Markets whimper into the weekend…but a better week overall! (IFL)
WHAT MATTERED TODAY
A better week for the ASX with the mkt bouncing up despite a higher than expected inflation print coming from the US on Wednesday night – often the mkt stirs itself up into a worry about a particular event, but when it does, then as investors / traders we should be thinking about it from a different angle – I guess that’s the challenge at the moment, to think about things in counter consensus way! Thinking back to two weeks ago, the market was optimistic about the path ahead in 2018 – not a lot of airtime about the prospect of a 10% - short sharp correction for stocks. We have called a correction for some time – it hasn’t stopped us from investing but we’ve done so with caution, and now funnily enough, the headlines into the recent drop are around how ‘cautious’ everyone was before this happened. I’m not a naturally negative person, and I do jump on Sky Business from time to time…some recent clips below for those that are looking for something to watch since Married at First Sight is not on until Sunday….however it never ceases to amaze me how intelligent we all seem after the fact (tongue in cheek). I’m a cynic and it’s hard to change!!!
Anyway we go into the weekend with a better frame of mind, although the close today was weak and I’m pretty sure the volatility is not over yet!
My Tuesday Mornings SKY cross…CLICK HERE
My Wednesday Mornings SKY cross…CLICK HERE
The ASX 200 was down -5pts today or -0.08% to close at 4924
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
CATCHING OUR EYE
1. Market Performance; Looking at sectors over the past week, Healthcare stocks had a cracker courtesy of CSL’s strong result but it was those usual defensive names that struggled.
ASX sectors for week
Source; Bloomberg
In terms of stocks, the most volatile company in the 200 (GXY) had a good week – the personification of risk on / off it seems while BHP also made the cut on the positive side of the ledger…
Source; Bloomberg
2. IOOF Holdings (IOF) $10.27 / -2.19%; A poor day of trade for IFL despite what I thought was a reasonable result. Here are my thoughts post the conference call….but without running numbers yet.
The top line was good which is to be expected given the expansion of the business, but still, it was good. It seemed the market was focussed on 2 things. Adviser departures and margins. The adviser departures are a negative, but not that surprising and there is a difference between adviser departures and funds departures. If you’ve got an old adviser network, as ANZ did (the business they bought) then change can be a big issue for them and someone thinking about retiring may bring it forward, however, a retiring adviser doesn’t take FUM, they pass it on internally. The margin compression is more a concern but it is a trait across the industry – we’re certainly experiencing it. (que the tissues!) Cost cutting was ok but there is only so long costs can be cut, and if we have a theme of okay top line growth, but deteriorating margins at a time when costs are coming out, what will happen when there are no more costs to cut? Organic growth was also low.
All up – a decent result in terms of the headline numbers but the underlying composition was a tad weak. They did good on the conference call about allaying mkt fears associated with the ANZ acquisition...We own it in the Growth Portfolio
IOOF Daily Chart
REPORTING THIS WEEK
OUR CALLS
No changes to the portfolio today…
Have a great night
James & the Market Matters Team
Disclosure
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
Disclaimer
All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 16/02/2017. 4.56PM
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