Skip to Content

Author: james Carter

Market Matters Morning Report Wednesday 6th April 2016

by james Carter

Reinforcing our current views Good Morning everyone Overview Firstly, we’d like to set out once again our current views on the market, the reasons why we should cautious, our decision to move to 39% cash in the Market Matters portfolio, and the likely path over the next month or so. We’ll also cover the rationale for the two share sales yesterday. Current positioning In recent weeks we were calling for the US market to make a new high – about 5% above where it was trading at the time and for that to support a move in the ASX 200 up to 5250/5300. We got to 5216 on the ASX 200 and felt the upside had become limited so we put ourselves into ‘sell mode’, increasing cash levels in the Market Matters portfolio. The Aussie market started to pull back from that time as concern around bad debts in the banking sector emerged. With banks such a large influence on our index, the market started to underperform pretty dramatically v the US market which continued to be well supported. That support however – as we flagged in our March 22nd report – is largely coming from the companies themselves that have large buy-back programs under way. Companies using cash to buy back their own stock on market. They then cancel the shares, which results in a smaller number of shares on issue, and they ultimately see an improvement in their earnings per share (EPS). It’s a way of manufacturing growth.
Show more…

You need to be a member to view this article

REGISTER FOR FREE INSTANT ACCESS

Market Matters Afternoon Report Wednesday 6th April 2016

by james Carter

Market Matters Morning Report Tuesday 5th April 2016

by james Carter

All eyes on the RBA at 2.30pm Good Morning everyone Overview A fairly quiet night overseas and our FUTURES are up just +2pts…so a tepid open is expected with most waiting around the RBA decision at 2.30pm this afternoon. Obviously no change is expected, however as we wrote yesterday, language around the level of the currency will be the most watched part of the statement. If Glenn Stevens comments about the AUD being too high relative to prevailing economic conditions expect a sharp sell-off in the currency – although we doubt that will happen. Key level for ASX 200

Market Matters Afternoon Report Tuesday 5th April 2016

by james Carter

Market Matters Morning Report Monday 4th April 2016

by james Carter

What now for the Aussie Dollar? Good Morning everyone Overview We’ve called the Aussie Dollar higher from significantly lower levels as the US pushed back on rate hike expectations and the overheated – overcrowded – long US Dollar trade took some time to unwind. We targeted the 75c range from under 70c and we’ve now punched through that level to trade at 76.72c. Clearly, after such a big rally, it gets more difficult to predict the next likely move – however – we’re in the business of having a view – and presenting it – so, here it is… Factors driving the currency – Firstly, the AUD is a small cork in a global ocean of currency flows and its moves are dictated by global macro factors as much as the strength or otherwise of our local economy and interest rate settings (& rhetoric of our central bank). – The USD rallied more than 12% versus the Aussie in 2015 and from the start of 2014 the USD has rallied more than 23% v the AUD. Obviously the USD has rallied strongly against many major currencies and to track that, we look at the US Dollar Index. The U.S. Dollar Index measures of the value of the U.S.
Show more…

You need to be a member to view this article

REGISTER FOR FREE INSTANT ACCESS

Market Matters Afternoon Report Monday 4th April 2016

by james Carter

Market Matters Morning Report Friday 1st April 2016

by james Carter

US jobs data & wage growth – why it’s important Good Morning everyone Overview A quiet night in overseas markets to end what’s been a very volatile start to 2016. We highlighted trading ranges in yesterday’s note flagging the theme that those markets supported by central banks have continued to perform reasonably well – particularly the US which actually finished the quarter in the black – up +1.5% for the DOW JONES. Economic data is obviously key to US monetary policy – and probably the short term fate of markets. Non-Farm payrolls data is out in the US tonight with the market expecting +206,000 – but more importantly, data on wage growth should be keenly watched. Although the US economy is adding jobs, we’re not seeing a lot of upward pressure yet on wages which, would suggest (as Fed Chair Janet Yellen has noted) there remains a fair amount of slack in the US labour market. We’d argue that US wages growth is the key indicator that will dictate Fed policy in 2016. Wages growth underpins inflation which – at this stage at least – remains a long way below the Fed target of 2%…
Show more…

You need to be a member to view this article

REGISTER FOR FREE INSTANT ACCESS

Market Matters Afternoon Report Friday 1st April 2016

by james Carter

Market Matters Morning Report Thursday 31st March 2016

by james Carter

End of month – end of quarter – volatility reigned supreme Good Morning everyone Overview The last day of the month and last day of the quarter is here – and what a start to 2016 it has been. Volatility has reigned supreme in global markets with only one major global index (still with one day to go) in the black. Of course, that’s the S&P 500 in the US which has been supported by a very ‘accommodative’ central bank. If we look at the German DAX, French CAC and UK FTSE it’s also obvious that central bank support from the ECB has helped to support those markets….. On the flip side, Asian markets have been soft and we’ve been caught up to a large degree in that weakness.

Market Matters Afternoon Report Thursday 31st March 2016

by james Carter

Back to top