Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
June shakeup for most-traded ASX stocks; tech boom driving US gains
June trading showed some movement among the most popular stocks for Australian investors, as tech outperformance drove optimism and healthcare stocks sustained a recent surge, even as a recent pharmaceutical darling ended its three-month run atop one platform’s most-traded list.
Commonwealth Bank of Australia (CBA) led Australian stocks in June trading among on Selfwealth, while CSL, “once a stalwart at the top of the list”, fell to fifth place. Tesla, Apple and Nvidia continued their domination of US trading.
Neuren Pharmaceuticals (NEU), which had led ASX stocks in trading since March the back of the US Food and Drug Administration’s approval of its world-first treatment for a neurodevelopmental disorder, fell to second position in June. BHP, Westpac and CSL filled out the top five.
According to Robert Marfell, brand and content lead at Selfwealth, CBA taking the top-traded spot from Neuren has more to do with dynamics in healthcare stocks than with banking. “Neuren had a stellar run on the back of the FDA’s approval of Daybue, and June was its first sustained drop,” he tells The Inside Investor.
The June trading picture reflects strong investor demand for growth stocks that are not exposed to the economy, according to Wilson Asset Management investor dealer Will Thompson, who says the launch of Daybue will keep Neuren in the spotlight.
“We will hear more from Neuren’s partner Arcadia in early August where they will announce first revenue results and the number of Dayblue drug users,” he says. “The weakness in the stock over the past month could potentially be a buying opportunity; however, Arcadia’s management has been talking down market expectations during the launch phase – CY24 is where we will see most growth.”
Anna Milne (pictured), senior investment analyst at Wilson Asset Management, says the increased focus on ASX banking names stems from their strong performance in June.
“The debate around the banks currently is whether competition in both the mortgage and deposit markets have passed their peak, and so whether then banks will see the benefit of any future cash rate hikes through their net interest margins,” Milne tells The Inside Investor, adding that the arrival of the bulk of the fixed-rate mortgage cliff is adding to banks’ delinquency risk.
Mining and resources companies were also prominent in June trading, with BHP a major target as the iron ore price rose 15 per cent over the month and Pilbara Minerals (PLS) ranking high on most trading platforms.
Mining companies/commodities are also a big part of the ASX, led by BHP (which has the highest weight in the ASX 200) and Rio [Tinto], and so all things equal, it’s no surprise that BHP is among the most traded stocks,” says Morningstar analyst Jon Mills.
“Iron ore prices recovered in June on expectations of more stimulus in China, which is likely another main driver of high trading in BHP given iron ore is the main driver of BHP’s earnings,” he adds. “The lithium market is currently in deficit and Pilbara Minerals is likely to be a company that benefits if lithium prices remain elevated.
Vanguard ETFs dominate
The leading exchange-traded funds (ETFs) among Selfwealth investors were Vanguard offerings – its Australian Shares Index ETF (VAS), MSCI Index International Shares ETF (VGS) and Diversified High Growth Index ETF (VDHG) – followed by BlackRock’s iShares S&P 500 ETF and the BetaShares Australia 200 ETF.
Chris Brycki, founder and CEO of Stockspot, tells The Inside Investor it’s “no accident” that the Vanguard Australian Shares Index ETF remains the most popular ETF in Australia.
“It has a great structure, is highly liquid and it recently reduced its management fee from 0.1 per cent to 0.07 per cent,” he says. “VAS has also proven popular with our SMSF investors who want a simple ETF that covers the entire Australian market, which helps take the hassle out of growing and protecting their retirement savings.”
Tech drives US trading
Tesla again led US shares in trading on Selfwealth, while Apple rose to second position in June from sixth the previous month, setting a new share price record as investors bought into price momentum.
“More than seven out of every 10 trades in AAPL were buy orders, and total trades grew more than 50 per cent month-over-month as investors clearly favoured the momentum of the iconic iPhone manufacturer,” Selfwealth said.
Not all tech companies were sharing in the surge, though, with Meta Platforms trending down. “Down in ninth position, just 35.1 per cent of all trades in the parent company of Facebook and Instagram were buy orders,” Selfwealth said.
The artificial intelligence (AI) thematic also remained strong in June. “Semiconductor stocks like Nvidia were a popular trade in June, ranking third, while Microsoft and Palantir, among others, also drew widespread interest from investors and traders alike,” Selfwealth said.
