Month: November 2015
How are Apple, Amazon and Google looking in the US?Good morning everyone and hope you all had a great weekendOverviewThe financial press keeps referring to the rally in US stocks as not being broad based and led by just a select few stocks; hence, we thought it was time to look closely at the largest 4 household names in the NASDAQ leading the way.The IT / Technology-based NASDAQ has been a very impressive US index over recent years rallying over 350% since the GFC, compared to 68% for the ASX200 – see chart 5. It is close to breaking its all-time high set in 2000 with, on the short-term basis, another 6-7% upside targeting the 5000 area.Turning to the MarketLet’s look at the NASDAQ and its 4 largest stocks for any clues to where this rally may rest / fail:1 Apple $119.30
- A quiet session was experienced today in the ASX 200, finishing the day only 20 points higher to 5,276, with a trading range of 41 points.
- As expected, the majors of the Materials sector were weak – BHP closed 2.1% lower to $20.07 and RIO down 1% to $48.13. Fortescue Metals (FMG) however, was the strongest link and rallied 4.3% higher to $2.18.
- In the Consumer Staples sector, Woolworths (WOW) jumped from its barrier by 3.8% to $24.63, after reports of a conglomerate of private equity players are considering to make a bid for its Big W division. Wesfarmers (WES) also finished up slightly 1% to $39.42 and Bellamy’s Australia (BAL) closing up 5.5% to $10.55
- In the Energy sector, Santos (STO) disappointed, and closed 3.8% lower to $4.00 as investors are concerned with possible dilution after the rights issue is completed.
- The banking sector was up slightly today NAB closed up 0.9% to $30.22 ,CBA up 0.7% to $80.4, ANZ closed up 0.4% to $27.85 and Westpac (WBC) closed up 3c to $31.89
- The health care sector was also slightly up today with Resmed (RMD) up 1.2% to $8.16 and Ramsay HealthCare (RHC) up 0.9% to $67.94
Best Sector – Consumer Staples
Worst Sector – Materials
The ASX200 is roaring into Christmas but remember our 2016 forecast! Welcome to what looks set to be a scorcher of a Friday here in Sydney! This is a short report today because, overall, it appears to be time to sit back and enjoy the ride. Overview The ASX200 has experienced a stunning week so far rallying 264 points (5.3%) to close at 5242 yesterday – see chart 1. The statistics Market Matters has been quoting almost daily over the last week or so look to have worked perfectly, i.e. the average correction in November over the last 5 years is 7.1% and in 2015 it has been 7.5% (to-date). We are now entering the extremely strong seasonal period for equities which usually lasts until late December / early January. In mid-December, 3 of the big 4 banks pay their chunky dividends which is usually a positive for equities as some of this money is likely to find its way back into the market. The local market looks likely to test the 5400 resistance BUT if the Christmas cheer really kicks in, the 5700 area would not surprise. Market Matters remains confident with its long-standing prediction that the S&P500 will reach all-time highs in the 2200-2300 region in the coming months – see chart 2. Importantly now with the market 324 points (6.6%) above recent lows the risk reward for equities is clearly not as attractive as previously even though markets are technically bullish. Hopefully subscribers have followed Market Matters’ general market alerts over recent months and are already fully / mostly invested in the market. Turning to the Market So let’s explore the question “Would you be a seller / buyer now”? Importantly, technical sell areas are approaching for some of Market Matters’ portfolio; initial target areas are highlighted below: 1. Ansell (ANN) $21.93 – Initial target $23 and then $25.
- After an explosive move in the ASX 200 yesterday, it wasn’t expected to see consolidation today, with the broader market ending only 13 points higher to 5,256.
- The Financials continued to provide alpha, with Macquarie Group ending 0.6% higher to $83.00, while Commonwealth Bank (CBA) closed 0.9% higher to $79.83.
- In the materials front, Rio Tinto (RIO) had a volatile session, trading as high as $49.90 this morning, only to reverse and end 0.1% lower to $48.61, while Fortescue Metals (FMG) was the weakest link and closed 3.7% lower to $2.09.
- In the consumer staples sector, Wesfarmers (WES) outperformed, up 0.8 to $39.01.
- Slaters & Gordon (SGH) slumped 12.1% lower to $2.68 after presenting to its shareholders its results of meeting and adjusts its profit figures.
Best Sector – IT
Worst Sector – Energy
Looking outside of the supposed “Blue Chips” for value
- An explosive day in the ASX 200 today, rallying to close 109 points higher to 5,242 after November Index options expiry this morning.
- The Iron Ore names returned back to the hot seat, favourite. Rio Tinto (RIO) was the strongest link, rallying 4% higher to $48.68, despite Iron Ore down 2.8% in Asia and BHP had a strong day also up 3% to $20.42.
- In the Mergers & Acquisitions (M&A) area, OZ Forex (OFX) ascended 30% higher to $3.38 after Western Union provided an indicative proposal worth between $3.50-$3.70.
- NAB was the better bank of the big 4, up 3.2% to $29.72, while CBA ended 1.7% higher at $79.14.
Best Sector – Consumer Staples
Worst Sector – Utilities
The ASX200 soars! Is it time for the Christmas rally? Good morning everyone Overview The ASX200 surged 114 points (2.29%) yesterday, it’s last rally over 100 points a day was in September BUT it’s certainly a long time since the market felt so bullish. The local index is dominated by the banks and they rallied almost 2.5% guaranteeing a strong day, especially with the energy sector gaining 4.6%. Two sectors that have had a shocking year (banks -8.3% and energy -33.6%) rallying for one day does not make a summer but it does make a pleasant change! Let’s just stand back and consider the facts and then were look at some stocks that have struggled in the Market Matters portfolio.Market Matters offer these insights for free on a regular basis – sign up hereTurning to the Markets 1. The average ASX200 pullback in November for the last 5 years is 7.1% followed by a strong rally into January, this year we have corrected 7.5% and then exploded 114 points in one day – see chart 1.
- A soft start was experienced in the ASX200 this morning, trading as low as 5082, only to rally and recover from midday to end the day 15 points higher to 5133.
- The rally continued to stem from the financials, with the big four banks adding ~11 points to the broader market. Commonwealth Bank (CBA) closed 1% higher TO $77.84, UP 4.1% for the past 2 days.
- With Iron Ore slumping overnight, it was no surprise to see this flow through to its related stocks today. BHP Billiton (BHP) closed 2.8% lower to $19.81, RIO down 2.7% to $46.80 and Fortescue Metals (FMG) down 3.2% to $2.15.
- Explosives Company, Orica (ORI) rallied 2.3% higher to $15.97, after investors embraced its full year results.
Best Sector – Financials
Worst Sector – Materials
Equity market rebound solidly after the Paris terrorist attacks
- The market today looked a lot better after a better night from overseas markets. After a shaky start, the ASX 200 rallied hard on the open only to drop back after about 15 minutes. It wasn’t until approximately 11.00am that it started to kick higher, then finally rallying hard into the last hour. The market closed up 90 points (+1.8%) to 5,094.
- QBE Insurance Group (QBE) shares suffered a setback (again) after the insurer advised the market that margins would come in at the bottom end of expectations. Expectations were that an 8.5 to 10% profit margin would be achieved. The stock closed down 2.1% to $12.89 after being down over 3% to $12.42.
- QANTAS (QAN) had some better news with Standard & Poor’s upgrading its credit rating one notch to BBB- citing an improved balance sheet. The shares rallied to a high of $3.74 and closed at $3.72 up 17c (+4.8%).
- BHP Billiton (BHP) also had a better day, but it was far from convincing. Being headline news in the financial papers over the last few days is still an obvious weight around the company’s neck. The shares closed up 15c to close at $20.25. RIO Tinto was also quiet, closing up 51c to $47.92.
- The energy sector followed the lead from overseas and performed the strongest with Origin Energy (ORG) excelling, up 6.8% to $5.25. Santos (STO) performed well, up 4.6% to $4.32, however, Woodside Petroleum (WPL) lagged behind, after being down on the day at one stage, but closed up 1.7% to $29.37.
Best Sector – Energy
Worst Sector – I T
Really bullish, there's more to go in the reflation rally
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