The Match Out: ASX's worst week in two years, Can’t hide in the banks, Xero bucks the trend

James Gerrish

Market Matters

The week ended on a sour note today with the ASX following the US market’s lead with inflation fears being the main driver. Banks found some support early in the day but ended near their lows as traders took risk off into a long weekend. Interest rate-sensitive sectors of Real Estate and the discretionary retailers took the brunt of the selling. The end result saw the market down -4.24%/-307 points for the week, the worst performance since April 2020.

  • The ASX 200 finished down -87pts/ -1.25% at 6932.
  • All sectors closed in the red but Healthcare (-0.26%) and Industrials (-0.38%) felt the least pain.
  • Real Estate (-2.85%), Consumer Discretionary (-1.69%) and Energy (-1.64%) were the hardest hit – a rarer day in the red for the energy stocks.
  • Alumina (ASX: AWC) -3.94%, hit on a Goldman’s downgrade, the investment bank raising a red flag around margins - they now have a SELL on the stock
  • Banks were down again today – they tried to rally but the negative sentiment towards the sector prevailed, Westpac (ASX: WBC) the worst of them down -1.51% while National Australia Bank (ASX: NAB) held up best, down by -0.67%
  • Xero (ASX: XRO) +4.03%, bucked the negative trend today to rally, they increased prices this week across the board. Its worthwhile thinking about tech stocks as either discretionary or non-discretionary, XRO in our view is non-discretionary which adds significantly to its appeal/
  • We highlighted Aristocrat (ASX: ALL) +0.40% yesterday & again this morning – we think this looks poised to rally from here – ditto for Resmed (RMD) +0.34% today.
  • Iron Ore was -1% lower in Asia today which actually resulted in the bulk miners outperforming the broader index – buyers of BHP into the dip this morning an obvious trend.
  • Gold was down -US$4/-0.21% in Asian trade today, settled $US1844 at our close.
  • Asian stocks were a mixed bag today, Nikkei the laggard falling -1.49% but Hong Kong +0.13% & China +0.63%
  • US Futures are all up, S&P +0.25%, Nasdaq +0.4%

ASX 200 chart

Sectors for the Week (Source: Bloomberg)


Stocks for the Week (Source: Bloomberg)


Broker moves

  • Lifestyle Communities Raised to Buy at Jarden Securities
  • Regis Resources Cut to Sell at Citi; PT A$1.90
  • Alumina Cut to Sell at Goldman; PT A$1.60
  • Allkem Rated New Buy at Clarksons Platou; PT A$16
  • Maas Group Rated New Outperform at Macquarie; PT A$5.20
  • Home Consortium Cut to Hold at Jefferies; PT A$5.76

Major movers today

Have a great weekend,

The Market Matters team.

Make informed investment decisions

At Market Matters, we write a straight-talking, concise, twice daily note about our experiences, the stocks we like, the stocks we don’t, the themes that you should be across and the risks as we see them. Click here for your free trial.

The Match Out will be available each day after the market close. Follow my profile to be notified when the latest report is live.

........
Livewire gives readers access to information and educational content provided by financial services professionals and companies ("Livewire Contributors"). Livewire does not operate under an Australian financial services licence and relies on the exemption available under section 911A(2)(eb) of the Corporations Act 2001 (Cth) in respect of any advice given. Any advice on this site is general in nature and does not take into consideration your objectives, financial situation or needs. Before making a decision please consider these and any relevant Product Disclosure Statement. Livewire has commercial relationships with some Livewire Contributors.

2 topics

James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.