ASX Weekly Market Outlook and the Top Movers Last Week

Last week the All Ordinaries [ASX:XAO] shed 69.9 points for the week.

After a period of moving sideways the All Ords looks to be falling away, as we move into September and the looming changes in government support and mortgage payment freezes get ever closer.

XAO weekly wrap up

Source: Optuma

ASX outlook for the week ahead

The week coming for the All Ords could be another move lower. As we are now past earnings reporting season — which wasn’t very impressive.

A lot of people are still out of work and although Melbourne eased restrictions ever so slightly, there is a long road ahead. Sadly, right now there isn’t a lot of positive news out there to keep the market moving up.

Historically the level of 6,000 has proven to be very strong over the years — if the price falls through and stays under this level this coming week, it may be a signal of a weakening market.

XAO weekly wrap up, week ahead

Source: Optuma

With the XAO falling away last week the trend could continue, with the economic circumstances around the country looking shaky it could be harder for the market to rebound.

Lockdown is both painful and expensive.

Looking at the stocks, there were few winners last week. With Lendlease Group [ASX:LLC] gaining 4.56%, along with Chorus Ltd [ASX:CNU] also up 7.35%.

Falling back was JB Hi-Fi Ltd [ASX:JBH], declining 5.89% — which had been a standout performer through the pandemic.

Along with Iress Ltd [ASX:IRE] and Challenger Ltd [ASX:CGF] falling 3.52% and 6.06% respectively.

Looking into the sectors, there were plenty in the red. Energy fell away 5.64%, along with Information Technology and Consumer Staples falling away 3.61% and 2.03% respectively.

A broader outlook for the ASX

It’s looking like crunch time is coming up and coming fast. At the start of the pandemic both the government and banks stepped in to provide financial aid to the public.

With the banks providing freezes on mortgage payments and small business loans to ease the burden, now the end of that time is closing in fast.

Now it’s time to pay the piper.

With the boss of the Australian Banking Association calling it the ‘largest ever customer contact process in the industry’s history.’

I feel it’s safe to assume that the people in these positions would be well aware of what’s coming.

Household savings higher than usual means ‘dreamboat’ stocks like Afterpay Ltd [ASX:APT] may really come off the boil.

In market terms — for every boom there is a bust and vice versa.

Passive investments such as ETFs might not be the way forward as we edge down.

Regards,

Carl Wittkopp,
For Money Morning

PS: Four Well-Positioned Small-Cap Stocks: These innovative Aussie companies are well placed to capitalise on post-lockdown megatrends. Click here to learn more.


Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

Leave a Reply

Your email address will not be published. Required fields are marked *

Money Morning Australia