Note from the MD: Pressure back on after double record-breaking Tuesday

It’s been a busy week on markets and the action shows no signs of slowing.

It’s been a busy week on markets and the action shows no signs of slowing.

Yesterday saw Australia’s benchmark ASX 200 index (ASX: XJO) set new intraday and closing highs as profit reporting season started off with a bang. Materials and energy stocks were among the day’s biggest gainers.

Newly-listed health and wellness brand company Wellnex Life (ASX: WNX) had a piece of the action after seeing a joint venture with Chemist Warehouse come to fruition through the development of Australia’s first liquid soft gel paracetamol product – the first in the line of an extensive list of future product releases.

Join me tomorrow at 11am (AEST) for a special investor briefing with CEO George Karafotias where he will discuss Wellnex’s plans to continue their strong revenue growth by being first-to-market with more consumer-focused health and wellness products. Click here to book your spot.

After close of trade however both the Europe and US markets suffered broad equities sell-offs as investors moved into more defensive assets before the Federal Reserve releases its upcoming policy statement, expected to drop some time early tomorrow morning.

There was also some nervousness as investors waited for Apple, Alphabet, and Microsoft’s earnings reports to be published. All three beat expectations, but the reports weren’t published until after US markets closed.

Back to Australia now. Not only did the XJO break out to a new record high yesterday, it finally closed above its resistance point of 7400.  We see further upside in sight until a new resistance level is created. 

The 50 day MA has proven to be strong support for the index since the COVID-19 drop in March last year. We see the market finding support at the 50 day MA if it fails to consolidate higher.

The Small Ordinaries index (ASX: XSO) dipped 0.27% yesterday, but things were picking up at the smaller end of the market with the Emerging Companies index (ASX: XEC) lifting 0.11%

Big winners at the smaller end of town included Energy Metals (ASX: EME) which lifted 23.3%, Elixir Energy (ASX: EXR) which gained 20% and Japara Healthcare (ASX: JHC), which climbed 18.5%.

Japara’s gains came after the board unanimously agreed to a takeover by Little Company of Mary Health Care at $1.40 a share – representing a valuation of $380 million.

Shares in Japara were trading at $1.38 by close of business on Tuesday.

Earlier this morning the ABS’ also published its latest Consumer Price Index (CPI) data. I haven’t had time to make sense of it all yet but it will no doubt be on my things to do list this afternoon as talk of a return to inflation continues to gather pace.

In the meantime, let’s hope prices haven’t gone up too much – I’m hoping to spend a much-needed weekend out shopping now Melbourne has made it through lockdown.


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