No Imminent Rate Hikes – says RBA
A very volatile session played out on the market today with early weakness attributed to softer commodity prices overnight and worries over the US political scene. A reasonable fight back on the back of comments from the RBA’s Guy Debelle talking down the prospect of any imminent rate hike - before we traded lower into the close.
We had an overall range of +/- 52 points, a high of 5761, a low of 5709 and a close of 5722, down 38pts or -0.67%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Seek (SEK) – We exited the stock today for a small profit partially to increase cash levels in the MM portfolio, and partially given our view that we now see only marginal upside from current levels for the US Tech Stocks, and Seek has a reasonable correlation to them. We purchased SEK into recent weakness below $17.00 however given our views around the risk v reward of US tech sector, and importantly, the underlying weakness that is obvious in the local market (it’s inability to rally on a sustained basis), we prefer to increase cash at current levels.
By selling SEK, we now have cash in the portfolio of 18.5% - which gives us plenty of flexibility going forward.
Seek (SEK) Daily Chart
Fortescue (FMG) – Iron Ore was down 1.2% in Asian trade today, dragging FMG down with it. The stock closed down 2.5% to $5.06, which is now down close to 5% since we sold out in the Growth portfolio 3 weeks ago. The underlying company is still in a great position and we continue to like it, however it clearly tracks the Iron Ore price closely. Chinese and steel production data of late has been supportive however Iron Ore was technically weak at the time we sold out. This short term weakness looks likely to continue, however recent numbers and yearly production downgrades from RIO and Vale will be positive for Ore prices in the second half of this year, and a positive for FMG. The stock moves quickly in both directions, so having cash in the portfolio is key. It is likely that we will jump back into FMG after this weakness plays out.
Fortescue (FMG) Daily Chart
Have a great weekend & watch out for the report on Sunday
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.
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 21/07/2017. 4.40PM.
Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The MarketMatters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.
The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor. Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.
The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports.
If you rely on a Report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.
To unsubscribe. Click Here
