Stocks tread water for a second session (QBE)
WHAT MATTERED TODAY
The market chopped in and out of positive territory with little direction today, trading in a tight 30pt range. Utilities and healthcare offered the most value while the run-in energy continues. The regulatory issues with the banks continue with CBA the best managing to close flat for the day. however worth remembering that CBA also went through Austrac issues not long ago and suffered as a consequence in the short term. Goldmans downgraded Oz Minerals (OZL), pulling the stock back from recent highs. We own the stock, the concerns raised about the dislocation with the underlying commodity price have some merit in the short term, however markets are forward looking, and the price of copper looks strong from here.
US Futures were little changed during out time zone and the ASX was fairly muted at the timeline.
Overall, the ASX 200 gained +4pts /0.06% today to close at 6851. Dow Futures are flat
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE
QBE Insurance (QBE) –1.13%; lower today, but it did manage to claw its way back from the early sell off. The company announced North American crop results would hit earnings with claims outpacing premiums in 2019 as a result of poor weather. An unusually cool growing seasons and an increase in hail events has forced the company to increase the operating ratio of the North American crop business to 107%-109%, and now expects the groups combined operating ratio to come in above their target range of 94.5% to 96.5% The announcement also flagged falling net investment returns in 2020 as interest rates fall globally. Notorious for its downgrades, QBE isn’t one for us yet, however this is a good way to play rising interest rates when the FOMC does turn.
QBE Insurance (QBE) Chart
Broker moves;
· Sandfire Raised to Outperform at Macquarie; PT A$6.80
· NAB Cut to Hold at Bell Potter; PT A$27.50
· APN Property Rated New Buy at Moelis & Company
· Ainsworth Game Raised to Neutral at Macquarie
· Perenti Global Rated New Hold at Jefferies; PT A$1.85
· Seven Group Rated New Buy at Jefferies; PT A$21.80
· ALS Rated New Hold at Jefferies; PT A$9.40
· Monadelphous Rated New Buy at Jefferies; PT A$20
· Imdex Rated New Buy at Jefferies; PT A$2
· Emeco Rated New Buy at Jefferies; PT A$2.50
· NRW Holdings Rated New Hold at Jefferies; PT A$3.40
· Home Consortium Ltd Rated New Neutral at JPMorgan; PT A$3.70
· Northern Star Raised to Neutral at Credit Suisse; PT A$9.60
· Treasury Wine Rated New Positive at Evans & Partners Pty Ltd
· OZ Minerals Cut to Sell at Goldman; PT A$8.70
· Redbubble Cut to Neutral at Goldman; PT A$1.12
OUR CALLS
No changes to the portfolios today.
Major Movers Today
Have a great night
James, Harry & the Market Matters Team
Disclosure
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