March numbers in major markets with Zoe Wallis, Forsyth Barr

Time to take a look back at the March numbers in major markets.

I'm joined now by Zoe Wallace from Fourcythe Bar.

So if we take a look at this month,

probably it's won a lot of companies,

won't look past at this point.

But what are the numbers telling us?

Yeah, absolutely.

Obviously March was tough all around.

If you look at the NZX5D and we're talking about gross returns here,

we're down about 5.9%.

Now large caps managed to hold up a little bit better.

Small and mid caps had a pretty tough time,

seeing declines of kind of 8% and the small cap range sort of end of town.

It's probably worth noting, looking globally,

we did have a bit of a better result,

particularly in the US market,

considering that they did have that big rebound on the 31st.

So a nice way to finish the quarter from a global perspective,

you know, the US market was down around 5%.

But if you look at Aussie,

obviously it was a pretty tough month as well,

down around 8% there.

That bit of a relief rally still continuing,

as you can see overnight, a sea of green on screens,

largely apart from New Zealand yesterday.

I think if you look at the reasons behind that,

that's a bit of a reversal of the trends that we saw over March.

So if you look at some of the companies that did the best in March,

there's only really a handful that actually gained,

and for a till and a two milk were a couple of those

that had a relatively better March.

Those are some of the ones that got hit yesterday.

So a reversal on the risk on sentiment

that we saw over the last 24, 48 hours.

Sure, I mean, the companies you're talking about there,

though, they're engaged in commodities and one respect

and big infrastructure builds on the other.

Are there any strong reasons for why we're not seeing

the kind of interest in there?

I don't.

Yeah, look, I mean, when you look at infertile, for example,

we're really positive on the stock.

We think the long-term story's good.

You've seen some very positive forward guidance

come out of CDC data center piece on the infertile side.

So look, I think the infertile stories,

one of a defensive, long-term holding asset,

I think that it had done relatively well

in a more volatile risk of environment partly

because of that.

And I think you were just saying that perhaps

profit-taking or rotation coming through yesterday

in local markets, that might be the driver.

Yeah, you shared a chat with me earlier there

that sort of explained a little bit how we line up

and how the NZX actually had a pretty reasonable kind

of a March there.

I guess one might say almost kind of the tallest dwarf

in the room in some respects.

Even adjusting, perhaps, for currencies, although that's always

with making a note out of there, right?

The cross rate can cut your wins or your losses.

Yeah, absolutely.

And look, NZX has this reputation.

I think it came to the fore and March

of being a relatively defensive, relatively yield orientated

market, and you can see that playing out

in terms of market turns.

On the currency piece, it is worth noting, obviously,

that the NZ dollar declining so much over the March month

did provide a bit of an offset for those investments offshore.

So when you look at where that chart ended up,

the S&P 500 index on a NZ dollar return basis

was actually only down 0.5%.

Now, I've been hearing a lot of talk about, I

suppose, that 200-day rolling average on the S&P 500,

particularly, and where it's at.

I think it's down below after quite a tear for a while.

Talk us through that a wee bit.

Yeah, sure.

And look, the 200-day moving average is obviously

a technical indicator that a lot of people pay attention

through as kind of indicating momentum.

And when you think about what's been driving global markets

for the last few years, it really has

been that momentum trade, is that we've

been seeing continued gains drive models to go in.

And a lot of this is related to the fact

that you've got more algorithmic models

trading in markets these days as well.

So when the S&P went through that 200-moving day average

on the downside, that tends to trigger a lot of those more technically

orientated models, and does compound the downwards pressure

in some of those indices.

So that's been another driver of kind of the downwards pressure

on the S&P 500 in recent weeks.