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Month: April 2016

Market Matters Morning Report Friday 15th April 2016

by james Carter

Have the market darlings had their day? One of the major takeout’s of the last week has been the fickle nature of the stock market towards different sectors as it swings from love to hate and back again, often with no apparent reason; this week everyone loves resources after years in the wilderness. The chart below shows how local retail stocks almost became a joke in the market back in 2012 but then they staged a solid unheralded ~65% rally while the ASX200 has struggled to gain just 10%. We can assure you that not many brokers / clients / fund managers liked retail stocks back in 2012. As we often say look beyond today for at least 6-12 months and IGNORE the newspapers. Australian Retail Index Two amazing success stories of the last 18 months have been Bellamy’s (BAL) + Blackmores (BKL). Both have enjoyed the explosion of baby formula & Vitamin sales into China. The ducks have been perfectly aligned for these two solid companies, including the Chinese decision to abolish their one child policy. The one child policy has had (as it was intended to) a big impact on population growth in China as the below chart outlines Chinese Population Growth It also means that the Chinese population has been ageing, fairly dramatically since the 1980s as this chart highlights Chinese working age population – showing aging demographic The abolition of the one child policy will clearly have a large impact on demographic trends in China’s, and ultimately, more babies will be born in the coming years. There have been many stories in the press of Australian living Chinese buying all the baby formula stock from local supermarkets and then on selling through eBay or sending directly to China – certainly reinforcing the demand aspect for their products. However it also echoes of panic buying that often accompanies tops in stocks.
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Market Matters Afternoon Report Thursday 14th April 2016

by james Carter

Market Matters Morning Report Thursday 14th April 2016

by james Carter

Market Matters Morning Report Thursday 14th April 2016

by james Carter

What a difference a few days and months make! In Monday’s report, we discussed the CRB Index and resource stocks, specifically stating we would only consider buying BHP around $13. This morning, BHP is set to open over $18.50, up an impressive 15% for the week!

Market Matters Afternoon Report Wednesday 13th April 2016

by james Carter

Market Matters Morning Report Wednesday 13th April 2016

by james Carter

The IMF lowers world growth forecasts & commodities rally? Last night the International Monetary Fund (IMF) lowered world growth forecasts to 3.2% from 3.4%, a figure we still believe may prove optimistic. However, as these negative headlines hit the newswires there was no reaction from markets, the reason is simple – the IMF, like ratings agencies, are behind the curve unfortunately generally playing catch up to market economists/traders. For example world interest rates have remained rooted at historically low levels, indicating no anticipated imminent pickup in economic activity – German 2 year rates are at minus 0.514%. The market will tell you how it sees things going forward and this is where Market Matters looks for clues to the direction of markets. 1. Canadian S&P Composite Index Technically the ASX200 is tricky at present as weakness from the local banking sector has more than offset the strength in the resources sector. However, when we look at the highly correlated Canadian Index the picture becomes clearer. Short term we expect:

Market Matters Afternoon Report Tuesday 12th April 2016

by james Carter

Market Matters Morning Report Tuesday 4th April 2016

by james Carter

Today’s report is relatively short BUT we believe will generate significant thoughts within most Australian investor. Commonwealth Bank (CBA) has become the largest company on the ASX200 with a market cap. of over $120B. As the largest stock in the ASX200, in the most dominant sector, what happens to CBA has a significant influence on the direction of the overall index? CBA has corrected 26.5% from its dizzy heights of March 2015, the question we ask ourselves is at what level should we now become aggressive buyers of this quality bank? Technical analysis simply exists as markets repeat and this is why at Market Matters we believe it has an important role to play in our investing decisions. When we look at the long term chart on CBA above an extremely clear pattern has emerged that should not be ignored until it stops repeating. Clearly CBA likes to correct in classic “abc” style pullbacks: 1. In 2008-9 CBA fell $25.08 from $61.90 to $36.
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Market Matters Afternoon Report Monday 11th April 2016

by james Carter

Market Matters Morning Report Monday 11th April 2016

by james Carter

The CRB Index (Commodities Index) led stocks into significant falls in both the May / June and October / November periods last year, things are again looking interesting.

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