The ASX200 experienced a choppy week which threatened to unravel on Wednesday only to come good on the home stretch with the local index finally closing up over +2% on broad based buying which saw over 80% of the main board close higher come Friday afternoon. However the real action was in the Resources Sector which ultimately closed mixed, overall this feels like a good result considering the carnage which was witnessed on Wednesday:
The ASX200 got hit around -0.4% in the match on Friday taking the index down 0.6% for a week which promised so much early on, the market was over 200-points higher on Tuesday afternoon! Weakness through the local market was most prevalent in sectors traditionally sensitive to an economic downturn courtesy off escalating recession fears e.g. Real Estate & Retail, while IT stocks failed to find encouragement from a pullback in bond yields. Through the week much of the day to day volatility was delivered by the miners with heavyweight BHP Group (BHP) trading in a greater than 7% range. Downgrades have been flowing through the Resources Sector with some prominent names getting whacked – MM took advantage of the volatility to buy back into OZ Minerals (OZL) as it hit fresh 18-month lows.
Last week saw the ASX200 stabilise and following a strong session on Friday even manage to close up +1.6% over the 5-days, an impressive effort considering the Resources Sector tumbled over -4.5% e.g. over the week we saw OZ Minerals (OZL) -5%, BHP Group (BHP) -5.9% and Santos (STO) -7.3%. MM have been talking about the potential for tech and growth stocks to bounce strongly for a while and Friday finally saw such an aggressive “risk on” move unfold as bond yields edge lower on recession fears although at MM we feel the tail end of tax loss selling probably helped release the cork from this particular bottle. Wherever we looked underperforming high beta stocks rallied strongly:
Last week saw the ASX200 whacked over 300-points or -4.2% as we edged under Mays low into the close on Friday, if we see a downside swing this month similar to those through April and May a test below 6800 feels inevitable over the coming few weeks – perhaps even on Monday! Unfortunately the markets feeling a little like a row of dominos at the moment, firstly we saw the undisputed bursting tech / growth bubble, this was followed by the battery names on June the 1st and then last week the influential banks joined the bear party, will the resources be next? As we said on Friday this was the worst week in 2-years and it certainly felt like it as the attention of the sellers was refocused to some previously strong names / sectors, a few that caught our attention:
Last week saw the ASX200 manage to extend its recovery to 3 consecutive weeks albeit in a “2-steps forward, 1-step back” manner with a strong performance by the resources offset losses by a tired Banking Sector. We are starting to see some stock / sector reversion creep into the market as we approach the EOFY although the tech stocks still haven’t found any buyers as they fail to enjoy any semblance of a recovery i.e. it was another very targeted “risk on” week.
While it certainly didn’t feel like it at times the ASX200 has managed to advance for 2 consecutive weeks aided by strong moves by the banks and resources, arguably the backbone of the Australian market. The index may be sitting ~6% below its late 2021 all-time high but the performance from a number of the market heavyweights is far more impressive:
The ASX200 finally ended another choppy and nervous week on the front foot with the index closing up +1.15% on Friday helping it to a +1% gain, its first weekly advance since April, overall an excellent performance considering the aggressive plunge on Thursday. The tech stocks finally attracted some buyers with a number of major sector names such as Altium (ALU), Technology One (TNE), NEXTDC (NXT) and Xero (XRO) all bouncing over 5% for the week.
The ASX200 ended an extremely tough week with some bargain hunting finally emerging on Friday which helped the index bounce strongly to close almost 2% higher, basically halving the week’s losses in the process. The story under the hood of the ASX has been fairly consistent throughout both May and 2022, high valuation / tech stocks have been hammered as bond yields scale multi-year highs courtesy of surging inflation. However when we have enjoyed positive days it has largely been driven by the same stocks springing back with a vengeance:
The ASX200 endured an abysmal Friday which finally saw the index close down -2.2%, the session saw only 6% of the main board manage to close in positive territory, conversely the same number of stocks fell by over -7%! There was nowhere to hide from the relentless selling with companies who reported being treated very harshly, even when the numbers like Macquarie’s (MQG) looked ok. To put the end of the weeks drop into perspective it was the local markets largest one day decline since Russia invaded the Ukraine back in February.
The ASX200 fought valiantly on Thursday / Friday to end the week down less than 1% with Fridays strong 78-point recovery taking the index back well above 7400, the market actually popped 10-points in the match to close on its high for the day and yet again find ourselves within striking distance of a fresh all-time high. The index has now spent 13-months rotating between 6750 and 7625, perhaps the infamous May will see a move to a fresh equilibrium although history would favour the bears.
The ASX200 got hit around -0.4% in the match on Friday taking the index down 0.6% for a week which promised so much early on, the market was over 200-points higher on Tuesday afternoon! Weakness through the local market was most prevalent in sectors traditionally sensitive to an economic downturn courtesy off escalating recession fears e.g. Real Estate & Retail, while IT stocks failed to find encouragement from a pullback in bond yields. Through the week much of the day to day volatility was delivered by the miners with heavyweight BHP Group (BHP) trading in a greater than 7% range. Downgrades have been flowing through the Resources Sector with some prominent names getting whacked – MM took advantage of the volatility to buy back into OZ Minerals (OZL) as it hit fresh 18-month lows.
Last week saw the ASX200 stabilise and following a strong session on Friday even manage to close up +1.6% over the 5-days, an impressive effort considering the Resources Sector tumbled over -4.5% e.g. over the week we saw OZ Minerals (OZL) -5%, BHP Group (BHP) -5.9% and Santos (STO) -7.3%. MM have been talking about the potential for tech and growth stocks to bounce strongly for a while and Friday finally saw such an aggressive “risk on” move unfold as bond yields edge lower on recession fears although at MM we feel the tail end of tax loss selling probably helped release the cork from this particular bottle. Wherever we looked underperforming high beta stocks rallied strongly:
Last week saw the ASX200 whacked over 300-points or -4.2% as we edged under Mays low into the close on Friday, if we see a downside swing this month similar to those through April and May a test below 6800 feels inevitable over the coming few weeks – perhaps even on Monday! Unfortunately the markets feeling a little like a row of dominos at the moment, firstly we saw the undisputed bursting tech / growth bubble, this was followed by the battery names on June the 1st and then last week the influential banks joined the bear party, will the resources be next? As we said on Friday this was the worst week in 2-years and it certainly felt like it as the attention of the sellers was refocused to some previously strong names / sectors, a few that caught our attention:
Last week saw the ASX200 manage to extend its recovery to 3 consecutive weeks albeit in a “2-steps forward, 1-step back” manner with a strong performance by the resources offset losses by a tired Banking Sector. We are starting to see some stock / sector reversion creep into the market as we approach the EOFY although the tech stocks still haven’t found any buyers as they fail to enjoy any semblance of a recovery i.e. it was another very targeted “risk on” week.
While it certainly didn’t feel like it at times the ASX200 has managed to advance for 2 consecutive weeks aided by strong moves by the banks and resources, arguably the backbone of the Australian market. The index may be sitting ~6% below its late 2021 all-time high but the performance from a number of the market heavyweights is far more impressive:
The ASX200 finally ended another choppy and nervous week on the front foot with the index closing up +1.15% on Friday helping it to a +1% gain, its first weekly advance since April, overall an excellent performance considering the aggressive plunge on Thursday. The tech stocks finally attracted some buyers with a number of major sector names such as Altium (ALU), Technology One (TNE), NEXTDC (NXT) and Xero (XRO) all bouncing over 5% for the week.
The ASX200 ended an extremely tough week with some bargain hunting finally emerging on Friday which helped the index bounce strongly to close almost 2% higher, basically halving the week’s losses in the process. The story under the hood of the ASX has been fairly consistent throughout both May and 2022, high valuation / tech stocks have been hammered as bond yields scale multi-year highs courtesy of surging inflation. However when we have enjoyed positive days it has largely been driven by the same stocks springing back with a vengeance:
The ASX200 endured an abysmal Friday which finally saw the index close down -2.2%, the session saw only 6% of the main board manage to close in positive territory, conversely the same number of stocks fell by over -7%! There was nowhere to hide from the relentless selling with companies who reported being treated very harshly, even when the numbers like Macquarie’s (MQG) looked ok. To put the end of the weeks drop into perspective it was the local markets largest one day decline since Russia invaded the Ukraine back in February.
The ASX200 fought valiantly on Thursday / Friday to end the week down less than 1% with Fridays strong 78-point recovery taking the index back well above 7400, the market actually popped 10-points in the match to close on its high for the day and yet again find ourselves within striking distance of a fresh all-time high. The index has now spent 13-months rotating between 6750 and 7625, perhaps the infamous May will see a move to a fresh equilibrium although history would favour the bears.
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