ASX follows Asian markets into the red (AXL, MNY)
WHAT MATTERED TODAY
A quieter day on the reporting front with some of the smaller companies out with results - still we had some big moves in underlying stocks prices today with companies that miss suffering more than simply on the day of the miss while those that beat have seen some sustained buying. This suggests that fundies are holding back until results are reported, understandable given the longevity of the current bull market i.e you wait to back the companies with good micro trends rather than backing the market generally to do the heavy lifting – that fits with the MM view at the moment.
It seems Mr Trump is posturing ahead of further discussions with China, saying the US is weighing whether or not increase the proposed tariff on $US200 billion of Chinese goods to 25% from 10%, stepping up pressure on Beijing to change its trade practices. That saw the majority of Asian markets down sharply today and as one trader suggested on Bloomberg, the 35pt/0.55% decline for the Aussie index actually felt like a good result relative to Japan down -1.25%, Hong Kong down -2.22% and China off by -2.5%.
Overall, the ASX200 lost -34 points today or -0.55% to close at 6240 – Dow Futures are currently trading down -79pts. We are now neutral the ASX200 given the drop below 6250 today, with a break of the 6140 point required to turn us outright bearish.
We’ve commenced domestic reporting season and subscribers can view a list of companies reporting dates over the next few weeks here. Click here to view the reporting season calendar
ASX 200 Chart
ASX 200 Chart
CATCHING OUR EYE
Broker Moves;
· Meridian Energy Cut to Underperform at First NZ Capital
· BWP Trust Cut to Sell at Moelis & Company; Price Target A$2.95
· ALS Upgraded to Neutral at JPMorgan; PT A$8.17
· Alacer Gold Downgraded to Neutral at Macquarie; Price Target C$3
· Alumina Downgraded to Sell at Morningstar
· Janus Henderson GDRs Cut to Neutral at Evans and Partners
· Janus Henderson Downgraded to Hold at Deutsche Bank
Rio Tinto (RIO) $77.65 / -4.9%; RIO came back online today after yesterday’s result and opened reasonably well considering the miss however selling was sustained throughout the session. When a company misses we’re seeing sustained moves in the direction of the miss for some days…so we expect some further downside in RIO. Our eventual target sits at $74 - we covered our views in more detail this morning. click here
Rio Tinto (RIO) Chart
Axsess Today (AXL) $2.44 / +5.4%; jumped after announcing FY18 numbers and FY19 guidance. NPAT for the year gone was in line with guidance (but slightly below consensus) however the highlight was a strong FY19 NPAT guide of $12.5m-$13m, representing 80% growth and above most analyst numbers, while also noting additional capacity headroom following the recently listed bond that we hold in the Income Portfolio trading under AXLHA. AXL was up 5.4% today to $2.44.
Axsess Today (AXL) Chart
Money 3 (MNY) $2.07 / +2.48%; Credit provider MNY was out today with an earnings update for FY18. The result was a slight upgrade on the profit line from 31mto 32m and above their initially provided guidance for FY18 at FY17 result of $29-$30m. The final dividend to be at least 4.5cps (fully franked likely), following a first half dividend of 4.5cps. FY18 dividends now likely to total more than 9cps. MNY is an interesting business with further growth to come by the look of it.
Money 3 (MNY) Chart
OUR CALLS
No trades across the MM portfolios today
Have a great night
James / Harry & 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.
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