Tech leads market through 6100 (NWL)
WHAT MATTERED TODAY
Another strong session for the ASX with the market cracking back up through 6100 with the IT stocks leading the charge, particularly the BNPL space spearheaded by Zip Co (Z1P) which rallied 9% while online accounting business Xero (XRO), also a holding in the MM Growth Portfolio put on more than 5% - our skew towards the sector felt good today, although a few good days does not a summer make ! I cover off some of the aspects catching my eye today in a quick ~5 min recording below.
Wrap up of today’s trade ~5 mins
By the close, the ASX 200 was up by 66pts / +1.09%. Dow Futures are trading up 97pts/+0.35%
ASX 200 Chart
ASX 200 Chart
CATHCING MY EYE
Netwealth (NWL) +8.28%: FUA update today was a positive – there remains no sign that the flow into the independents is slowing down at this point. FUA grew 8% in the September quarter in a flat market with the ANZ wealth transition doing the bulk of the work. FUM was also substantially higher at 11% on the 4th quarter. A large portion of earnings from platforms come from the cash spread – the difference between interest earnt and paid to clients on cash holdings. With the RBA holding rates near zero, this spread has tightened significantly and been a drag on earnings in the space, Netwealth today confirmed that any further rate reductions would be absorbed by the company. Consolidation will continue in the space given the fragmentation in the independent offering – we recently saw Praemium and Powerwrap come together, it won’t be the last deal in the space. We like NWL – technically looks strong, and it’s a conviction way to buy a positive view on the broader market.
Netwealth (NWL) Chart
BROKER MOVES
· ARB Cut to Hold at EL & C Baillieu; PT A$28.20
· Wesfarmers Raised to Outperform at Macquarie; PT A$51 **Resides in MM Income Portfolio**
· Aristocrat Cut to Neutral at Macquarie; PT A$31.50
· Secos Group Rated New Buy at Canaccord; PT 25 Australian cents
· Whitehaven Raised to Lighten at Ord Minnett; PT A$1
· Xero Raised to Outperform at RBC; PT A$120 **Resides in MM growth Portfolio**
· Downer EDI Raised to Overweight at Morgan Stanley; PT A$5.60 **Covered yesterday in the MM Income Note**
· Eagers Automotive Cut to Sell at Morningstar
· Costa Cut to Sell at Morningstar
· Sandfire Raised to Neutral at Goldman; PT A$4.80
· ARB Cut to Underweight at JPMorgan; PT A$24
· Altium Rated New Positive at Evans & Partners Pty Ltd
· Tyro Payments Rated New Neutral at Goldman; PT A$3.20
· Corporate Travel Raised to Outperform at RBC; PT A$19
· Fortescue Reinstated Market Perform at BMO; PT A$16
OUR CALLS
No changes today
Major Movers Today
Have a great night
James & the Market Matters Team
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