After a nice rally over the last couple of weeks, the S&P/ASX 200 [ASX:XJO] took a breather this week as results season took some heat out of the bullishness.
Quarterly results from the banks have confirmed what we all knew. The cash grab budget has kneecapped the property market, with loan demand shrinking rapidly.
Westpac Banking Corporation [ASX:WBC] and Commonwealth Bank of Australia [ASX:CBA] fell 6%, while ANZ Group Holdings [ASX:ANZ] bucked the trend, climbing 4%.
As I explain in today’s Closing Bell video below, there is a risk that the ASX 200 confirms another false break of the all-time high and returns to the range of the past year.
That could see a quick 4% fall for starters, and send us back into the purgatory we have endured for so long.
The fact is that the indices have been poor at reflecting what has been going on beneath the surface. So, even if we return to a sideways market, there are still some interesting things going on.
The results season in the US is making investors question their apocalyptic views on the software sector.
Many of the stocks that were pounded during the Sasspocalypse are rebounding sharply.
That is feeding into the Aussie tech sector with the S&P/ASX Information Technology Index [ASX:XIJ] jumping 3% on Friday while the ASX 200 dropped 1%.
Wisetech Global [ASX:WTC] and Xero [ASX:XRO] are the standouts that look ripe for more upside.
There are also signs of life in uranium after an eight month correction. Contract pricing has been flying while spot prices languished. Since last year, long-term contract prices have jumped from US$80/lb to US$94-97/lb.
Spot prices can be a distraction in uranium since most uranium is traded via long-term contracts. If contract pricing shoots through US$100/lb, we should see uranium stocks catch a strong bid, and positive FID (Final Investment Decision) odds rise for some greenfield mines.
Copper remains strong, but there are some plumbing issues we need to consider as we move forward. Possible US tariffs on copper cathode from next year are causing a flood of copper to head to America.
The White House was supposed to have announced its intentions a few months ago. We should be prepared for some volatility in copper once the announcement lands.
Charlie and I discuss all of this and more in the video below.
Closing Bell
Regards,
Murray Dawes,
Retirement Trader, International Stock Trader and
Murray’s Trading Room
PS: In just one hour, I can show you how to get better at picking stocks… better at timing your entry… better at managing your risk… and better at knowing when to sell. You’ll learn all of this in my new online investing masterclass – free for a limited time. Go here for access.
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