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Author: james Carter

Market Matters Morning Report Friday 17th June 2016

by james Carter

Looking at 5 more stocks that ‘BREXIT’ has affected Last night, the Dow rallied over 250 points from its lows as market jitters around BREXIT eased. These markets are simply knee-jerking around, as any news hits the trading screens. It was the awful news overnight that UK politician, Jo Cox had been tragically murdered in the street by someone shouting “Britain first!” leading to halt in campaigning by both the camps. However, it should also be remembered that history tells us, albeit from a small number of examples, that it was over the last week that supports swells for what people know as safety first kicks in i.e. “Stay” in the EU. We remain of the opinion that the BREXIT vote will be to “Stay” and hence, continue our search for affected stocks that may be showing value now, or over the coming week. Interestingly last night, the VIX / Fear Index fell back under 20%, implying investors are either regaining comfort that Britain will remain, or they have bought all their puts / protection they need! The ASX200 has recently corrected 5.2%, with BREXIT jitters the main contributor, hence it’s time to spend some of our ~36% cash allocation. Today, we will look at another 5 stocks with decent UK exposure after yesterday’s similar report.
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Market Matters Morning Report Thursday 16th June 2016

by james Carter

Looking for opportunities in 5 stocks that BREXIT fears are hitting Slowly next week’s BREXIT vote approaches with even Janet Yellen saying the Fed considered the UK’s pending vote when not raising interest rates this morning. However, we believe with the US economic data disappointing over recent times the Fed is now unlikely to be in a position to raise interest rates twice in 2016, compared to the anticipated four increases only last December. In fact, the market is now pricing the next interest rate hike in 2017 – not 2016.

Market Matters Afternoon Report Thursday 16th June 2016

by james Carter

Market Matters Morning Report Wednesday 15th June 2016

by james Carter

We MUST Remain Focused During Heightened Volatility What a difference a few days makes, only last Thursday we pointed out that US stocks had moved less than 0.5% for 9 consecutive days, but warned of a potentially large move ahead due to all the geopolitical risks on the horizon. This concern has played out in dramatic fashion as the BREXIT vote appears to be no longer a foregone conclusion – hence, reaffirming our logic in holding around 36% in cash. Bookmakers, who are historically far more reliable than polls, have increased the possibility of a UK exit from the EU from 15% to 38% – the “Remain” vote is still ahead, but the risks of an exit have increased. The VIX (Fear Index) Weekly Chart With volatility increasing in most financial markets, today’s report is focusing on a few different specific areas as we keep our finger on the pulse during these exciting times. BREXIT There looks to be no doubt that this will be the focal point for markets over the next 9 days. Last night, UK stocks fell another 2% making it a 6.3% reversal over the last 2 weeks. The good news for equity markets is we now have the potential for bad news built into stock prices to a certain degree. A buy signal will be generated for the FTSE on a break back over 6075 – even before the vote.
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Market Matters Afternoon Report Wednesday 15th June 2016

by james Carter

Market Matters Morning Report Tuesday 14th June 2016

by james Carter

BREXIT is finally being taken seriously With the polls sitting at 50-50, it was amazing last week that stock markets were ignoring the possibility of Britain leaving the EU and the contagion risks that would bring into play. This week, things have changed with a bang as is clearly illustrated by the VIX / Fear Index below, which has rallied 65% in only 5 trading days, with the vote in 9 days’ time looming. Markets often go through periods where they are dominated by one topic and BREXIT looks like taking the mantle until the 23rd – remember US rate increases, Donald Trump, Greece, China and even the Scottish referendum etc. As we are sitting on over 35% cash, this volatility obviously makes us lick our lips, in anticipation of opportunities / bargains that may present themselves in June. The VIX (Fear Index) Weekly Chart Firstly, let’s briefly consider how BREXIT is unfolding and our interpretation of the likely outcome and of course, potential risks to markets. If Britain leaves the EU, the exact economic damage is impossible to predict, but it will be substantial and may take years to unravel. This enormous economic risk is the backbone of the “Stay” party’s campaign and one that is definitely scarring many voters. Conversely, immigration is the driving force of the “Leave” party and the recent atrocities of Orlando only reinforce the locals’ questions around the UK’s current policy stance. A quote in today’s Guardian reflects how many older Brits are thinking: “Immigration is out of control, the country is a mess and Brussels and the Germans are telling us what to do even though we won two world wars”. Last night, the British Pound gyrated between losses of 1% and gains of 0.
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Market Matters Afternoon Report Tuesday 14th June 2016

by james Carter

Market Matters Afternoon Report Friday 10th June 2016

by james Carter

Market Matters Morning Report Thursday 9th June 2016

by james Carter

Three markets we are currently watching very closely On the surface, markets feel very quiet with US stocks only 0.8%, below their all-time high and the S&P500 noticeably moving less than 0.5% for 9 consecutive days. The ASX200 remains around the 5400 area, where it has treaded water for the last 5 weeks and it currently feels like the end of financial year (EOFY) may become a non-event for our local stocks. With the BREXIT vote looming in 2 weeks and the market keen to see whether last week’s poor US unemployment data was a once off, it’s easy to predict a few more weeks of relative calm for stock markets. However its often during these very periods of market consolidation / relative inactivity that large moves commence, just after complacency sets in and stocks move earlier than expected in anticipation of future good or bad news. We are watching three markets closely at present that may determine our next investment decisions. We are currently holding ~36% in cash, we regard this large holding as comparatively aggressive to when we went 97% fully invested in stocks near the lows of 2016, but we are prepared to go higher into cash if circumstances dictate. ASX200 Weekly Chart

Market Matters Afternoon Report Thursday 9th June 2016

by james Carter

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