report is likely to see the stocks/sectors also reverse.
Despite a weak session on Friday, the market enjoyed a solid five days up by an aggregate +1.23% hitting new five-month highs in the process. All sectors made gains however it was the Energy & Technology shares that did best, while the more defensive Healthcare & Staples were relative underperformers. The ASX 200 has now oscillated back up towards the top of its trading range, just 229pts/3% below its all-time high set nearly 2-years ago. Interestingly, the 7632 high achieved back in 2021 occurred during the height of full year reporting season, with this year's results period kicking off on Monday.
The ASX200 ended the week basically unchanged after drifting lower on Friday under the weight of heavy selling in the Tech Sector following a weak session in the US on Thursday. Over the 5 days activity was again focused under the market’s hood with strong gains by the Financials offset primarily by losses in the Resources. We saw 2 areas of macro-economic news which dictated the relative performance, firstly strong economic data, including employment numbers locally, saw bond yields rise and secondly ongoing weak growth numbers out of China weighed on an already struggling commodities market:
This week saw the US CPI print come in lower than expected turning financial markets on their head, suddenly “disinflation” became the new buzzword on Wall Street with US inflation plumbing its lowest level since March 2021 and US 2-year yields falling over 0.5% from last week’s high. Equities embraced the news with the ASX200 rallying +3.7% to its best weekly close since April with interest rate sensitive stocks/sectors leading the charge whereas the defensive end of town struggled on the relative front:
Global bond yields posted fresh multi-year highs last week with the hawkish move sending stock investors running for cover. The RBA and Fed may have hit the “pause button” in recent months but bond markets, following hawkish rhetoric from central banks, now believe they will need to hike again in 2023 to arrest inflation. The major problem for equities was that investors had positioned themselves for a pivot/top sooner rather than later and even some potential for rate cuts before Christmas – we always believed economists were dreaming to hope central banks would start cutting interest rates in 2023.
The ASX200 edged higher on Friday in a pretty uneventful conclusion to what’s been a fascinating Financial Year, by now subscribers know that the broad-based market has shrugged off a blanket of negativity to end the year up over +10%, plus of course dividends. However, it’s now time to look forward, not back, as the market toys with the idea of peak interest rates this side of Christmas but pessimism persists towards earnings over the next year. A very famous investing/trading book called Reminiscences of a Stock Operator by Edwin Lefevre, which we highly recommend for “students” of the market, has a couple of sayings that we believe accurately reflect the position of both the last few and next few years:
The ASX200 experienced its worst 48 hours in many months to close out last week with waves of selling through the SPI Futures dragging the broad market lower – the ASX200 fell -3.8% from its Tuesday high. The brunt of the selling was born by the Resources and Tech Sectors with the former likely on increased recession fears whereas the latter came under pressure from rising bond yields and some profit taking into EOFY. There were some major names in the losers’ corner through the week while winners were far thinner on the ground e.g. on Friday less than 10% of the main board closed in positive territory,
The ASX200 ended last week up +1.8% with the influential Tech, Financial and Materials Sectors all closing up over 3%, if wasn’t for a painful downgrade by heavyweight CSL Ltd the index would have been testing multi-week highs. China lit the fuse in the miners while the Fed didn’t deliver any nasty surprises after a market-friendly inflation read on Tuesday and subsequent pause on interest rates on Thursday. We’ve mentioned a few times over recent weeks that the markets positioned too bearishly, which has been illustrated by how easily stocks have shrugged off a plethora of bad news but one glimmer of hope from Beijing and the markets threatening to break out on the upside after many weeks of consolidation.
The ASX200 ended the week up just 0.2% with much of the action unfolding on the sector level as would be expected during reporting season. The Consumer Discretionary Sector was the best on the ground closing up almost +2% as the market became more optimistic towards the global economy - JP Morgan & Bank of America both scrapped their recession calls this week i.e., the “Goldilocks” scenario. It was a rare week for this year to see the Tech Sector as the market's worst performer closing down -1.6% as investors started to reposition themselves for a brighter 2H. On the stock level, the big moves were dominated by reporting season plus a sprinkling of general news:
The ASX200 ended the week down only -1.1%, it certainly felt much worse over the course of the 5 days following the downgrade of US Debt by rating agency Fitch. The yield-sensitive sectors dragged the market lower with the Utilities -3.4% and Real Estate -2.5% dominating the loser's enclosure while only the Consumer Discretionary Sector closed higher. Longer-dated bond yields rallied into Friday's US Employment data which is likely to have weighed on both of these sectors which have been looking for an end to the hiking cycle by central banks – a reversal of this move by bonds following a pretty benign jobs report is likely to see the stocks/sectors also reverse.
Despite a weak session on Friday, the market enjoyed a solid five days up by an aggregate +1.23% hitting new five-month highs in the process. All sectors made gains however it was the Energy & Technology shares that did best, while the more defensive Healthcare & Staples were relative underperformers. The ASX 200 has now oscillated back up towards the top of its trading range, just 229pts/3% below its all-time high set nearly 2-years ago. Interestingly, the 7632 high achieved back in 2021 occurred during the height of full year reporting season, with this year's results period kicking off on Monday.
The ASX200 ended the week basically unchanged after drifting lower on Friday under the weight of heavy selling in the Tech Sector following a weak session in the US on Thursday. Over the 5 days activity was again focused under the market’s hood with strong gains by the Financials offset primarily by losses in the Resources. We saw 2 areas of macro-economic news which dictated the relative performance, firstly strong economic data, including employment numbers locally, saw bond yields rise and secondly ongoing weak growth numbers out of China weighed on an already struggling commodities market:
This week saw the US CPI print come in lower than expected turning financial markets on their head, suddenly “disinflation” became the new buzzword on Wall Street with US inflation plumbing its lowest level since March 2021 and US 2-year yields falling over 0.5% from last week’s high. Equities embraced the news with the ASX200 rallying +3.7% to its best weekly close since April with interest rate sensitive stocks/sectors leading the charge whereas the defensive end of town struggled on the relative front:
Global bond yields posted fresh multi-year highs last week with the hawkish move sending stock investors running for cover. The RBA and Fed may have hit the “pause button” in recent months but bond markets, following hawkish rhetoric from central banks, now believe they will need to hike again in 2023 to arrest inflation. The major problem for equities was that investors had positioned themselves for a pivot/top sooner rather than later and even some potential for rate cuts before Christmas – we always believed economists were dreaming to hope central banks would start cutting interest rates in 2023.
The ASX200 edged higher on Friday in a pretty uneventful conclusion to what’s been a fascinating Financial Year, by now subscribers know that the broad-based market has shrugged off a blanket of negativity to end the year up over +10%, plus of course dividends. However, it’s now time to look forward, not back, as the market toys with the idea of peak interest rates this side of Christmas but pessimism persists towards earnings over the next year. A very famous investing/trading book called Reminiscences of a Stock Operator by Edwin Lefevre, which we highly recommend for “students” of the market, has a couple of sayings that we believe accurately reflect the position of both the last few and next few years:
The ASX200 experienced its worst 48 hours in many months to close out last week with waves of selling through the SPI Futures dragging the broad market lower – the ASX200 fell -3.8% from its Tuesday high. The brunt of the selling was born by the Resources and Tech Sectors with the former likely on increased recession fears whereas the latter came under pressure from rising bond yields and some profit taking into EOFY. There were some major names in the losers’ corner through the week while winners were far thinner on the ground e.g. on Friday less than 10% of the main board closed in positive territory,
The ASX200 ended last week up +1.8% with the influential Tech, Financial and Materials Sectors all closing up over 3%, if wasn’t for a painful downgrade by heavyweight CSL Ltd the index would have been testing multi-week highs. China lit the fuse in the miners while the Fed didn’t deliver any nasty surprises after a market-friendly inflation read on Tuesday and subsequent pause on interest rates on Thursday. We’ve mentioned a few times over recent weeks that the markets positioned too bearishly, which has been illustrated by how easily stocks have shrugged off a plethora of bad news but one glimmer of hope from Beijing and the markets threatening to break out on the upside after many weeks of consolidation.
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