Market Matters Afternoon Report Monday 12th September 2016
Good Afternoon everyone
Market Data
What Mattered Today
The ASX200 got hammered today as expected, but the lack of any recovery intra-day, plus yet another awful close from the futures market does not bode well for the next 24-48 hours. We closed down a depressing 120-points (-2.2%), yet all day the best bounce the market could manage was 16-points, prior to the aggressive sell-off into the close. With the Japanese Nikkei down 2.7%, New Zealand -2.5%, Hong Kong -2.7% and the US futures down 0.6% at the time of writing this report, it's no surprise that buyers did not resurface with any enthusiasm - we actually performed ok on a relative basis!
Unfortunately and technically, we believe the local market has broken down and we will look to reduce our market exposure into the next 80-100 point bounce. The next 2 levels of support are at the 5150 and 5050 areas respectively.
ASX 200 Daily Chart
ASX 200 Intraday Chart
Stock markets are coming under pressure, as bond markets start pricing in higher interest rates and it comes as no surprise that one of the very few stocks that managed to close in the black today was QBE Insurance, whose profitability benefits from higher US interest rates and a weaker $US.
Technically and fundamentally we like QBE but ideally would be buyers under $9.50.
QBE Insurance (QBE) Monthly Chart
Within the market itself, there were few standouts in either direction, with most stocks / sectors very weak.
A few stocks / sector that caught our eye were:
1. CBA only down 0.9%, as it received a "safety" bid.
2. Stocks that have performed well over the last month / year, getting whacked as investors grabbed any remaining profits e.g. Macquarie Bank (MQG), JB Hi-Fi (JBH) and Challenger (CGF).
3. The energy sector underperformed, falling 3% after enjoying a strong Friday.
4. Major resource stocks underperformed with BHP, FMG, S32, NCM and FMG all down over 4%.
5. Quasi-bond stocks that we have been bearish were getting thumped e.g. Sydney Airports (SYD) -6.3% and the REIT's -2.9%.
We reiterate that while it's not time to panic, this is the first time in 3-years that we have no interest buying an aggressive sell-off.
Sectors
Source; Bloomberg
ASX 200 Movers
Select Economic Data – Stuff that really Matters in Green
What Matters Overseas
FUTURES LOWER…
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 12/09/2016. 5:00PM.
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