The bull rally is charging across the globe, spearheaded by Nasdaq which is up almost 19% since 5 months ago obviously due to FAAANG stocks (Apple alone is up 45%). The combined market cap of Apple + Microsoft has for example exceeded that of the entire German (DAX) market!
But while global markets have been on the tear, including johnny come lately Hang Seng, our local market sadly is in despair. ASX 200 is up just 3.8% over the same time frame. and that's the indices of the blue chips, the small caps have fared worst. Even on the gold stocks front, our XGD is still down 16% while HUI is up 6%.
The local economy is likely to fall victim to our ongoing bushfire crisis which is likely to strip up to 0.5% off our GDP. Even an RBA cut rate which can provide short term reprieve is unlikely to help much in the long run. This makes it doubly harder to be enthused about investing in the ASX. We are (like the rest of the world) subjected to a potential near term (anywhere from months to 2 years) Big Kahuna event from the US , but in the meantime while the rest of the world is partying, we can only take comfort in a narrow range of selective stocks people flock to (e.g CSL). It is anything but inspiring I am afraid.
Even Aussie gold stocks (e.g EVN ) have been under pressure keeping their production up despite the better AUD gold prices that should be lifting stock prices. It is little wonder we have underperformed relative to our international peers.
What is lacking is consistency to thrive on a sustainable basis in this market. When I say consistency I expect (1) our local economy to be holding as well as the US (2) our ASX to keep pace with Wall St or at least Shanghai or Hang Seng (3) stock gains to be witnessed across most of all local stocks (4) consistency in trend -not a zig zag with volatility (5) ever constant flip flop between growth and value stocks (6) local gold stocks to be in tandem with international gold counterparts . And what do we have? None of the above!
