Market Matters Afternoon Report Thursday 1st September 2016
Good Afternoon everyone
Market Data
What Mattered Today
The index was fairly benign again trading within a tight range today however importantly, the 5400 level that we’ve written about numerous times continues to hold firm.
ASX 200 Daily Chart
From an index perspective, BHP weighed by nearly 6 index points after trading ex-dividend – but it was only by 18c plus franking and the stock was down 59c (or -2.89% to close at $19.84). The Oil price the main drag on BHP (and others) today with the energy sector whacked - Origin (ORG) down -3.23% to $5.09 – while Oil Search (OSH) was off by 0.97% to $6.65 although that was some way off the intra-session low of $6.56…
Overall, we had a range of +/- 24 points, a high of 5429, a low of 5405 and a close of 5415, down -17 points or -0.32%. A choppy session that saw some reasonably important economic news flow from Oz and China….
ASX 200 Intra-Day Chart
At 11.30am retail sales came out and were flat v a rise of +0.3% expected relative to a gain of +0.1% from last month. The Aussie dollar dropped initially but then traded higher throughout the session. As they say, one sunny day does not make a summer and it’s unlikely the RBA will be prompted to cut following one weaker than expected economic print.
In China, we had manufacturing data for August with the official print better than expected while the Caixin – which is the old HSBC number was a tad weak – but still at 50.0 v 50.1 expected so nothing overly concerning.
We’ve spoken a lot about GOLD stocks in recent times and it’s a sector we’re watching closely. Weakness prevailed again today with some of the names we’re watching once again under pressure. Newcrest (NCM) down another -2.25%, Regis (RRL) off -1.89%, Northern Star off -0.99%...As we’ve written lately, we’re buyers of weakness here targeting slightly lower levels. Subscribers – keep an eye out for SMS/Email alerts.
The Gold miners have been big losers in August – Of the TOP 5 Australian names – NCM, EVN, NST, SBM, RRL. Newcrest (NCM) looks the cheapest on a price to book metric but EVN and NST have really given up a lot of recent premium.
Here’s a quick chart courtesy of Shaw and Partners Research highlighting the weak performance.
Source; Shaw and Partners
Gold equities (USD and AUD) are now underperforming the physical gold price after a significant period (from 19 January low) till the first couple of days of August where there was massive outperformance….They tend to outperform when the GOLD price is rising and underperform when it’s falling.
Source; Shaw and Partners
As discussed in recent reports – we’re keen on Newcrest Mining (NCM) but at slightly lower levels…
Newcrest Mining Daily Chart
Vocus (VOC) continued to trade higher today showing further signs that the obvious seller in recent weeks is now done and dusted (hopefully). The bounce is encouraging for now and we think the stock is good value here….
Vocus (VOC) Daily Chart
….and finally, Firstwave (FCT) is a small tech coy we’ve written about in recent times. It’s had another good day today adding +10% and now trading above 40c. Speculative but interesting!!! Good volume today.
Firstwave (FCT) Daily Chart
Sectors
Source; Bloomberg
ASX 200 Movers
Select Economic Data – This week Stuff that really Matters in Green
What Matters Overseas
FUTURES higher…
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 1/09/2016. 5:00PM.
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