Uncategorized

Note from the MD: Markets’ modest gains bely action-packed day of trading

September 15, 2021

Note from the MD: Markets’ modest gains bely action-packed day of trading

You’d be forgiven for thinking yesterday’s session was a quiet one after looking at the ASX 200’s headline figures. The benchmark index eked out only a modest 12 point (0.2%) gain by close of trade.

You’d be forgiven for thinking yesterday’s session was a quiet one after looking at the ASX 200’s headline figures. The benchmark index eked out only a modest 12 point (0.2%) gain by close of trade.

In reality, though, Tuesday’s session was anything but quiet. Iron ore prices dropped back 4.5% while oil prices rallied, hoisting the energy sector up with it (up 4.5%, to be exact).

But the biggest news of the day came from the telecommunications sector, after Uniti Group (ASX: UWL) executive director (and former Vocus chair) Vaughan Bowen was charged with insider trading – charges he’s adamantly denied.

Regardless of the outcome, the case highlights that black swan events – whether they affect a company like Uniti, or the entire global economy – can strike at any time.

Uniti shares dropped nearly 18% after the news broke, but clawed some of that back to finish the day down 4.99%.

Today, analysts are tipping the market to drop 34 points after stocks fell in the US overnight, after a weaker-than-expected US CPI print. That’s been taken as a sign the Federal Reserve may have more flexibility to wind down its stimulus programs. 

The market continued trading below the 50 DMA for the 3rd consecutive day, and tested the 7400 level during the session. We will be watching for price action around the 50 DMA over the short term. If the market can open break through this resistance we expect to see price action around the 7500 level.

Moving along to the smaller end of town. The Emerging Companies Index (ASX: XEC) lifted 0.56% while the Small Ordinaries (ASX: XSO) – coincidentally – notched up an equally-sized gain.

Gold miner Resolute Mining (ASX: RSG) led the gains with a 7.14% increase, followed closely by Chalice Mining (ASX: CHN), up 6.55%; and Gold Road Resources (ASX: GOR), up 5.74%

A good day to be digging things out of the dirt then, provided you weren’t one of those smaller iron players I mentioned earlier.

Uncertainty is returning to markets as current valuations reach the upper historical threshold for trailing returns. While the Federal Reserve chair Jerome Powell eased investors’ inflation fears, financial experts are yet divided on where the markets are headed and what’s the best approach for investors in the coming years.

We have a session on Friday 17th September at 11am (AEST) to talk about the current driving forces in the market and an investment that can benefit investors despite growing market uncertainty. Click here to book in.


General Advice Warning

Any advice provided by Reach Markets including on its website and by its representatives is general advice only and does not consider your objectives, financial situation or needs, and you should consider whether it is appropriate for you. This might mean that you need to seek personal advice from a representative authorised to provide personal advice. If you are thinking about acquiring a financial product, you should consider our Financial Services Guide (FSG) including the Privacy Statement and any relevant Product Disclosure Statement or Prospectus (if one is available) to understand the features, risks and returns associated with the investment.

Please click here to read our full warning.

Leave a comment