The ASX200 rallied sharply into the close on Friday, reducing the weekly decline to 0.3%; it certainly felt far worse on Thursday morning – a classic case of “End of the Month” window dressing. At its worst on Thursday, the local market had pulled back 300 points or 3.8%, but come the close on Friday, it was smack in the middle of its last 4 months' trading range, hence our current market neutral stance.
The ASX200 slipped -1.1% last week, although it felt much worse on Thursday and Friday as profit-taking swept through the Resources Sector following steep corrections in copper and gold. The catalyst for the move into the weekend was the release of the Fed Minutes from April 30th – May 1st, in other words, a great insight into the current thinking of Jerome Powell et al. The meeting came hot on the heels of a deluge of economic data that demonstrated inflation was remaining sticky
The ASX200 enjoyed another solid week, finishing up +0.8% after retesting its all-time high on Thursday following market-friendly US inflation data on Wednesday night AEST. This week was a huge win for the Doves, with major economic data in both the US and Australia pointing towards an economic slowdown and inflation that might not be as sticky as many feared throughout April
The ASX200 enjoyed a strong week, closing up +1.6% even after a sharp drop on Thursday when the retail and banking sectors dragged the broader market lower. By Friday's close, 10 out of 11 sectors on the main board had closed higher, with only the Consumer Discretionary Sector finishing in negative territory. On the stock level, there were some standout performances on both sides of the ledger, while the local index finished 2% below its all-time high, lagging slightly on the global stage:
The ASX200 edged +0.7% higher last week as easing bond concerns saw the rate-sensitive stocks/sectors recover strongly. However, some of April's best-performing areas of the market encountered some profit-taking. For example, the Real Estate +3.2%, Tech +2.3%, and Consumer Discretionary +2.1% sectors advanced strongly, whereas the Materials Sector slipped -0.3%
The ASX200 experienced a news-packed, volatile week, closing down 107 points on Friday. It might surprise some subscribers to know that the ASX200 ended the week slightly higher; it certainly didn’t feel like it on Friday. Wednesday's strong CPI print cast a long cloud over the rate-sensitive stocks/sectors. Australian credit markets are now factoring in the very real risks of a rate hike in 2024 after looking for two cuts only two months ago.
The ASX200 endured a week to remember, closing down -2.8% on concerns that interest rates will remain “higher for longer” and increasing concerns that the Middle East tensions will deteriorate further after Israel retaliated against Iran following last week's drone attack. It's hard to imagine an amicable conclusion to the current problems in the Middle East, but we all hope it doesn't become another painful, prolonged affair like the Ukraine–Russia war, which has now entered its 26th month.
The ASX200 edged higher last week even though eight of the eleven main sectors closed lower. The influential Resources Sector's strong performance allowed the local market to eke out a +0.2% gain, while the rate-sensitive Real Estate Sector led the declines, ending the week down -2.7%. Investors had to weigh up some very conflicting news flow on the US inflation front, with a strong CPI on Wednesday night denting hopes of three rate cuts before Christmas before a tame PPI soothed inflation concerns, which was helped by ongoing dovish commentary from a number of Fed officials, both past and present.
With so much conflicting data and rhetoric, it's not surprising that volatility is increasing. MM still believes global interest rates are set to fall through 2024/5; hence, we remain optimistic about equities. However, the ongoing speculation around the timing of these said cuts looks set to keep both investors and traders on their toes. We continue to believe stocks/sectors will dance to the “three steps forward, two steps back” tune over the coming months until the future path of rate moves by the RBA, Fed, et al. becomes set in stone. As we’ve pointed out a few times recently, every month of 2024 has delivered a 210-310 pullback for the ASX200, with an average of the last three pullbacks taking the index to ~7650.
The ASX advanced 1.3% last week, but it failed to follow US stocks to fresh all-time highs as the RBA ended the week on a far more hawkish footing than the Fed. The FOMC saw Jerome Powel confirm that the Fed is still looking to cut interest rates three times in 2024, whereas Michele Bullock isn’t discounting rate hikes following Australia's surprisingly strong employment data on Thursday. On Friday, the RBA delivered the sobering message that borrowers can cope with higher interest rates, which led some to suggest further hikes will follow in 2024: “Strong conditions in the labour market, the large savings buffers accumulated by many borrowers during the pandemic and rising house prices are helping households to adapt to challenging economic conditions,”.
The ASX200 slipped -1.1% last week, although it felt much worse on Thursday and Friday as profit-taking swept through the Resources Sector following steep corrections in copper and gold. The catalyst for the move into the weekend was the release of the Fed Minutes from April 30th – May 1st, in other words, a great insight into the current thinking of Jerome Powell et al. The meeting came hot on the heels of a deluge of economic data that demonstrated inflation was remaining sticky
The ASX200 enjoyed another solid week, finishing up +0.8% after retesting its all-time high on Thursday following market-friendly US inflation data on Wednesday night AEST. This week was a huge win for the Doves, with major economic data in both the US and Australia pointing towards an economic slowdown and inflation that might not be as sticky as many feared throughout April
The ASX200 enjoyed a strong week, closing up +1.6% even after a sharp drop on Thursday when the retail and banking sectors dragged the broader market lower. By Friday's close, 10 out of 11 sectors on the main board had closed higher, with only the Consumer Discretionary Sector finishing in negative territory. On the stock level, there were some standout performances on both sides of the ledger, while the local index finished 2% below its all-time high, lagging slightly on the global stage:
The ASX200 edged +0.7% higher last week as easing bond concerns saw the rate-sensitive stocks/sectors recover strongly. However, some of April's best-performing areas of the market encountered some profit-taking. For example, the Real Estate +3.2%, Tech +2.3%, and Consumer Discretionary +2.1% sectors advanced strongly, whereas the Materials Sector slipped -0.3%
The ASX200 experienced a news-packed, volatile week, closing down 107 points on Friday. It might surprise some subscribers to know that the ASX200 ended the week slightly higher; it certainly didn’t feel like it on Friday. Wednesday's strong CPI print cast a long cloud over the rate-sensitive stocks/sectors. Australian credit markets are now factoring in the very real risks of a rate hike in 2024 after looking for two cuts only two months ago.
The ASX200 endured a week to remember, closing down -2.8% on concerns that interest rates will remain “higher for longer” and increasing concerns that the Middle East tensions will deteriorate further after Israel retaliated against Iran following last week's drone attack. It's hard to imagine an amicable conclusion to the current problems in the Middle East, but we all hope it doesn't become another painful, prolonged affair like the Ukraine–Russia war, which has now entered its 26th month.
The ASX200 edged higher last week even though eight of the eleven main sectors closed lower. The influential Resources Sector's strong performance allowed the local market to eke out a +0.2% gain, while the rate-sensitive Real Estate Sector led the declines, ending the week down -2.7%. Investors had to weigh up some very conflicting news flow on the US inflation front, with a strong CPI on Wednesday night denting hopes of three rate cuts before Christmas before a tame PPI soothed inflation concerns, which was helped by ongoing dovish commentary from a number of Fed officials, both past and present.
With so much conflicting data and rhetoric, it's not surprising that volatility is increasing. MM still believes global interest rates are set to fall through 2024/5; hence, we remain optimistic about equities. However, the ongoing speculation around the timing of these said cuts looks set to keep both investors and traders on their toes. We continue to believe stocks/sectors will dance to the “three steps forward, two steps back” tune over the coming months until the future path of rate moves by the RBA, Fed, et al. becomes set in stone. As we’ve pointed out a few times recently, every month of 2024 has delivered a 210-310 pullback for the ASX200, with an average of the last three pullbacks taking the index to ~7650.
The ASX advanced 1.3% last week, but it failed to follow US stocks to fresh all-time highs as the RBA ended the week on a far more hawkish footing than the Fed. The FOMC saw Jerome Powel confirm that the Fed is still looking to cut interest rates three times in 2024, whereas Michele Bullock isn’t discounting rate hikes following Australia's surprisingly strong employment data on Thursday. On Friday, the RBA delivered the sobering message that borrowers can cope with higher interest rates, which led some to suggest further hikes will follow in 2024: “Strong conditions in the labour market, the large savings buffers accumulated by many borrowers during the pandemic and rising house prices are helping households to adapt to challenging economic conditions,”.
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