A slightly earlier edition of the Weekly Market Update this week with the Labour Day public holiday in Victoria next Monday.
The ASX200 outperformed global equities to the close of trade on Thursday rising +1.3% compared to the MSCI World Index which fell -0.2% in AUD terms.
Having been on track to return an impressive +2% gain for the week the ASX slipped -0.8% on Thursday as another rise in global bond yields saw growth stocks, in particular tech stocks fall further.
It is worth mentioning Thursday’s negative return of -0.8% occurred on the same day that many of the market’s largest companies went ex-dividend.
Given shares typically fall by the value of the dividend when they trade ex-dividend, the ASX200 return is actually more favourable than this number suggests.
For context, the ASX200 Accumulation Index which assumes dividends are reinvested (thereby negating the impact of a company going ex-dividend) fell -0.5% on Thursday.
Some of the bigger names to go ex-dividend this week were BHP Group (BHP), CSL (CSL), Rio Tinto (RIO) and Woolworths (WOW) which together account for 17.6% of the ASX200 benchmark – hardly an immaterial amount.
Investors can expect receipt of these dividends in the next 3 – 6 weeks.
If you ever needed more confirmation that central banks are here to help just look at the RBAs commitment to its bond purchasing program.
As global bond yields continue to spike the RBA stepped in as a natural buyer whilst offering to buy up to $4bn of government securities ranging from 2024 through to 2028.
Given all the talk about rising bond yields and near-term inflationary shock this is hardly the reaction of a central bank that is about to cut back on its accommodative monetary policy and hike rates.
The RBA kept rates at 0.1% when it met on Tuesday and whilst it maintained the overall size of its $200b QE bond purchasing program it did state, “the bank is prepared to make further adjustments to its purchases in response to market conditions.”
The RBA also reiterated its expectation that the cash rate was unlikely to rise until 2024 “at the earliest”.
We remain firm believers that core inflation data and employment data are still significantly below the level required for the RBA to commence winding back its accommodative monetary policy stance.
On Thursday PRIME hosted its first webinar for 2021 diving through some of the major themes that emerged post reporting season.
All members of the PRIME Investment Committee were in attendance and the discussion was driven by Marcus Bogdan – our Australian Equities specialist.
It is a very concise summary of where we are at in the cycle, what performed, what was disappointing and what the current outlook is.
Highlights from the webinar include:
Monday 8th March 2021 – Friday 12th March 2021
Index | Change | % | |
All Ordinaries | 7001 | +60 | +0.9% |
S&P / ASX 200 | 6761 | +88 | +1.3% |
Property Trust Index | 1388 | +48 | +3.6% |
Utilities Index | 5844 | +9 | +0.2% |
Financials Index | 6084 | +274 | +4.7% |
Materials Index | 16476 | -131 | -0.8% |
Index | Change | % | |
U.S. S&P 500 | 3768 | -43 | -1.1% |
London’s FTSE | 6651 | +168 | +2.6% |
Japan’s Nikkei | 28930 | -36 | -0.1% |
Hang Seng | 29237 | +257 | +0.9% |
China’s Shanghai | 3503 | -6 | -0.2% |
Monday 8th March 2021 – Friday 12th March 2021
Mark Johnson – Chairman of Investment Committee | (03) 8825 4738 |
Guy Silbert – Investment Manager | (03) 8825 4750 |
Mark Johnson | T: (03) 8825 4738 | Cameron Morcher | T: (03) 8825 4737 |
Livio Caiolfa | T: (03) 8825 4748 | Michelle Bromley | T: (03) 8825 4751 |
Marcus Ainger | T: (02) 9134 6292 | Nicole Lewis | T: (03) 8825 4734 |
Dylan Cresswell | T: (03) 8825 4707 | Nicholas Miller | T: (03) 8825 4722 |
Jarrod Rodda | T: (03) 8825 4729 |
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