Month: April 2015
**As we remember the fallen tomorrow, the Weekend Report will be released on Sunday.
The ASX 200 had a relatively quiet time following a strong lead from overseas markets. The index finished the day’s session 7.5 points higher (+0.13%) at 5845 after trading as high as 5849.
Thank you to those who attended last night’s Webinar and apologies if you had trouble logging in as our limits were exceeded due to an excess in demand. A recording is available here.
• The ASX 200 had descended, ending 35 points (-0.6%) lower to 5838, driven by the inflation data reported this morning – in line with expectations.• The banking sector underperformed as the December Bank Bills are now factoring a possibility of no interest rate cut at all for the year. Commonwealth Bank (CBA) closed 66c lower (-0.7%) at $91.12.• High yielding, defensive stocks, such as Telstra (TLS) closed 6c higher (+1%) to $6.25• Fortescue Metals (FMG) rallied 1.9% at $1.90.5 despite S&P lowering its credit rating due to Iron Ore downturn.
I look forward to answering lots of your questions during today’s Webinar!
• The ASX 200 had a choppy session, ending 39 points higher (+0.7%) at 5872 after trading as high as 5888.• The banking sector faded from its morning rally, despite comments from the RBA Minutes being no different from what most investors have expected – another rate cut this year is not off the agenda. • RIO Tinto (RIO) rallied 84c (+1.5%) to $55.50 even after surprising investors its quarterly numbers. – A 12% fall in iron ore exports! • The battered Copper-gold company, OZ Minerals (OZL) rallied 6.2% to $4.13 after pleasing investors with its updated strategy and quarterly report.• We look forward to hearing your questions in our webinar presentation at 4.30pm!
The majority of questions I am receiving, unsurprisingly, are around the depressed Iron Ore sector and in particular Fortescue Metals (FMG). Unfortunately, investors prefer to buy stocks that are falling as opposed to ones at highs, which has a negative correlation to performance. I know I have discussed this subject a number of times over recent weeks, but a few thoughts crossed my mind over the weekend that made me want to clarify exactly how I see this space at present.
• The ASX 200 followed its US and European counterparts, ending 45 points lower (-0.8%) at 5833 despite China signalling further stimulus with its economy yesterday.• Of the ‘Big 4 Banks’ ANZ outperformed, up 4c (+0.1%) at $35.68, while National Australia Bank (NAB) closed 39c lower (-1%) to $38.33.• Telstra (TLS) closed well and outperformed the broader market, up 4.5c (+0.7%) to $1.89.
Most people acknowledge that it’s the historically low interest rates, essentially almost free money which has powered the bull market in equities, especially since late 2011. The S&P500 has rallied over 95% since late 2011 as the US Fed cranked up Quantitative easing, the German DAX has rallied over 25% in the last four months as the European Central Bank (ECB) powers up its own enormous Quantitive Easing (QE) / stimulus – see charts 2&3.
• The ASX 200 drifted lower throughout the day, losing 70 points (-1.2%) to 5878, down 1.5% for the week. Today’s broad market selloff was due to investors taking $$$ off the table as the December bank bills indicates an anticipation of only one rate cut this year.• The ‘Big 4’ banks led the way back into the red sea. Commonwealth (CBA) shed $0.93 (-1%) to $91.98 while National Australia Bank (NAB) lost $0.63 (-1.6%) to $38.72.• The Resources sector was also a drag; Fortescue Metals (FMG) lost 4.4% to $1.87 after trading 1.3% higher at $1.98 earlier in the session.• Please watch out for the Hickman report tomorrow.
Really bullish, there's more to go in the reflation rally
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