Month: December 2014
• The ASX 200 had a roller coaster of a day, ending 5 points lower at 5225, after touching its lows of 5204 in the morning, to hitting intraday highs of 5241 shortly after.• The weakness was mainly contributed by the iron ore sector, with Rio Tinto (RIO) down 2.5% at $53.67 and Fortescue Metals (FMG) down 2.0% at $2.42.• The oil sector had a solid day, with Woodside Petroleum (WPL) up 1.2% at $34.60 and Santos (STO) up 2.3% at $7.16.• The Banking sector was not able to hold above water, with ANZ down 0.7% at $31.00 and Westpac (WBC) down 0.6% at $32.05.• Please watch out for the Hickman Report tomorrow.
Yesterday, I touched on the current significant increase in volatility, especially in equity markets exposed to commodities. A characteristic of major turns, I believe this will be a top in the U.S. – even after last night’s drubbing the Dow is only 2.4% off all-time highs! The previous night, equities plunged in Europe on concerns around Greek elections and potential flow on effects, the Greek stock market fell 12.8%. Last night, all eyes returned to oil after OPEC reduced its estimates for 2015 demand, oil again plunged over 4% to 5 year lows, I am actually surprised this news created such a move, why else has oil fallen 43% in the last 7 months? We are in the “eye of the storm” of panic in this sector as OPEC, led by the Saudi’s, plays games with the market. People are now talking $US40-50 a barrel if OPEC does not remain united. One fact is catching my eye:
The ASX 200 recovered over 50 points from its lows to close only down 28 points (0.5%), not a bad effort with the Dow falling 268 points (1.5%).
I am buzzing this morning with so many ideas flying around in my head after only two espressos, that I thought the best report would be a snapshot of all my thoughts today. Please excuse the information overload, but all very relevant at present.
• The ASX 200 recovered most of its losses intraday, closing down 24 points, or -0.5% to 5259 after trading as low as 5222.• The banking sector ended mixed, with Commonwealth Bank (CBA) the only one of the ‘big 4’ up 33c at $82.35.• Regis Resources (RRL), a stock I currently hold, roared up 8.8% at $1.61. We remain bullish gold and its sector.• Woodside Petroleum (WPL) closed 1.5% higher at $34.90. As mentioned to subscribers live today, I went ‘long’ WPL via options.• As anticipated, Woolworths (WOW) and Wesfarmers (WES) ended -1.4% at $29.88 and -2.1% at $41.73 respectively, following Tesco, one of UK’s largest super market chain, downgrading their profit guidance overnight.
Oil Plunges BUT “insiders” start buying in the US
· Murray Enquiry Key Takeaways 8th December
The Murray Inquiry is delivered at interestingly difficult times
• The ASX 200 closed 0.7% higher at 5373, after months of speculation around the Murray Inquiry ended with yesterday’s release.• Few surprises were seen in the report hence the market resumed to “normal trading”. Without the potential capital raising overhang the “big 4” banks rallied e.g. National Australia Bank (NAB) ending up 1.8% at $32.97.• The “Aussie IT sector” had a good day led by Seek Ltd (SEK) up 2.7% at $17.70.• The retail sector started the week in the red, with Myer (MYR) continuing its recent decline, down 1.9% at $1.535 and JB Hi-Fi (JBH) down 2.0% at $15.59 – perhaps anticipation of consumers limiting their spending money towards Christmas.• Qantas (QAN) ended 13.8% higher today and up 24.5% for the month so far, after announcing a profit upgrade.
World governments are adopting stricter climate change policies with gaining momentum, which I believe will leave any assets with fringe profitability well and truly in the ground for decades to come. Scientists have said that we should hold temperature increases to 2 degrees celsius for the sake of our planet. This simply MUST start to increase the limits of Carbon Dioxide pollution. A global push to save the planet was typified with representatives from 190 countries, recently meeting in Lima to discuss climate rules. Do not underestimate the world, as a whole is now looking at our atmosphere – it’s not just the “greenies”. Even after the Fukushima disaster in Japan, the country is now planning to restart nuclear reactors next year in an effort to reduce carbon dioxide emissions. Recently, resource stocks have been hammered with collapsing oil and Iron ore prices, but the environment theme I believe, may be lurking in the background to land a knockout blow to the already battered share prices.
Really bullish, there's more to go in the reflation rally
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