A quiet session to wrap up a positive week (700 HK)
WHAT MATTERED TODAY
A soft end to the week as the market continues to pin itself to the 6000 handle – this is starting to get repetitive! We’re now in the third month of a market that has held between 5700 & 6200, not uncommon after a big washout low, a strong recovery followed by a period of consolidation however we’re clearly tracking Europe more than the bullish backdrop coming from US indices.
Asian markets were hit today after President Trump signed a pair of executive orders prohibiting U.S. residents from doing business with the Chinese-owned TikTok and WeChat apps – more on that below – with the move hurting our China facing resource companies which provided the biggest weight on the index today. Healthcare had another tough session, Resmed (RMD) off again but finishing above session lows while the retailers were best on ground again, Super Retail (SUL) looks great for a test of the $10.50 region.
LOCAL REPORTING CALENDAR: CLICK HERE **Please note, data sourced from Bloomberg, not all ASX companies are on this list and dates can vary**
Today we saw results from REA & IAG, I focus on REA in the recoding below. Reporting heats up next week.
Overall, the ASX 200 closed down -37pts/-0.62% to 6004 today. US Futures are lower, with Dow Futures off -59pts/0.22%.
ASX 200 Chart
ASX 200 Chart
CATHCING MY EYE
Tencent (700 HK) -3.23%: President Trump signed a pair of executive orders today prohibiting U.S. residents from doing business with the Chinese-owned TikTok and WeChat apps beginning 45 days from now, calling out the national security risk of leaving Americans’ personal data exposed. Clearly this is a move to take the focus off his Coronavirus gaffs this week and try to resurrect his hopes for re-election. WeChat’s is owned by China’s Tencent (700.HK), a position we hold in the MM International Equities Portfolio. While this is clearly a negative for the holding, it seems likely that Trumps first position on this is the worst-case scenario, an initial shot across the bow. We recently trimmed Tencent however remain keen on the story, particularly its exposure in gaming.
Tencent (700 HK) Chart
Sectors this week – Defensive sectors weakest
Source: Bloomberg
Stocks this week
Source: Bloomberg
OUR CALLS
No changes today
Have a great night
Harry and 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, or after the session when positions are traded.
Disclaimer
All figures contained from sources believed to be accurate. All prices stated are based on the last close price at the time of writing unless otherwise noted. Market Matters does not make any representation of warranty as to the accuracy of the figures or prices and disclaims any liability resulting from any inaccuracy.
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 Market Matters 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. Market Matters may publish content sourced from external content providers.
If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. 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.
