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Morning report

What Matters Today: Are healthcare stocks set to benefit from falling bond yields?

Healthcare stocks caught our attention on Wednesday after their +1.3% advance. However, they’ve been a clear laggard in 2024, advancing only +2.1%, while four other sectors have delivered double-digit gains. The potential influence of the new wonder weight loss drug, Ozempic et al., has weighed on a couple of influential ASX names, but with interest rate cuts on the horizon, we question if this underperformance will continue. Another bonus from the sector is its label as a defensive play, a comforting addition to most portfolios with global equities pushing to fresh all-time highs.
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what matters today Market Matters
Morning report

Portfolio Positioning: Is another “great rotation” close at hand?

As the market slips into the Easter long weekend, some profit-taking felt evident on Tuesday, no great surprise considering the index has rallied over 15% from its November low. The afternoon selling wasn’t overly aggressive, but as we touched on yesterday morning, the markets are a touch bullish and long; hence, some book-squaring/selling by the weak longs didn’t encounter any significant resistance. One of the main themes of 2024 to date has been the strong getting stronger and often the weak getting weaker, even as the ASX200 forged to fresh all-time highs. A quick glance at some sectors three months into the year tells the tale: remember, the index is up a healthy +2.5%.
Read more
what matters today Market Matters
Morning report

What Matters Today: Reviewing five major stocks making fresh 52-week highs

A number of major ASX200 stocks hit fresh recent highs on Monday, led by heavyweight real estate favourite Goodman Group (GMG) – as we’ve discussed in the past, this is one particular holding we are bullish over the medium term and are “happy to let it run” – MM is long GMG in our Active Growth Portfolio. This morning, we deliberately looked at five stocks, not in MM portfolios, but it was pleasing to see Xero (XRO) and Sandfire (SFR) both continuing to deliver and joining GMG in the winner's enclosure – note we already looked at Webjet (WEB) earlier in this mornings report hence didn’t cover again.
Read more
what matters today Market Matters
Morning report

Macro Monday: A mellow Fed pushes US equities to fresh all-time highs

The ASX200 enjoyed a solid penultimate week of March, taking solace from the FOMC’s read on interest rates with the Materials, Real Estate and Financials leading the advance, whereas weakness in the Consumer Staples and Utilities Sectors illustrated it was another week of “risk on” for stocks. In line with global equities, especially the European stocks, our preferred scenario is to see a test of the 7900-8000 region over the coming weeks. Still, we are conscious that the seasonally weak “sell in May & go away” period is approaching fast.
Read more
what matters today Market Matters
Morning report

What Matters Today: MM takes a look at March’s four new additions to the ASX200

The ASX200 rebalances quarterly, which effectively means out with the old (poor performers) and in with the new (strong performers). Stocks need to meet a number of criteria to enter the ASX200, including market cap, liquidity, number of shareholders, and “free float.” This means the index effectively undergoes a quality filter on a regular basis where, unlike investors/traders, it exits stocks which aren’t cutting the proverbial mustard.
Read more
what matters today Market Matters
Morning report

What Matters Today: If rates have topped & property is in short supply, shouldn’t we be “all in”?

The Fed reiterated that it is expecting to cut interest rates three times in 2024, with June the most likely start of the pivot, and as we saw overnight, it is great news for risk assets. However, it might surprise some to see the Real Estate Sector struggle to keep up with its peers overnight, only advancing +0.26% compared to the S&P500, which advanced by +0.9%, and there are no obvious signs that this relative underperformance will change, primarily because the sector has already moved 25% from its late 2023 low – it’s a very similar picture on the ASX where most names remain up in the short term, but are still well below their post-COVID highs.
Read more
what matters today Market Matters
Morning report

Portfolio Positioning: Neither the RBA nor BOJ upset the bulls, how will the Fed fare?

Yesterday was all about central banks, with both the RBA and Bank of Japan (BOJ) updating their respective official cash rates. There were no major surprises from either, but equities embraced the cleared uncertainty, at least for another month. As I’m sure most subscribers know, the RBA left the cash rate at 4.35%, as was widely expected, and it was encouraging to see bond yields slip after the release as Michele Bullock & Co. dialled back their previous interest rate tightening bias now saying they are “not ruling anything in or out” on the next move in rates being either up, or down.
Read more
what matters today Market Matters
Morning report

What Matters Today: China’s upbeat industrial output offers a glimmer of hope to Beijing

The big news yesterday was China’s industrial production, which came in stronger than expected, rising 7% year on year in February, beating the anticipated 5% and making it the fastest pace of growth in two years. Notably, the markets are very negative towards China; hence, any ongoing signs of improvement are likely to see a dramatic move in some related areas of the market. Even retail sales came in better than expected yesterday, printing 5.5%, above economists’ forecasts of 5.2%, with online sales up an impressive +14.4% to start the year. With fixed asset investment up 4.2%, more than the expected 3.2%, it was a rare good day for the Chinese economic outlook.
Read more
what matters today Market Matters
Morning report

Macro Monday: Dr Copper surges higher. Can Iron Ore mirror the move?

Copper was the shining light in an otherwise tough week for local stocks, with the industrial metal surging almost 6%, testing 12-month highs in the process. Ironically, the advance coincided with iron ore making fresh 7-month lows, with the divergence between two of Australia’s most important exports certainly garnering plenty of attention. Iron ore has slipped over 30% since early January as Beijing fails to lift hopes around the health of their construction industry, leading to loss-making steel mills buying less ore and creating stockpiles at Chinese ports.
Read more
what matters today Market Matters
Morning report

What Matters Today: Do we like Macquarie’s sell call on the banks?

Yesterday, Macquarie came out with a rare call that it’s time to sell the “Big Four Banks,” and they’ve also advised clients to be underweight in everything! The crux of their view is that the current high valuation of the Australian banks isn’t justified by the fundamentals. They even doubled down on Westpac (WBC), moving from outperform to underperform; by definition, they must think their own shares are a sell. Last week, the banks hit multi-year highs, led by Commonwealth Bank (CBA), which posted all-time highs; hence, it's not hard to comprehend some kneejerk profit-taking.
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MM remains cautiously bullish toward the ASX200 around the 7800 level
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EMR
MM remains bullish towards EMR
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HLI
MM is cautiously bullish towards HLI under $4
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BXB
MM is neutral BXB around $16
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IWM
MM remains cautiously bullish towards US stocks
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MM is neutral on the Yen, around 151
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MM is cautiously bullish towards the US Healthcare Sector
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IXJ
MM is bullish on the ASX Healthcare Sector
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RMD
MM is considering switching /trimming RMD above $30
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CSL
MM is cautiously bullish CSL ~$285
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RHC
MM is long and bullish RHC
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PME
MM is bullish on PME short-term
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SHL
MM is now cautiously bullish towards SHL
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MM is cautiously bullish HCA while momentum remains strong
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Latest Reports

Morning report

Portfolio Positioning: Is another “great rotation” close at hand?

As the market slips into the Easter long weekend, some profit-taking felt evident on Tuesday, no great surprise considering the index has rallied over 15% from its November low. The afternoon selling wasn’t overly aggressive, but as we touched on yesterday morning, the markets are a touch bullish and long; hence, some book-squaring/selling by the weak longs didn’t encounter any significant resistance. One of the main themes of 2024 to date has been the strong getting stronger and often the weak getting weaker, even as the ASX200 forged to fresh all-time highs. A quick glance at some sectors three months into the year tells the tale: remember, the index is up a healthy +2.5%.

what matters today Market Matters
Morning report

What Matters Today: Reviewing five major stocks making fresh 52-week highs

A number of major ASX200 stocks hit fresh recent highs on Monday, led by heavyweight real estate favourite Goodman Group (GMG) – as we’ve discussed in the past, this is one particular holding we are bullish over the medium term and are “happy to let it run” – MM is long GMG in our Active Growth Portfolio. This morning, we deliberately looked at five stocks, not in MM portfolios, but it was pleasing to see Xero (XRO) and Sandfire (SFR) both continuing to deliver and joining GMG in the winner's enclosure – note we already looked at Webjet (WEB) earlier in this mornings report hence didn’t cover again.

what matters today Market Matters
Morning report

Macro Monday: A mellow Fed pushes US equities to fresh all-time highs

The ASX200 enjoyed a solid penultimate week of March, taking solace from the FOMC’s read on interest rates with the Materials, Real Estate and Financials leading the advance, whereas weakness in the Consumer Staples and Utilities Sectors illustrated it was another week of “risk on” for stocks. In line with global equities, especially the European stocks, our preferred scenario is to see a test of the 7900-8000 region over the coming weeks. Still, we are conscious that the seasonally weak “sell in May & go away” period is approaching fast.

what matters today Market Matters
Morning report

What Matters Today: MM takes a look at March’s four new additions to the ASX200

The ASX200 rebalances quarterly, which effectively means out with the old (poor performers) and in with the new (strong performers). Stocks need to meet a number of criteria to enter the ASX200, including market cap, liquidity, number of shareholders, and “free float.” This means the index effectively undergoes a quality filter on a regular basis where, unlike investors/traders, it exits stocks which aren’t cutting the proverbial mustard.

what matters today Market Matters
Morning report

What Matters Today: If rates have topped & property is in short supply, shouldn’t we be “all in”?

The Fed reiterated that it is expecting to cut interest rates three times in 2024, with June the most likely start of the pivot, and as we saw overnight, it is great news for risk assets. However, it might surprise some to see the Real Estate Sector struggle to keep up with its peers overnight, only advancing +0.26% compared to the S&P500, which advanced by +0.9%, and there are no obvious signs that this relative underperformance will change, primarily because the sector has already moved 25% from its late 2023 low – it’s a very similar picture on the ASX where most names remain up in the short term, but are still well below their post-COVID highs.

what matters today Market Matters
Morning report

Portfolio Positioning: Neither the RBA nor BOJ upset the bulls, how will the Fed fare?

Yesterday was all about central banks, with both the RBA and Bank of Japan (BOJ) updating their respective official cash rates. There were no major surprises from either, but equities embraced the cleared uncertainty, at least for another month. As I’m sure most subscribers know, the RBA left the cash rate at 4.35%, as was widely expected, and it was encouraging to see bond yields slip after the release as Michele Bullock & Co. dialled back their previous interest rate tightening bias now saying they are “not ruling anything in or out” on the next move in rates being either up, or down.

what matters today Market Matters
Morning report

What Matters Today: China’s upbeat industrial output offers a glimmer of hope to Beijing

The big news yesterday was China’s industrial production, which came in stronger than expected, rising 7% year on year in February, beating the anticipated 5% and making it the fastest pace of growth in two years. Notably, the markets are very negative towards China; hence, any ongoing signs of improvement are likely to see a dramatic move in some related areas of the market. Even retail sales came in better than expected yesterday, printing 5.5%, above economists’ forecasts of 5.2%, with online sales up an impressive +14.4% to start the year. With fixed asset investment up 4.2%, more than the expected 3.2%, it was a rare good day for the Chinese economic outlook.

what matters today Market Matters
Morning report

Macro Monday: Dr Copper surges higher. Can Iron Ore mirror the move?

Copper was the shining light in an otherwise tough week for local stocks, with the industrial metal surging almost 6%, testing 12-month highs in the process. Ironically, the advance coincided with iron ore making fresh 7-month lows, with the divergence between two of Australia’s most important exports certainly garnering plenty of attention. Iron ore has slipped over 30% since early January as Beijing fails to lift hopes around the health of their construction industry, leading to loss-making steel mills buying less ore and creating stockpiles at Chinese ports.

what matters today Market Matters
Morning report

What Matters Today: Do we like Macquarie’s sell call on the banks?

Yesterday, Macquarie came out with a rare call that it’s time to sell the “Big Four Banks,” and they’ve also advised clients to be underweight in everything! The crux of their view is that the current high valuation of the Australian banks isn’t justified by the fundamentals. They even doubled down on Westpac (WBC), moving from outperform to underperform; by definition, they must think their own shares are a sell. Last week, the banks hit multi-year highs, led by Commonwealth Bank (CBA), which posted all-time highs; hence, it's not hard to comprehend some kneejerk profit-taking.

what matters today Market Matters
more
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