The Trump slump and the bank levy bashing has taken around $50 billion off shares in the local setting this month, so the big question is, how do you play this new phase of the market?
My colleague Paul Rickard’s work has shown that April brought a comeback of the mid-cap stocks but small-cap stocks will be still struggling. Big-cap stocks have not lost their popularity, but their momentum going higher is slowing down. And since the bank levy, the banks will be a big drag on the top 20 index.
Fairfax’s Clancy Yeates has done the numbers on the banks’ fall from grace. “From its 2017 peak on May 1, the ASX 200 banks index has fallen 9.9%, and shares in ANZ Bank, Westpac and National Australia Bank have each fallen 10% or more, known as a ‘correction’ in financial market jargon. CBA is down 8.5% from its May high.”