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Month: June 2016

Market Matters Afternoon Report Wednesday 8th June 2016

by james Carter

Market Matters Morning Report Tuesday 7th June 2016

by james Carter

Why we remain bullish US equities One of our better calls over recent years has been the forecasted path for US stocks, in particular it enabled us recently to get very bullish at the start of this year when the S&P500 tested the 1800 area – the broad US market has since rallied a very healthy 16.5%. We look at a number of simple fundamentals to support our technical view and in the case of US stocks the path becomes fairly clear. Technically the S&P500 is unfolding in a classic “Phase 5” advance to complete the bull market rally since the infamous GFC. We remain bullish targeting fresh all-time highs in coming months prior to a 20-30% correction. However with the S&P500 now only 1.2% below all-time highs the risk / reward for purchasing stocks is diminishing and hence buying should be selective with clearly quantified stops. We’re also looking for ‘events’ that provide a trigger for action in our stock selection. Estimating how far the rally to fresh highs will extend is almost impossible hence we will be keeping our finger on the pulse over coming months but our best guess would be at least the 2300 area. The US S&P500 Index Monthly Chart

Market Matters Afternoon Report Tuesday 7th June 2016

by james Carter

Market Matters Afternoon Report Monday 6th June 2016

by james Carter

Market Matters Morning Report Monday 6th June 2016

by james Carter

How are the “FANGS” looking as US stocks power on? The American FANG stocks (Facebook, Amazon, Netflix and Google) have become household names and rewarded investors very nicely over recent years. However from late 2014, US stocks have consolidated their excellent gain since the GFC, the S&P500 is currently only 1.7% below its all-time high and the tech based NASDAQ is 5.1% below its 2015 high. The FANG stocks have been exceptional performers since 2012, showing respective gains between ~350 and 900%. We thought today was an opportune time to look at these 4 stocks which contribute both points and arguably more importantly, significant sentiment to any rally / decline for US stocks. If the broad US market is going to advance to fresh all-time highs this year, as we are predicting, then the FANG stocks are more than likely required to be strong and potentially leaders. We will look at them individually from a technical perspective as fundamentally they are tricky often trading on enormous valuations in anticipation of massive future earnings growth. The NASDAQ Index Monthly Chart

Market Matters Afternoon Report Friday 3rd June 2016

by james Carter

Market Matters Morning Report Friday 3rd June 2016

by james Carter

Are Cracks Forming in the Healthcare Sector? Yesterday, Merrill Lynch downgraded Estia (EHE), Japara (JHC) and Regis Healthcare (REG), with the view that the companies are facing no future earnings growth. These 3 company’s operate aged care facilities around Australia and yesterday’s research report hit the stocks hard, EHE -5.7%, JHC -9% and REG -8.5%. However, the local Healthcare Sector made all-time highs last month and is currently showing no reason to abandon the sector on mass, but individual stocks may tell a different tale. The Healthcare Sector is trading on a p/e ratio of 28x, more than double that of CBA, yet it pays a dividend of only 1.9% compared to CBA’s of 5.5% fully franked. These simple numbers are absolutely fine if the healthcare stock is demonstrating growth going forward, BUT very dangerous if it’s not. Today we are will look to identify any members of the sector that look vulnerable to us, plus whether yesterday’s sell off is presenting potential buying opportunities in the 3 battered stocks.
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Market Matters Afternoon Report Thursday 2nd June 2016

by james Carter

Market Matters Morning Report Thursday 2nd June 2016

by james Carter

Will a June correction become self-fulfilling? Pessimism is rife, that the ASX200 will fail at the 5400 area and return to the disappointing days of the last 15 months. Unfortunately we all know since last March, the local market is down 11.2%, while during the same period, the US S&P500 is up 1.8%. The big end of town has generally been the worst place to hide over the last year, with the banking index down 13%, energy 25%, Woolworths 20%, BHP 34% and RIO 22% to name some key examples. Currently, stock selection has arguably never been more important to achieve optimum portfolio gains. Over the last 2 days, the local market has fallen 100 points, again ignoring mildly positive leads from the US. However it should be remembered, that June is basically only the financial year end for Australia and New Zealand, hence we are much more likely to run our own race over coming weeks. The ASX200 Weekly Chart When Market Matters looks at short time frames, we look at the futures markets, as the prices exclude index changes due to large dividends being paid. We understand that many subscribers are not familiar with futures and it’s an area we will explain in a report when markets are quiet, but in simple terms the futures price theoretically moves point for point with the ASX200.
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Market Matters Afternoon Report Wednesday 1st June 2016

by james Carter

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