Trump stirs markets
WHAT MATTERED TODAY
As expected, the market rolled over following the Trump trade war tweets this morning with international global growth based stocks getting hit hard early. The market didn’t ever meaningfully recover from the 11AM lows, spending most of the day around the 6215 level. The consumer facing stocks rose as credit expanded (which surprisingly didn’t help the banks – more on this later), while energy/utilities/materials all dragged as global growth was put at risk.
Oz Minerals was just 1c away from our buy target, however copper fell through support today below the $US275/lb level so we are unlikely to pull the trigger here at this stage. Today’s weakness also reduced the risk/reward scenario for the European facing ETF’s as we took the prudent/lower risk position with a wait and see approach watching how this trade war plays out.
Overall, the index fell 42 points, or -0.65% to 6215
ASX 200 Chart
ASX 200 Chart
CATCHING OUR EYE
Broker Moves; Nothing out of the ordinary from the brokers today, with Pendal downgraded following the FUM update discussed in yesterday’s report, while CYB was downgraded after a stellar performance over the past few weeks.
· Pendal Group (PDL AU): Pendal Group Downgraded to Hold at Morgans Financial; PT A$11
· CYBG (CYB AU): CYBG Downgraded to Underperform at KBW; PT 3.30 Pounds
Banks; there was a clear switch occurring today from the big 4 to the regional lenders across the board today with tailwinds working two fold for the regional banks. Despite today’s credit data showing a 1.1% uplift in home loans for the month, the bigger banks were down significantly with the AFR reporting underlying weakness in the ability for at least 1 million borrowers to repay loans as rates rise. As the credit market expands, the market expects regionals to earn a larger share of the increasing market, while they are also seen as better lenders and more protected in a rising bad debt charge environment. ANZ was down -0.8% while Bank of Queensland was particularly strong, rising 1.24% in a falling market.
ANZ Chart
Bank Of Queensland (BOQ) Chart
OUR CALLS
No changes to the portfolios today.
Have a great night
Harry & the Market Matters Team
Disclosure
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