The ASX200 eked out modest gains on Thursday despite negative leads from Wall Street when inflation figures shocked markets that were already pricing in the highest inflation print since the early 1980s. With an annualised inflation figure of 9.1%, US investors are now considering the prospect of an interest rate increase of 100 bps from the Federal Reserve at its next meeting. In Australia, unemployment dropped to a record low of 3.5%, with a super tight labour market suggesting we will also see higher rates sooner than expected.

As with the ASX as a whole, trading volumes on nabtrade are subdued. For investors, there isn’t much to get excited about – cheap stocks appear to be cheap for a reason, and few stocks are at the kind of highs that would justify taking profits. Traders continue to trade the big favourites, Fortescue Metals Group (FMG) and BHP (BHP), whose share prices are strongly correlated with the iron ore price, providing some opportunity to snaffle small gains on a regular basis.

Fortescue Metals Group (FMG) shares over twelve months

While well off their highs, neither company has reached last year’s lows, so longer-term holders are often hanging onto substantial gains but are loath to sell at current prices. Interestingly, Rio Tinto (RIO), which is generally a far less popular stock, has rejoined the top five trades, although trading is relatively mixed. The stock was a strong buy on Wednesday at under $95, which appears to be the magic number.

Financials always find investors and traders, but sideways movement in the big four is failing to pique a great deal of interest. ANZ (ANZ) is the least favoured of the banks, but a 2% fall on Thursday and general ongoing weakness in the stock brought out the buyers. The ANZ share price is down 21% over 12 months and 24% over five years, but investors still enjoy receiving their dividends while hoping for a turnaround in the bank’s fortunes.

ANZ share (ANZ) over 12 months

One long-held favourite is CSL (CSL), which has stabilised after falling below $250 several times since the Covid crash, although it remains well off its highs of about $340. It has recently crept back above $290 and many are taking profits. Woodside Energy (WDS) has taken the opposite direction for investors; many were taking profits during its recent run of strength on the back of the soaring oil price, and have since returned to buying as the price has fallen.

Woodside Energy shares (WDS) over 12 months

On international markets, investors are playing it safe, with the exception of small buys in perennial favourite Tesla (TSLA.US). The big names are dominating the buys, with Apple (APPL.US), Amazon (AMZN.US) and Microsoft (MSFT.US) at the top of the list.