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Month: February 2016

Afternoon Report Monday 8th February 2016

by james Carter

  • The ASX 200 ended its day pretty much unchanged, rallying from its lows of 4,925 in the morning, to close at 4,975, with the miners providing most support.
  • RIO was the strongest of the big miners, rallying 2.2% higher at $42.53, whilst FMG lost 3.4% at $1.83 after rallying 9.5% higher last week.
  • The big 4 banks were the laggards today, ANZ continues to be the weakest link, ending its day down 1.5% lower at $23.73.
  • Newcrest Mining (NCM) rallied 3.7% higher at$15.52, continuing its strength of +16.2% this year.
  • Ansell (ANN) rallied 7.3% higher at $16.14 after reporting soft 1H numbers, although the damage was done last week when they downgraded earnings guidance. Commentary was more upbeat about 2H earnings hence the decent rally today.

Best Sector – Utilities
Worst Sector – IT

Morning Report Monday 8th February 2016

by james Carter

Good morning everyone Overview With over 55% of the S&P500 stocks down in excess of 20% (the classic definition of a “bear market definition”) it would be easy to conclude that the S&P Index itself (which has fallen 15.1%) is in the middle of a bear market correction. To Market Matters it still feels like we are in a simple correction to the 99% advance from the 1075 level in late 2011. Recently, the poor performing ‘quality’ stocks that have already endured a tough 6 months have, relatively speaking, been spared with the aggressive selling switching to the quality / leaders, especially in the NASDAQ. Last week demonstrated this trend perfectly with Amazon -14.5%, Facebook 7.2-%, Google -8.1%, and LinkedIn -45.2%; these are some of the stocks that have held the US market together in recent months. Notably, other quality sectors where investors are sitting on good profits and stocks trading on high P/E’s have also underperformed recently e.g. Healthcare. It should be noted these stocks trade on very lofty P/E’s valuations of 403x, 81x, 30x and 52x but Commonwealth Bank only trades on a conservative valuation of 14x!

Afternoon Report Friday 5th February 2016

by james Carter

  • It was with no surprise, investors took profits off the table today in a quiet market with next week looking to be quiet due as Chinese New Year is being celebrated from tomorrow.
  • The ASX 200 closed 4 points lower (-0.1%) at 4,976 with the banks underperforming against the miners.
  • The big 4 led the broader market’s weakness, with NAB being the weakest link, finishing the day down 1.5% at $26.46.
  • The Iron Ore names continue to be the shining star; BHP closed 4.9% higher at $16.20 while Fortescue Metals (FMG) ended up 4.7% at $1.895.
  • With market uncertainty seen in the US, the gold sector rallied today, Newcrest Mining (NCM) edged 4.6% higher at $14.96, technically trading on the upper band of current trading range.

* Watch out for the weekend report.

Morning Report Friday 5th February 2016

by james Carter

OverviewYesterday we witnessed some dramatic moves on the ASX200; in most cases these were in the opposite direction to 2015, eg: Ansell -20.6%, Macquarie -5%, Domino Pizza -5.9% but BHP +8.3%, RIO +8.9%, Fortescue +11.7% and the energy sector +7%.

Afternoon Report Thursday 4th February 2016

by james Carter

  • A strong bounce back today, with the ASX 200 up 103 points (+2.1%) at 4,980, with resource companies the main driver
  • This came on the back of some decent weakness in the US Dollar overnight (which is a positive for commodity prices), and a theme Market Matters has been anticipating for some time now
  • Iron Ore was limit up in Asia today, which supported our Iron Ore miners and we used the strength to take half profit on our Fortescue Metals (FMG) position which finished up 11.7% to $1.81.
  • Macquarie Group (MQG) lost 5% at $64.86 after disappointing investors with its operational briefing – although it traded more than $3 up from its intra-day low
  • The Oil names rallied as expected, OilSearch (OSH) closed 7.1% higher at $6.75, while diversified resources, BHP rallied 8.3% higher at $15.45 .

Best Sector – Materials
Worst Sector – Health Care

Morning Report Thursday 4th February 2016

by james Carter

Good morning everyoneOverviewLast night the $US plunged the most in 7 years after services data reignited concern over the health / strength of the US economy.As would be expected, commodities denominated in $US rallied strongly, perfectly illustrating their inverse correlation to the US currency. The recent multiyear bear market in commodities is not just about simple supply and demand; a significant correction in the $US will send commodity prices soaring.It should be remembered that the vast majority of economists, plus investment houses, are predicting the $US higher and commodities lower hence a countertrend move could be very dramatic.Market Matters “big call” for 2016 is a change in trend for the $US which will send commodities higher.

Afternoon Report Wednesday 3 February 2016

by james Carter

  • Another sell off in the market saw the ASX 200 finish virtually on its lows after another weak night across the boards. The ASX 200 finished down 116 (-2.3%) to 4,877.
  • The banks were extremely weak with Australia New Zealand Bank (ANZ) down 3% to $23.67, Commonwealth Bank (CBA) down 2.9% to $75.73 and Westpac (WBC) closed down similarly 2.9% to $29.43.
  • National Australia Bank (NAB) went ex the Clydesdale and Yorkshire Bank this morning which knocked about three percent off the share price, which together with the other banks sell off, took a toll on the stock with a drop of 5.5% to $26.36.
  • BHP Billiton (BHP) was sold off on the weakness in oil, however it managed to hold above its intra-day low of last week; $14.06. Today’s low was $14.17 but managed to close at $14.28, down 65c (-4.4%)
  • RIO Tinto (RIO) was a different picture today in that it continued to make new lows after a breakdown yesterday. The stock finished down 51c to $37.03; lows not seen since around February 2009.

Best Sector – Utilities
Worst Sector – Energy

Morning Report Wednesday 3 February 2016

by james Carter

Do people really believe BHP can maintain its dividend policy?

Afternoon Report Tuesday 2nd February 2016

by james Carter

  • A late session sell off saw the ASX close lower today, off 50 points to (-1%) at 4,993.
  • The RBA decision at 2.30pm seemed to be the catalyst – with the RBA keeping rates on hold as expected, however there were some in the market that were clearly positioning for a surprise cut on the back of Bank of Japan easing, and further volatility from Chinese economic data.
  • Only one of the big 4 banks ended in positive territory, with NAB $0.08 higher (+0.3%) at $27.91 while Westpac (WBC) was the weakest link, down 35c (-1.1%) at $30.30.
  • The Resource names closed weaker as expected, following the S&P downgrade to some of the majors debt rating. BHP lost 2.2% to $14.92, while RIO closed 3.7% lower at $37.54 and Fortescue Metals (FMG) ended 5.1% lower at $1.59.
  • Computershare (CPU) was a market darling today, rallying $0.30 (+2.8%) to $10.85 on the back of a good contract win.

Best Sector – IT
Worst Sector – Energy

Morning Report Tuesday 2nd February 2016

by james Carter

What can negative interest rates mean for equities?

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