Fright to Safety

Economy and Indices

The AU market has followed US markets down over the last week.

In times of high volatility like this the ‘safest’ places to be are in higher quality shares. Although many of these were still down significantly, just less than the speculative shares.

Leading Sectors This Month

Metals and Mining +0.6%
Health Care +0.6%

Bottom Sectors

Property -8.9%
Utilities -8.3%

Segments this Month

Emerging Companies are still the strongest group, although most of the relative gains this month all but evaporated in the last few days.

In the Flight to Quality/Safety the largest companies did the best job at holding their ground, or more accurately not losing as much ground.

Market Trends

Interestingly the Utilities companies dropped almost as much as property shares over the last few days – why?

It’s the reason we’ve been waiting for about two years: interest rates will eventually rise - and everyone know that – but now the US Fed look to move rates a little sooner, everyone is look for the exits at the same time.

Utilities and Property shares are often the most exposed to interest rate movements, and the last two days show exactly that.

For insights on how to use these trends and themes within a portfolio, watch The Portfolio Series here.

Market Leaders

Gold miners and a few others have avoided a lot of the falls. For discussion of these leaders see the latest episode of Talking Stock.

Podcasts:

I regularly interview industry exports on numerous topics available in the Podcast playlist here

For an analyst’s view on Wesfarmers (WES) watch the Torpedo Tuesday interview Hugh Dive;
Chart Analysis of the US markets, the AU markets and RIO see the webcast with Gary Glover.
Five Steps to organisation change with Dan Haesler