China’s much anticipated release of further stimulus has underwhelmed, or at least it hasn’t delivered a positive surprise. The package worth 6 trillion yuan ($US1.26 trillion) + another 4 trillion yuan in a special bond facility is designed to help China’s leveraged local governments restructure their finances. In simple, terms, the centralised Government is backstopping local Governments so they can be more pro-growth in their decisions rather than worrying about big piles of debt. The amount and structure of the vehicle was largely well known, and while we finally got a number to attach to it, it was very much aligned with what had been leaked i.e. no great positive shock.
The ASX200 struggled last week, ending its worst week in 3-months, down 1.1% on broad-based losses as the market jumped from one hurdle to another. The US election is one variable that is now just a few days away—we’re sure everybody will be glad when that particular circus has left town.
Last week was a choppy affair for the ASX200, dominated by Tuesdays sharp-sell off as bond yields rallied to 3-month highs with credit markets reducing the number of rate cuts they expect over the next year. The index finally closed down 0.87% on broad based selling with consumer staples +0.02% the only sector managing to eke out a gain while the tech sector took the wooden spoon retreating ~4%. On the stock level, except for a strong performance by the gold miners, it was another mixed bunch of winners & losers
Last week was a choppy affair for the ASX200, which, even after Friday's aggressive 0.87% sell-off, still closed up 0.84% courtesy of a storming week for the financials. The action on the stocks/sector level remains more interesting than the too often tracked index, with the financials advancing +4.1% while the utilities, energy and tech sectors retreated 4.4%, 3.9% and 3.5%, respectively. We remain net bullish on the market into 2025, but if you’ve backed the wrong horse, it's still likely to be a tough ride.
Overseas indices were firm into the weekend, with European bourses setting the tone early, with the EURTO STOXX 50 gaining +0.68% and the German DAX +0.85%. In the US, the S&P500 closed above 5800 for the first time as the banking behemoths ushered in a promising start to the third-quarter earnings season by powering it and the Dow to fresh highs. A distinct broadening of the performance barometer saw JP Morgan Chase (JPM US) rise +4.4% after topping profit and revenue expectations, while Wells Fargo (W US) popped +5.6% on stronger-than-expected profits. Interestingly, Investors overlooked disappointing revenue and an 11% decline in net interest income.
Last week, the AX200 slipped -0.76% following weakness across the influential financial and materials sectors, and only the energy stocks encouraged the bulls. While China enjoyed its Golden Week holiday, investors’ attention reverted to the mounting tensions in the Middle East ahead of last night’s US employment data, which ultimately alleviated market fears about the health of the US economy. The winners & losers were an eclectic bunch this week as most sectors, outside of oil, went into a holding pattern
Last week, the AX200 edged up just +0.03%, but on the stock and sector level, it was anything but a quiet five days for local equities. The Materials Sector soared +9.4% while the financials fell 4.4% as major economic stimulus out of Beijing ignited optimism that the PBOC can reinvigorate the world's 2nd largest economy; the banks, after their impressive gains through 2024, were used as a funding vehicle. Also, we shouldn’t forget the extreme market overcrowded positioning, which led to last week's aggressive performance reversion plus, of course, Beijing’s new “whatever it takes” approach
Last week, the ASX200 advanced another +1.35%, taking the index to all-time highs. Gains were broad-based, with 8 of the main 11 sectors advancing by over 1.4%, while only the healthcare stocks weighed noticeably on the index. There was also some reversion evident with lithium and uranium plays surrendering some of last week's gains while the banks returned to the winners enclosure:
The ASX200 advanced +1.5% last week (inclusive of dividends) as the Materials Sector bounced back with a bang, while the high-flying financials were the only meaningful drag on the index. The out-of-favour commodities took it in turns to squeeze the shorts last week, with the lithium stocks soaring on Wednesday, passing the baton to uranium on Thursday, followed by coal and gold on Friday, ultimately delivering an impressive +6.2% gain for the Materials Sector over the week
The ASX200 slipped 1% last week, with Wednesday's +150-point plunge dominating the five days. Again, the rate-sensitive banks, real estate, and tech sectors stemmed the losses, but the broad market fell, with the sellers again paying particular attention to China-facing stocks. Last night, recession fears hit US tech and consumer discretionary sectors the hardest; the real estate stocks held firm on interest rate hopes, illustrating the fascinating landscape ahead into Christmas – it would catch traders off guard if China growth sentiment trumped that of the US into 2025, its certainly at a low point today!
The ASX200 struggled last week, ending its worst week in 3-months, down 1.1% on broad-based losses as the market jumped from one hurdle to another. The US election is one variable that is now just a few days away—we’re sure everybody will be glad when that particular circus has left town.
Last week was a choppy affair for the ASX200, dominated by Tuesdays sharp-sell off as bond yields rallied to 3-month highs with credit markets reducing the number of rate cuts they expect over the next year. The index finally closed down 0.87% on broad based selling with consumer staples +0.02% the only sector managing to eke out a gain while the tech sector took the wooden spoon retreating ~4%. On the stock level, except for a strong performance by the gold miners, it was another mixed bunch of winners & losers
Last week was a choppy affair for the ASX200, which, even after Friday's aggressive 0.87% sell-off, still closed up 0.84% courtesy of a storming week for the financials. The action on the stocks/sector level remains more interesting than the too often tracked index, with the financials advancing +4.1% while the utilities, energy and tech sectors retreated 4.4%, 3.9% and 3.5%, respectively. We remain net bullish on the market into 2025, but if you’ve backed the wrong horse, it's still likely to be a tough ride.
Overseas indices were firm into the weekend, with European bourses setting the tone early, with the EURTO STOXX 50 gaining +0.68% and the German DAX +0.85%. In the US, the S&P500 closed above 5800 for the first time as the banking behemoths ushered in a promising start to the third-quarter earnings season by powering it and the Dow to fresh highs. A distinct broadening of the performance barometer saw JP Morgan Chase (JPM US) rise +4.4% after topping profit and revenue expectations, while Wells Fargo (W US) popped +5.6% on stronger-than-expected profits. Interestingly, Investors overlooked disappointing revenue and an 11% decline in net interest income.
Last week, the AX200 slipped -0.76% following weakness across the influential financial and materials sectors, and only the energy stocks encouraged the bulls. While China enjoyed its Golden Week holiday, investors’ attention reverted to the mounting tensions in the Middle East ahead of last night’s US employment data, which ultimately alleviated market fears about the health of the US economy. The winners & losers were an eclectic bunch this week as most sectors, outside of oil, went into a holding pattern
Last week, the AX200 edged up just +0.03%, but on the stock and sector level, it was anything but a quiet five days for local equities. The Materials Sector soared +9.4% while the financials fell 4.4% as major economic stimulus out of Beijing ignited optimism that the PBOC can reinvigorate the world's 2nd largest economy; the banks, after their impressive gains through 2024, were used as a funding vehicle. Also, we shouldn’t forget the extreme market overcrowded positioning, which led to last week's aggressive performance reversion plus, of course, Beijing’s new “whatever it takes” approach
Last week, the ASX200 advanced another +1.35%, taking the index to all-time highs. Gains were broad-based, with 8 of the main 11 sectors advancing by over 1.4%, while only the healthcare stocks weighed noticeably on the index. There was also some reversion evident with lithium and uranium plays surrendering some of last week's gains while the banks returned to the winners enclosure:
The ASX200 advanced +1.5% last week (inclusive of dividends) as the Materials Sector bounced back with a bang, while the high-flying financials were the only meaningful drag on the index. The out-of-favour commodities took it in turns to squeeze the shorts last week, with the lithium stocks soaring on Wednesday, passing the baton to uranium on Thursday, followed by coal and gold on Friday, ultimately delivering an impressive +6.2% gain for the Materials Sector over the week
The ASX200 slipped 1% last week, with Wednesday's +150-point plunge dominating the five days. Again, the rate-sensitive banks, real estate, and tech sectors stemmed the losses, but the broad market fell, with the sellers again paying particular attention to China-facing stocks. Last night, recession fears hit US tech and consumer discretionary sectors the hardest; the real estate stocks held firm on interest rate hopes, illustrating the fascinating landscape ahead into Christmas – it would catch traders off guard if China growth sentiment trumped that of the US into 2025, its certainly at a low point today!
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