Comments by Ben O'Leary – Co-Portfolio Manager
ASX 200 Heikin-Ashi chart – Another week heading sideways with no sign of a break. The fundamental picture isn’t getting any better and we’re struggling to find reasons to buy. Volatility is likely to pick up as results season ramps up.
S&P 500 index – Still moving higher thanks to Big Tech which is doing all it can to prop up the market all by itself. The sell signals last week are falling into the shadows after some strong numbers from the FAANG+ group.
BANK SECTOR – In a bit of a holding pattern ahead of CBA results August 12. Saw a little bit of strength on the back of APRA’s statement about allowing 50% payout ratios. Sad state of affairs when that’s good news. With bond yields stuck close to zero and parts of the country in extended lockdown there aren’t many positives around for the banks. Will take another look after CBA results.
Commonwealth Bank (CBA)
RESOURCES SECTOR – Continuing to see strength, though on a less aggressive trajectory. RIO results were ahead of most analyst expectations but still didn’t set the world on fire. It has just seen a little RSI sell signal but we have until mid-next week to decide if we want to buy it for the dividend. FMG just keeps kicking the lights out.
Rio Tinto (RIO)
Fortescue Metals (FMG)
ALL TECH INDEX – Seeing some sell signals but hasn’t truly broken its trend just yet. Propped up on tech hype flowing over from the US and there will likely be some results season casualties with so many companies priced for perfection. APT looking like it has found a short-term top.
ENERGY SECTOR – Remains on the slide. Its resurrection will come but not today and not while the global growth outlook remains so poor.
HEALTHCARE SECTOR – A mixed bag with the dominant player CSL dragging the sector lower.A rising US$ doesn't help most Healthcare stocks (A$ over 72c today). Remains a good long-term sector with stock picking required at the moment. SHL flying among others.
Sonic Healthcare (SHL)
GOLD SECTOR – Little pullback and RSI sell signal after a very strong run. An unstable economic background coupled with further stimulus packages and money printing will likely see support remain for the precious metal.
REIT SECTOR – Remains a polarising sector with industrial property stocks such as GMG kicking the lights out and retail like SCG heading south.
Goodman Group (GMG)
Scentre Group (SCG)
CONSUMER STAPLES SECTOR – Found a bit of support after threatening to turn down last week. A fairly dull sector in overbought territory.
CONSUMER DISCRETIONARY SECTOR – Still heading sideways and narrowing in range as lockdowns and further job support push the reality hit further into the future.
UTILITIES SECTOR – Tracking sideways as it has since April. Nothing to get the juices flowing.
TELECOM SECTOR – Steadied after a couple of weeks of weakness. TLS now oversold and one of the more attractive places to look for income over results season.