Rotation, Rotation, Rotation
A tough day for the Aussie market today giving back most of the gains that we’d eked out over the past 4 sessions. A weak open courtesy of more shenanigans from Nth Korea firing another shot across the bow of Japan, while trends in the US & Europe overnight led to some decent weakness in some sectors of the market early. There was a whimper of hope following the markets midday low however it was short lived and sellers finished on top today - with the market closing just 9 points from the daily low.
The trends we’ve been flagging for some time now continued to play out with weakness amongst the miners, to be the weakest sector on the board while they were followed closely by the interest rates sensitive yield stocks, which also copped it on the chin as global interest rates / bond yields have ticked higher in the last few days. As subscribers would know, we think higher rates are one of the big ticket trends for the remainder of this year and this will have a big bearing of where we put our money.
I was hoping to get an extended version of ‘Direct From The Desk’ out today, explaining our views around sector rotation in more detail given its been the topic of discussion this week – and it’s been on show, however time got away from me. I’ll do one early next week for members.
On the market today, this IT stocks were best on ground adding 0.78% to an already strong week , whilst Materials were the worst off, down 1.88% for the day. Overall, the market had a range of +/- 41 points, a high of 5727, a low of 5686 and a close of 5695, down 43pts, or -0.76%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Despite the market only closing 25points higher for the week, there has clearly been a lot of movement under the hood. Comparing the monthly moves vs the weekly moves for sectors is interesting and highlights where money is now flowing to. The financials index has fallen 2.78% this month, but added 2.87% this week – A key reversal for the sector. Even more interestingly, the Utilities sector has fallen 3.55% this week, but only off 2.56% for the past month – highlighting this year’s love affair for the sector is coming to an end.
Sectors Moves Past Month
Sector Moves Past Week
Have a great weekend and keep an eye out for the report on Sunday
The Market Matters Team
Disclosure
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