The ASX 200 is already 4pc this year. Picture Gettty
ASX Large Caps: Expert warns ‘Don’t get carried away’ as ASX 200 pulls away to 4pc gain in 2023
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- The ASX has had a big first two weeks, rising by over 4%
- Investors are bullish as inflation looks to have peaked in the US and Europe
- Earnings season will be next test for the markets
The ASX 200 rose another 0.70% higher on Friday, extending its gain for 2023 to more than 4%.
It was one of the best starts to the year as local investors responded to easing inflation in both the US and Europe.
Overnight, Wall Street rose 1% following the release of CPI report which shows US inflation has cooled down for the sixth straight month in December.
The headline CPI index for December fell from 7.1% to 6.5% as energy prices tumbled.
There were similar news out of Europe where inflation expectations over the next 12 months eased for the first time since May 2022 – from 5.4% to 5%.
Callie Cox, investment analyst at eToro, says the inflation report shows the US economy is getting back into balance without seriously harming the job market.
“What we’re in now fits the definition of a soft landing, and it’s adding to the pile of evidence the Fed needs to let up on rate hikes and aggressive policy. The market could interpret this as a time to pile back into risk, though.”
Cox offered a few words of caution.
“On the whole, this report is good news.
“But investors need to be careful. Inflation still isn’t fully handled, and it’s easy for markets to get carried away. We may not see new highs until inflation is fully under control.”
The Aussie dollar rose to US69.5c after the CPI report as bond yields tumbled (bond prices higher) on anticipation of a less hawkish Fed.
All eyes will now turn to the US earnings season, where the first trickle of companies will report their earnings later tonight. Citi, JP Morgan and Bank of America will be the first off the rank.
Closer to home, China’s exports fell again in December as global demand continues to decline. In the data released today, Chinese exports in US dollar terms fell almost 10% in December compared to a year earlier
Back to the ASX where Energy, Discretionary, and Financial sectors led today’s rally.
Biggest large caps gainers were coal stock New Hope (ASX:NHC) and beef company Australian Agricultural (ASX:AAC).
Looking ahead to tonight’s session on Wall Street, the December US import and export prices are due, together with the University of Michigan’s initial national consumer sentiment reading for January.
In Europe, the UK and Germany will each provide GDP readings.
BIG CAP WINNERS
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| Security | Description | Last | % | Volume | MktCap |
| 360 | Life360 Inc. | 5.46 | 11.89 | 2,079,174 | $950,815,589 |
| BKL | Blackmores Limited | 80.34 | 5.02 | 36,005 | $1,487,810,786 |
| NHC | New Hope Corp | 6.215 | 4.98 | 4,021,538 | $5,223,035,304 |
| AAC | Australian Agricult. | 1.8625 | 4.93 | 323,931 | $1,069,910,976 |
| PWH | Pwr Holdings Limited | 11.89 | 4.30 | 170,049 | $1,144,335,876 |
| SEK | Seek Limited | 23.26 | 4.21 | 543,165 | $7,917,354,641 |
| DMP | Domino Pizza Enterpr | 71.555 | 4.11 | 199,423 | $6,123,093,018 |
| ALL | Aristocrat Leisure | 33.24 | 4.01 | 1,444,866 | $21,010,568,367 |
| JDO | Judo Cap Holdings | 1.51 | 3.78 | 1,135,299 | $1,608,531,414 |
Life360 Inc (ASX:36o) rose 11% after reporting its Q4 CY22 figures.
The company said it was accelerating towards profitability after its core Life360 subscription revenue growth exceeded 54% in the quarter, in line with guidance.
NextDC (ASX:NXT) rose 1% after announcing a new $400 million senior debt facility to fund its ongoing growth.
BIG CAP LOSERS
Swipe or scroll to reveal the full table. Click headings to sort.
| Security | Description | Last | % | Volume | MktCap |
| IMU | Imugene Limited | 0.16 | -5.88 | 7,936,277 | $1,091,691,670 |
| CXO | Core Lithium | 1.14 | -4.41 | 11,944,366 | $2,197,792,581 |
| INR | Ioneer Ltd | 0.46 | -4.17 | 3,571,852 | $1,007,202,368 |
| LKE | Lake Resources | 0.83 | -4.05 | 5,670,659 | $1,203,795,022 |
| PLS | Pilbara Min Ltd | 4.02 | -3.49 | 16,769,903 | $12,471,553,078 |
| SNZ | Summerset Grp | 8.35 | -3.24 | 776889 | $2,003,168,795 |
| ILU | Iluka Resources | 10.19 | -3.04 | 882,754 | $4,466,036,907 |
| VUL | Vulcan Energy | 6.92 | -2.67 | 235,411 | $1,019,824,990 |
| PSI | Psc Insurance Ltd | 4.93 | -2.57 | 185,407 | $1,791,961,586 |
| NAN | Nanosonics Limited | 4.47 | -2.40 | 163,536 | $1,383,295,202 |
| WPR | Waypoint REIT | 2.71 | -1.81 | 972,198 | $1,854,213,670 |
| ANN | Ansell Limited | 28.57 | -1.79 | 253,420 | $3,699,320,553 |
| LIC | Lifestyle Communit. | 19.77 | -1.64 | 78,565 | $2,101,357,133 |
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