Market Update 3/5/24 – Let’s have a quick look back at April and some things catching my eye today.
Source:Â https://stocksunderthehood.com/free-resources/xjo-seasonality/
April was a tough month for our market . It’s actually the worst April on this table going back to 2000. All this talk of selling after Easter and “sell in May and go away” might have some investors jumping out a bit earlier than usual.
In all seriousness though, the biggest story in town is Inflation and hence bond yields. From October to January the bond market was telling us that it thought inflation had peaked and so had interest rate hikes by the US Federal Reserve. Since then, data has repeatedly shown that the last 1-2% fall in inflation needed to see the Fed actually start reducing interest rates is going to take longer than first thought. For now US 10 year bond yields remain in a well-defined up trend and this is bad for stocks.
One useful feature of Bitcoin is to use it as a barometer for risk assets. While the Bond market started to signal trouble at the start of the year, Bitcoin continued to rise until early March. Reality has since set in.
Our next barometer for risk appetite is the NASDAQ. It peaked in late March. Currently it is being torn between some great big tech earnings results and the reality that interest rates won’t be reduced any time soon in the US.
Then we have our own market. This peaked on April 1. Incidentally, so did the S&P500 in the US. Short-term trends are down, long-term trends remain in place for now.
Source: https://stocksunderthehood.com/free-resources/gold-seasonality/
The gold price keeps on keeping on. Like our stock market, it usually experiences some weakness in May and June. Look at the performance of gold in the total column! There’s the argument that every portfolio should have some gold. It’s even a pretty strong argument that perhaps it’s all you need!
At a quick glance, it was a strong night for NASDAQ stocks. Apple is up a further 6% in the post market. Clearly their results have please the market.
This shouldn’t be a surprise. They have remained quite pessimistic for 18 months or more. What is surprising is that the shares remain as elevated as they are. Such a loved company.
Would be fascinating to know that the price of Afterpay would be today. ZIP Co (ASX:ZIP) seems to have finally hit a point where they can actually make some money but they’re not getting anywhere near the top-line growth that Afterpay is. It’s sad we don’t have the option to trade this company (and many more and plenty more to come) on our market anymore. Sure we have Square (owners of Afterpay) on our market but that’s another business that is more complex to understand than just Afterpay.
This acquisition was already announced to the market, this just finalises the deal. Telix (ASX:TLX) continues to expand both vertically and horizontally. Their latest update showed that they are increasing revenues and maintaining profitability while doing so.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Market Update 3/5/24