ASX makes another new all-time high (WOW)
There was a clear turning point mid-morning today with the market swivelling 180 degrees a little after 10.30am post the release of the Westpac Consumer Confidence which came in soft. The market was looking for a marginal fall in confidence, they got a reasonably significant hit of nearly 2% which sent the Australian dollar lower, and the relative value of the ASX200 higher – hence the buying power pushing the index up to (another) all-time high. A rebound in skilled vacancies further spurred the buyers with the index finally settling in well above the7100 mark.
Source: Bloomberg
The broad-based buying helped all sectors finish in the black today although there was a tendency towards the riskier end of stocks with Tech one of the standouts. The exception to the rule was Consumer Staples, often a more conservative sector but topped the boards today thanks reports Kaufland was departing without ever really arriving which helped the staples names up – more on this below.
Overall, the ASX 200 rose 66pts / +0.94% today to close at 7132. Dow Futures are trading higher by 110pts/0.38%
S&P/ASX 200 Chart
S&P/ASX 200 Chart
CATCHING MY EYE
Woolworths (WOW) +3.27%; We covered WOW in the income note earlier today however it kicked higher, particularly late in the session, after a report emerged that Kaufland had informed Australian employees it would be withdrawing from Australia without yet opening a store. The email to employees quoted acting CEO Frank Schumann in apologizing to the 200 employees saying the company would look to focus on its core European brand.
The news helped supermarket shares higher on less competition than the market was preparing for. We flagged this issue in today’s Income Report, and although one potential participant has dropped out, others are or soon will join the Australian supermarket landscape making it difficult to buy WOW, particularly on such a light yield.
Woolworths (WOW) Chart
Broker moves; if there was ever proof that analysts tended to be reactionary, today was the day. Credit Suisse upgraded FMG to the equivalent of a hold today, bumping their price target up a whopping 47% from $7.50, the day FMG hit new all-time highs. The report titled “Let the good times roll” – though the music stopped for Credit Suisse clients some time ago with the sell rating on one ASX’s best performer of late – they talked to an increased iron ore price deck following the house view on Chinese steel production was revised higher.
· Domino’s Pizza Enterprises Cut to Sell at Citi; PT A$48.60
· Suncorp Cut to Neutral at Citi; PT A$14.30
· QBE Insurance Raised to Buy at Citi; PT A$15.20
· Rio Tinto Cut to Market Perform at BMO; PT 4,650 pence
· AP Eagers Cut to Hold at Morgans Financial Limited; PT A$11.96
· Fletcher Building Cut to Hold at Morningstar
· Perseus Rated New Buy at Cormark Securities; PT C$1.15
· Mirvac Group Raised to Neutral at JPMorgan; PT A$3.20
· Dexus Raised to Overweight at JPMorgan; PT A$13.50
· Stockland Cut to Underweight at JPMorgan; PT A$4.30
· Char Raised to Overweight at JPMorgan; PT A$3.65
· Char Raised to Buy at Goldman; PT A$3.57
· Hub24 Raised to Add at Morgans Financial Limited; PT A$13.35
· Fortescue Raised to Neutral at Credit Suisse; PT A$11
· Goodman Group Raised to Neutral at Goldman; PT A$13.28
· Flight Centre Cut to Neutral at Credit Suisse; PT A$44.83
· Resolute Mining Cut to Hold at Baillieu Ltd; PT A$1.14
OUR CALLS
We added Tencent (700.HK) to the international equities’ portfolio today.
Major Movers Today
Have a great night
Harry & the Market Matters Team
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