Market Summary
The general market (XAO) was up this week, +3.22%, recouping all of the previous week’s losses and then some. The index is now at a new bull rally high. The XAO is back above a rising 13-Day Exponential Moving Average. Eight out of ten SP Industry Sectors were up. The only two sectors down were Health and Telecommunications. The Health Sector is dominated by export oriented stocks like CSL, Resmed and Cochlear. No matter how well these companies perform in their respective markets, they are being impacted by the strong Australian dollar. Telecommunications is dominated by Telstra, under threat from the Federal government. TLS is a natural defensive stock – not likely to outperform in a bull market; but the uncertainty about its future resulting from government policy has had a negative effect on its share price.
Of particular interest this week was the fact that only two out of the ten sectors outperformed the XAO. They were Materials and Financials. Of these, only the Financials recorded a new weekly bull rally high. This was a narrowly based surge lacking breadth.
Best Three Sectors:
Materials: +5.44%
Financials: +3.08%
Information Technology: +3.08%
Worst Three:
Consumer Discretionary: 1.13%
Telecommunications: -2.09%
Health: -2.38%
Risk Aversion was apparently absent with the two worst performers being Defensive Sectors while the other two Defensive Sectors were in the middle band.
Having said that, something is out of kilter. The Gold Sub-Sector (XGD) screamed up 11.73%. The Gold Index has been a consistent under-performer during the bull rally from March. This may be a ‘canary in the coal mine’.
Among the sub-sectors: Property Trusts up, +1.73%; Metals and Mining, +6.98%; 50 Leaders, +3.32%; and Small Ordinaries, +3.61%. The 50 Leaders was marginally better than the XAO but slightly worse than the Small Ordinaries. Risk Aversion/Risk Inclination was evenly balanced according to these measures. So the “Risk Aversion” evident in the readings of Telecommunications and Health may be due to other specific factors.
Chart One – Weekly % Change – Indices
No comments:
Post a Comment