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Omicron has dominated the headlines – how have nabtraders responded?

The emergence of a new and potentially more infectious Covid variant, now named Omicron, has rattled markets this week, with a heavy sell off on Wall St into the Thanksgiving long weekend setting the ASX up for falls on Monday. Despite the weak lead, the Australian sharemarket held up surprisingly well, but has given up 2.5% over 5 days as investors process the threat of the new variant and Fed Chair Jerome Powell’s ominous request that the term ‘transitory’ be dropped when discussing inflationary pressures. The ASX200 is down just over 1% over a month, and 3.5% over three months, continuing a broadly sideways trend.

For investors, Westpac (WBC) continues to offer either a buying opportunity or a cautionary tale, depending on your perspective. The WBC share price is now down 14% over the month, and trades close to its 52 week lows, with the announcement of $113million in penalties agreed with ASIC for, among things, charging fees to deceased customers not helping the share price. Nabtrade investors have been enthusiastic buyers, adding to their holdings in large quantities. Nab (NAB) has been trimmed, as its share price hovers above $27; NAB shares are up nearly 20% year on year despite falling 10% in recent weeks. Trading in Commonwealth Bank (CBA) has been mixed as investors come to terms with its changing fortunes; CBA is more than 10% off its highs, but is also up nearly 20% over one year. ANZ (ANZ) is currently a buy, but remains the least popular trade of the big four. 

In other financials, AMP Limited (AMP) fell nearly 4% on Thursday, closing at $0.94. There was no news driving the fall; it would appear investors who’d cheered the strategy update earlier in the week lost their enthusiasm. Nabtrade investors were keen sellers at $1.07 on Wednesday, and buyers on Thursday at around the closing price. AMP shares are down 45% over twelve months and more than 75% over 10 years. 

 

AMP Limited shares

Source: nabtrade

 

With the iron ore price jumping back above $US100 a tonne, it will come as no surprise that Fortescue Metals Group (FMG) has returned to the top of the table as Nabtrade’s most traded stock. Larger sells have been offset by smaller buys, with trading mixed overall, however average trade sizes remain extremely high. BHP (BHP) has bounced off recent lows and is up nearly 10% over the last month, leading to elevated trading levels; overall trading is mixed. Rio Tinto (RIO) has also had a strong month, and was a strong buy on Thursday when it came off a little. 

The buy now pay later sector, a former favourite, has fallen somewhat out of favour now Afterpay (APT) is under offer from US giant Square (SQ.US), however there is still action that will attract the attention of close watchers. The APT price fell 6% on Thursday as the shareholder vote to approve the deal was delayed until the new year as both companies await from the Bank of Spain. The fall saw enthusiastic buying from nabtrade investors. At $100, the Afterpay share price is up less than 2% over twelve months, and is down nearly 40% from its high of $160. Zip (Z1P) shares were also in on the action, falling over 3% on Thursday and at $4.89 are down 19% over twelve months. Z1p was also a buy.

On international markets, Apple (APPL.US) returned to the top of the ‘most traded’ charts after trailing Tesla (TSLA.US) over the last two years, albeit as a strong sell. Apple comprises nearly 12% of the Nasdaq Composite Index, and is up nearly 35% over 12 months, while the index is up 23%. Investors have become increasingly aware that the top 10 stocks in the major US indices are hiding significant underperformance in smaller weighted stocks. The Nasdaq currently has strong bearish momentum as investors have been actively selling (source: nabtrade).

 

Nasdaq Composite Index (COMP)

Source: nabtrade

 

 

Analysis as at 2 December 2021. This information has been provided by WealthHub Securities Ltd the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 (NAB). Whilst all reasonable care has been taken by WealthHub Securities in reviewing this material, this content does not represent the view or opinions of WealthHub Securities. Any statements as to past performance do not represent future performance. Any advice contained in the Information has been prepared by WealthHub Securities without taking into account your objectives, financial situation or needs. Before acting on any such advice, we recommend that you consider whether it is appropriate for your circumstances. This article does not reflect the views of WealthHub Securities Limited.

About the author
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Gemma Dale , nabtrade

Gemma Dale is Director of SMSF and Investor Behaviour at nabtrade. She is the host of the Your Wealth podcast, a fortnightly podcast for investors, featuring insights and updates from markets and finance experts across a range of topics. She provides regular market and finance commentary on ausbiz and in other media including AFR, the Australian, ABC and commercial tv and radio. Gemma was previously the Head of SMSF Solutions for nab, and the Head of Technical Services for MLC, where she led a team of specialists providing advice to advisers and their clients on SMSF, super, tax, social security and aged care.

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Gemma Dale

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