Not a lot to hang ones hat on today…!
The market chopped around today with no clear trends from a sector perspective. Banks were mostly higher but CBA was the exception with some obvious rotation out of CBA into the others that will go ex-divi in May….CBA just went Ex-Divi for $1.99 in Feb. BHP trades ex-div for 52.16cps tomorrow and if taken from todays close, BHP should be trading around $24.70 tomorrow – an +11% correction from recent highs set on Jan 25.
RIO has also come back from a high of $69.80 to close at $61.39 today, a drop of -12% from the highs, however it did go ex on the 23rd Feb. Golds continued to be under pressure today as we foreshadowed in the AM report, however there was some tentative buying into weakness. Accumulating Gold on the back foot makes sense to us here…
On the market today, we had an early sell off but recovered most of it to finish a tick in the red - a tight range today of +/- 22 points, a high of 5760, a low of 5738 and a close of 5759, up -1pts or -0.03%, which is pretty typical of trading in March.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Not a lot happening markets wise today however a few things caught our eye…
1. Chinese Trade data out today and it was interesting to say the least – seems every man and dog in China imported something in Feb which saw a massive miss in terms of the trade balance. Exports pretty much inline but imports were massive. Not sure if this is to do with re-stocking / stockspiling etc that we’ve seen in Iron Ore, Copper, Coal etc over the past few months but clearly a very BIG number on the imports side.
2. Volatility continues to be crunched but that’s fairly typical of this time of year. Volatility in March has fallen 9 out of the last 10 years, and we look on track to make it 10/11. Low volatility = high complacency which is clearly a risk….or for those in the options market it’s cheap to buy options / volatility but that will require patience given the trends in the chart below
3. More weakness in the Oil price overnight and the energy sector was the weakest link in the U.S, however we saw buying here today….Origin (ORG) +11c or +1.74% to $6.42 the standout…although most of the sector saw some buying, ORG is clearly the standout in terms of it pullback from recent highs coming back by 14%....One to keep on the radar again after we sold our last trache around $7.00
4. Gold was hit today and stocks fell on the back of it, however there were some tentative signs of buying post the morning gap lower. As suggested above we continue to think that buying gold stocks on the back foot makes sense, however we’re clearly seeing some of the speculative money that piled into Gold ETFs and other speculative vehicles start to unwind.
Have a great night,
The Market Matters Team
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