Tag: All Ordinaries Dividend Yield

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ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator fell to 56%, from 66% last week, indicating a mild bear market. Three of four Australian indicators signal a risk-on stance, while one of our two Chinese indicators has fallen to a risk-off signal. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator has eased to 56%, signaling a mild bear market.

ASX Bull-Bear Market Indicator

The OECD Composite Leading Indicator for China declined to 98.96, below the 99.0 threshold, signaling risk-off.

OECD Composite Leading Indicator for China

Stock Pricing

ASX stock pricing jumped to 83.24 percent from 80.82 percent last week, still roughly mid-range between the August high of 92.23 percent and the April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

The All Ordinaries Dividend Yield is at a low 3.17% compared to its 45-year average of 4.09%, indicating that stocks are highly-priced.

All Ordinaries Dividend Yield

Conclusion

The ASX bull-bear indicator declined to 56%, signaling a mild bear market on signs that the Chinese economy is slowing. Stock market pricing remains extreme, indicating increased risk of a significant drawdown.

Acknowledgments

Posted on

ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when the market valuation is high, but advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 66%, up from 56% four weeks ago. Three of four indicators from Australia and two from China indicate a risk-on stance, with a combined 60% weighting, while the US Bull/Bear indicator, which makes up the balance, is at 40% risk-on.

ASX Bull-Bear Market Indicator

Australian building approvals for private dwellings remain above their long-term moving average, with the 3-month moving average at 15,600 in October.

Australia: Private Dwelling Approvals

China’s NBS Manufacturing PMI increased to 49.2 in November, also above the 49.0 threshold for a risk-off warning.

China: NBS Manufacturing PMI

Stock Pricing

ASX stock pricing declined to 80.24 percent, compared with the August high of 92.23 percent and the April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher that stock market pricing is relative to its historical mean, the greater the risk of a sharp drawdown.

The All Ordinaries dividend yield is at a low 3.18%, just above the 3.0% level typical of an overpriced market.

All Ordinaries Dividend Yield

Conclusion

The ASX bull-bear indicator remains in a mild bull market, with China’s NBS Manufacturing PMI holding above its signal line. Valuation is declining after reaching a new extreme, but the risk of a significant drawdown remains high.

Acknowledgments

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Forward Orders Lift ASX to Mild Bull Signal

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates bull or bear market status, while the gauge on the right reflects stock market valuation. Stock market pricing indicates whether stocks are cheap or expensive relative to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because the market valuation is high, but we would advise investors to be circumspect about adding new positions without careful investigation of the underlying value.

Bull/Bear Market

The ASX Bull-Bear Market indicator jumped to 66%, compared to 56% last week, with NAB forward orders crossing to a risk-on signal.

ASX Bull-Bear Market Indicator

Five of six indicators from Australia and China now indicate risk-on, while the ASX 200 relative to Gold (in AUD) remains risk-off. The index includes a 40% weighting for the US Bull/Bear indicator, which is unchanged.

NAB forward orders for Australia increased to 1.0 in August from 0 in the preceding two months, lifting the 3-month moving average above zero and signaling risk-on for the first time since October 2023.

Australia: NAB Forward Orders & 3-Month MA

Stock Pricing

ASX stock pricing increased to 91.37 percent, compared to a high of 92.23 percent four weeks ago and a low of 67.85 percent in April.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its history, with the result expressed in standard deviations from the mean. We then calculate an average for the five readings and convert that to a percentile. The higher that stock market pricing is relative to its historical mean, the greater the risk of a sharp drawdown.

The All Ordinaries dividend yield fell to 3.12%, a level typical of recessions like 1987 and 2020, when falling earnings force dividend cuts. Dividends are reasonably healthy at present, suggesting that valuations are extreme.

All Ordinaries Dividend Yield

Conclusion

The ASX bull-bear indicator has lifted to 66%, signaling a mild bull market. However, extreme valuations increase the long-term risk of a significant drawdown.

Acknowledgments

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