Australian Investment Blog

Good Afternoon everyone

Market Data


What Mattered Today

Another very strong session today with some late buying – which is rare on a Friday afternoon pushing the index up +39pts for a 4th straight day of gains. The ASX200 closed at 5157 – the daily + weekly high…..Value reasonably low still - with $4.68bn through the mkt - although school holidays do have an impact. It’s the first four day rally in more than a month – and the index is now up +264pts or +5.39% from the April 8th low of 4893.

Clearly the market is short resources – or at least underweight the BIG guys such as BHP – which rallied strongly today to close up +41c to $19.28. As we mentioned recently, be fussy selling BHP with initial targets around $21.

Another round of good Chinese Economic Data out today helped allay some of the recent fears around Chinese growth. We had GDP print 6.7% - which was in line with expectations while Industrial Production was stronger + a lot better than market expectations. Retail sales were pretty much inline…

Source; Bloomberg

Below the chart of Industrial Production going back to Jan 2015…which puts today’s number in context + it shows that the ‘old world’ economy isn’t as weak as some thought. A good bounce.



Stocks & Sectors Today

Source; Bloomberg

We talked about Bellamy’s (BAL) and Blackmores (BKL) in this morning’s note – and both had reasonable day’s…with BAL up +5.48% to $10.59 while BKL ended up +2.31% to $169.50





QBE Insurance (QBE)….up +0.88% today to $11.49 following a +3.45% rally yesterday also looks interesting after bobbing along the bottom for a long period of time. Reasonably new management starting to capture the markets attention with consecutive beats on earnings, which in recent years have been rare.

A similar thing happened in Newcrest (NCM) after they got their act together with Lihir…The market is sceptical for a long period, then it’s not, and the stock rallies. QBE worth keeping on the radar. It’s on ours.

ASX 200 Movers


***What Matters Tonight***

European leads are mixed with the FUTURES on the FTSE +3pts, DAX -31pts & CAC –13pts.

In the U.S, DOW FUTURES are off -5pts, S&P 500 FUTURES are off -0.75pts.

We’ve seen the BIG Banks report in the US this week and overall earnings have been way down, even relative to last quarter. Bank of America for example saw profit down 18% but they beat expectations. The issue remains that expectations have been lowered by such an extent by market analysts that it’s nearly impossible to miss. As we’ve written about in length recently, markets are going higher but earnings aren’t, which creates an obvious disconnect. Either earnings pick up, or the market will pull back.

Out tonight we have Citigroup

***What out for the Weekend Report on Sunday morning***


Regards,
The Market Matters Team
Level 12 28-34 O'Connell St
Sydney NSW 2000



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