While much ado is made of the science that goes into fund manager research, real assessment puts comparable weight on the art as well according to investment leaders.
While financials and materials dominated trades leading into 2024, the popularity of other sectors like healthcare and information technology followed generational, and even demographic, lines.
Energy and gold lift following Middle East conflict
The S&P/ASX 200 finished up 0.2 percent on Monday, driven by energy and gold. This surge in energy and gold stocks was catalysed by a 4 percent rise in oil prices across the Asian region following a series of violent incursions by Hamas into Israel over the weekend. In response to this geopolitical turmoil, investors sought refuge in gold, thus boosting the demand for this precious metal. Furthermore, a positive performance on Wall Street further bolstered the local Australian stock market, despite the release of better-than-expected US employment figures. Notably, West Texas Intermediate crude oil was trading at over $US86 per barrel on Monday. Key energy companies such as Woodside Energy, Santos, and Ampol posted gains of 3.1 percent, 4.2 percent, and 1.9 percent, respectively. Gold stocks also exhibited positive momentum, with Capricorn Metals, Newcrest, and Regis increasing by 5.4 percent, 4.7 percent, and 5 percent. Conversely, major iron ore mining companies saw a moderation in their earlier gains, in tandem with a decline in iron ore prices. BHP Group managed a slight increase of 0.1 percent, while Fortescue experienced a 1.9 percent decrease, ending the day at $20.67.
Magellan Financial (MFG) plummets.
Magellan Financial Group experienced a significant decline of 7.2 percent, closing at $6.66, making it one of the poorest performers on the ASX 200. This decline followed a previous drop in funds under management recorded by the money management firm. When assessed over a longer period, Magellan Financial fell 24 percent year to date, 35 percent over 12 months, and 72 percent over 5 years. Myer shares also witnessed a decrease of 3.9 percent, closing at 49.5¢. This decrease came in the wake of an announcement by the department store concerning the retirement of chairwoman JoAnne Stephenson after seven years of service on the board. Ari Mervis is set to assume the role following the annual general meeting. Finally, ASX Limited posted a slight decline of 0.3 percent, closing at $56.84. This decrease coincided with the release of a report by the Reserve Bank of Australia on the same day, which downgraded its assessment of the stock exchange’s management of its clearing and settlement system concerning its financial stability standards.
US markets advance modestly, bolstered by energy, USD, and aerospace/defensive names.
The Dow Jones and S&P 500 both lifted 0.6 percent, while the Nasdaq ended higher 0.4%. The escalation of the conflict between Hamas and Israel raised concerns about a broader conflict, resulting in higher crude oil prices and prompting increased demand for safe-haven assets such as gold, the U.S. dollar, and US Aerospace/defensive stocks. Lockheed Martin Corp (aerospace, arms, defence, information security) and General Dynamics Corp (aerospace and defence) both lifted 9 percent, while Northrop Grumman Corp (aerospace, defence, technology) lifted 11 percent following the Middle East conflict. The US Energy Sector also finished higher up 3.8 percent for the day, with Marathon Oil Corp up 6.6 percent and Exxon Mobil Core up 3.5 percent. Meanwhile, in response to the heightened tensions, the iShares MSCI Israel ETF, which tracks a market cap-weighted index of Israeli companies, experienced a significant decline of 7.1 percent. The VanEck Israel ETF also decreased by 5.7 percent, while the BlueStar Israel Technology ETF fell by 2.7 percent.
