The ASX200 rallied another +1% last week but the upside momentum is slowly waning although we still enjoyed more than 80% of sectors closing in positive territory, the Tech Sector led the line rallying +3.25%. The month to month stock & sector rotation continues to dominate proceedings under the hood e.g. the Energy Sector has been the standout of 2022 yet now it finds itself almost friendless while the hammered growth names are rallying akin a popping champagne cork, last week illustrated this perfectly:
The ASX200 rallied over 150-points last week taking the local markets gain to more than +5% in just 2-weeks, investors switched in earnest from defensive stocks & sectors just in time for MM to trim a few positions as indices reached our initial target for July. Interestingly it wasn’t the tech stocks which benefited on falling yields as the market continues look beyond the obvious, or perhaps simply 6-months in advance i.e. resources benefitted on the premise that central banks would be easing off on the rate hikes to avoid a recession.
The ASX200 enjoyed a strong week which saw the index rally +2.8% making fresh 5-week highs in the process, the Tech and Financials led the charge while only the defensive facing Healthcare and Consumer Staples Sector slipped slightly lower i.e. “risk on” has kicked back into vogue with a vengeance. However as we alluded to on Friday MM still labels the current advance as a likely “short squeeze” as opposed to fund managers calling a meaningful market bottom...
The ASX200 experienced another choppy week which threatened to break out on both the up and downside, but after 2-weeks the broad market remains basically unchanged for July. However under the hood the market's throwing up some interesting sector rotation, when we consider the extremely hawkish economic data we’ve received from a different number of countries, the outperformance by the likes of tech and healthcare suggests investors are tweaking their portfolios towards “peak inflation” occurring around now, and a possible recession in 2023, the following moves so far this month are certainly pointing this way:
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 rallied over 150-points last week taking the local markets gain to more than +5% in just 2-weeks, investors switched in earnest from defensive stocks & sectors just in time for MM to trim a few positions as indices reached our initial target for July. Interestingly it wasn’t the tech stocks which benefited on falling yields as the market continues look beyond the obvious, or perhaps simply 6-months in advance i.e. resources benefitted on the premise that central banks would be easing off on the rate hikes to avoid a recession.
The ASX200 enjoyed a strong week which saw the index rally +2.8% making fresh 5-week highs in the process, the Tech and Financials led the charge while only the defensive facing Healthcare and Consumer Staples Sector slipped slightly lower i.e. “risk on” has kicked back into vogue with a vengeance. However as we alluded to on Friday MM still labels the current advance as a likely “short squeeze” as opposed to fund managers calling a meaningful market bottom...
The ASX200 experienced another choppy week which threatened to break out on both the up and downside, but after 2-weeks the broad market remains basically unchanged for July. However under the hood the market's throwing up some interesting sector rotation, when we consider the extremely hawkish economic data we’ve received from a different number of countries, the outperformance by the likes of tech and healthcare suggests investors are tweaking their portfolios towards “peak inflation” occurring around now, and a possible recession in 2023, the following moves so far this month are certainly pointing this way:
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:
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