SECTOR TRENDS MONITOR
The Transport sector topped the charts in the last week thanks to a bid for SYD. Shareholders are advised to hold on in case someone (Macquarie) launch a counter-bid. Energy topping the tables in the wake of the OPEC+ debacle. Defensive sectors starting to perform as the market tires and tops. Consumer Staples, Utilities in the top half of the table and resources up there as well as commodity prices will not lie down. Technology up this week but in the pack not leading in either direction. Healthcare surprisingly one of the worst sectors despite the A$ weakness and its defensive nature. Automobiles and Consumer Discretionary understandably underperforming as the froth blows off the economy and consumer confidence. Cyclical sectors like media and retail also seeing a cool off as growth prospects fade and as the NSW COVID outbreak gets out of control with no stimulus to match this time around. Banks losing momentum as interest rates dip.
ONE STOCK PORTFOLIO TOP TWENTY
We built all your one stock portfolio picks into a spreadsheet last week and are supposed to track them over 10 years not 10 days but here's the top of the League table anyway.
Wa have been highlighting the overbought nature of the market and a few minor technical sell signals this week. It's still firmly in uptrend so there's no reason to do anything, like selling, yet. Not for investors anyway. With the Central Banks holding it up this rally could last for years although the mention of a correction having to come is becoming commonplace if for no other reason than mean reversion reasons – which is not very scientific. Not sure that's enough to top us out with a specific event – no doubt we'll quickly find those in hindsight on the day the market does tip over.
Bollinger Band sell signal.
Moving averages see the 14 day break down through the 26 day. A minor sell signal. Now let's see if the 26 day can break the 50 day.
Volatility in Australia at bull market levels. Watch it for when it spikes, otherwise relax.
US MARKET in upttrend. No doubting it yet.
And a bit of a pop in volatility overnight but nothing material.
NASDAQ topping in the very short term.
European markets paused this week but still in uptrend.
Japanese stock market – Japan has entered another state of emergency as case numbers grow. Just ahead off thee Olympics with run from 28th July to 8th August and will now be without spectators.
The biggest event on the charts can be seen below. After the FOMC Minutes this week global bond yields have dropped sharply. Taken together global bond yields are telling us that growth and inflation have peaked. They are telling us that the best of the recovery rally (in GDP) and maybe the stock market, is behind us. Peak growth, peak inflation, peak stimulus. Peak stock market?
Currency sensitive stocks:
Bitcoin – the barometer of market exuberance is not very exuberant. Struggling to get off the floor.
We lead today with the CRB Commodity price index. This is a general gauge of commodity prices across all sectors. It is calculated using the arithmetic average of commodity futures prices with monthly rebalancing. The index consists of 19 commodities: Aluminum, Cocoa, Coffee, Copper, Corn, Cotton, Crude Oil, Gold, Heating Oil, Lean Hogs, Live Cattle, Natural Gas, Nickel, Orange Juice, RBOB Gasoline, Silver, Soybeans, Sugar and Wheat. Those commodities are sorted into 4 groups, with different weightings: Energy: 39%, Agriculture: 41%, Precious Metals: 7%, Base/Industrial Metals: 13%.
Iron ore holding up. Hold resources until it tips over. No sign of it happening.
Oil price art a 2 year high despite the OPEC+ inspired volatility this week.
Gold still in a bigger downtrend. Might do a bit better if the market doesn't.
Uranium – PDN the geared play.
Holding in there but losing momentum as interest rates top out – not good for sector margins.
No reason not to hold on.
Still badly lagging the oil price rally. Either a great recovery sector or such a slow recovery sector nobody is interested.
Should be doing better considering the peak in the A$. Will outperform if the market tips.
Still going although quite a few stocks in the sector are down on the week.
CONSUMER STAPLES & FOOD
Feature of the week is A2M bottoming. WOW and TWE solid. Defensive sector.
Carsales up 7%, the rest down. Is the auto boom over? ARB down 7% in two weeks.
PROPERTY – REITS
Should do well as bond yields fall. But not for growth investors. Slow recovery investors maybe.
ALL TECH SECTORS
Topping out again. Articles about how the technology sector in the US has lost its correlation with interest rates. Rates down IT up has been the norm. Not this week.
BUILDING CONSTRUCTION (and others)
LEISURE – GAMBLING & TRAVEL SECTORS
The transport index pops on the SYD bid.
Telstra pauses after a great week last week.