Note from the MD: Markets tipped to ease after cracking 73 year old record

Markets have dipped on open this morning after Wall Street slipped over night – even so, Australian markets have been on a tear of late as we move into September off the back of a record-breaking August.

Markets have dipped on open this morning after Wall Street slipped over night – even so, Australian markets have been on a tear of late as we move into September off the back of a record-breaking August.

The benchmark ASX 200 index (ASX: XJO) lifted 30.4 points yesterday, or roughly 0.4%, spurred on by gains in the tech sector, with health stocks also helping push the market up.

That marks 11 consecutive months of gains for Australian markets, even as talk of a ‘double-dip’ recession – referring to a possible second technical recession in the coming months – mounts.

That 11 month block of consecutive gains hasn’t just helped the XJO climb 28.3% to new record highs, it also marks a 73-year record for the All Ordinaries.

We’ve also seen record dividend payouts this reporting season, with investors cumulatively reaping $33.1 billion which should be hitting their accounts towards the end of September, and could support further growth if investors look to put their money back into markets.

Pizza chain Domino’s also made some serious strides yesterday, closing at an all-time high of $156.70 – If that seems like a lot, you’d be right. The company is now the fourth most expensive on the ASX with a market capitalisation of $13.5 billion.

The XJO has been feeling resistance around the 3540 level again after testing this level during the session. The market has been trading sideways since the 18th of August and has maintained price action above the 50 Day MA. Implied Volatility is sitting at 11.36%, and the XJO’s IV rank is 2. We could see the 7540 level become an important pivot point in the coming sessions.

Just as we saw in the top 200 companies, Australia’s small and microcap sectors were able to notch up respectable gains on Tuesday.

The Emerging Companies index (ASX: XEC) was up 1.36% by the end of the session while the Small Ordinaries index (ASX: XSO) closed the day up 0.98%.

Standouts in the XSO included CLinuvel Pharmaceuticals (ASX: CUV), up 10.69%; Capricorn Metals (ASX: CMM), up 7.39%; Appen (ASX: APX), up 6.97%; and Australian Ethical (ASX: AEF), up 6.26%.

Australian Ethical has been gaining since releasing its full year result on 26 August, where it announced a record underlying profit of $11.1 million, up 19%.

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