Author: james Carter
What can negative interest rates mean for equities?
- A volatile session to start the month with the ASX200 index closing well off its high of 5073 but finishing up +0.80% to 5043; none the less, a positive session and we outpaced our regional Asian peers
- The banks closed mixed, ANZ outperformed the big 4, ending its day up 1.7% to $24.59, while WBC closed 0.7% lower at $30.65.
- In the dairy sector, Bega Cheese (BGA) shed 10.5% lower to $6.32, after it announced that Coles (WES) will not extend its contract with BGA to supply its brand cheese from 2017.
- The Iron Ore names lost ground, but was not surprising after its huge outperformance last week. BHP closed 0.7% lower at $15.25, while RIO ended 0.4% lower at $38.97 and Fortescue Metals (FMG) down 3.2% at $1.675.
- Earlier in the day, Caixin’s China General Manufacturing PMI was reported lower than consensus at 48.2 and also sub “healthy economic levels of 50 or above”.
Best Sector – Health Care
Worst Sector – Financials
Why Market Matter believes oil can reach $US60/barrel
- A choppy session experienced today with the ASX 200 ending its day up 29 points (+0.6%) at 5,005 and finishing the month down 5.9%, its worst performance since August 2015 (-5.5%).
- *The Bank of Japan surprised all with a rate cut, down to -0.1%. Yes, -0.1%, for every day investors this means you pay the bank to hold your hard earned cash.
- Macquarie Group (MQG) lost ground today after a downgrade report by an analyst. MQG ended 2.6% lower to $71.58.
- The Big 4 banks helped the broader market in the green, NAB was the outperformer, finishing up 2.1% at $27.66.
- As we mentioned in the Morning Report Oil appears to be the short term ‘key” to swings in stocks – hence this sector performed well today.
- The Iron Ore names continue to outperform, Fortescue Metals (FMG) rallied a whopping 13.8% to $1.73, where we remain bullish at present and BHP continued it’s positive move up 1.6% to %15.35 and even RIO finished up 0.5% to $39.13.
- On disappointing news, a landmine was again triggered, again in the litigation space, with Shine Corporate (SHJ) downgrading its guidance; shedding 73% to $0.535 (previous close was $2.00).
Please watch out for the weekend report.
Equities have experienced a torrid time in 2016 with the ASX200 currently down 6% and the Dow down ~7.5%.
- After a poor start to the day that saw the ASX 200 index down 37 points in the first hour, the market started to rally quite strongly and by lunch time the market was up 75 points from its lows of 4,909 and closed 30 points higher (+0.6%) at 4,976.
- News this morning that Qube Holdings (QUB) had lifted its bid on Asciano Ltd (AIO). QUB is now offering $6.97 cash and one Qube share for every Asciano share, valuing the company at $9.08 a share. AIO closed up 34c (+4%) at $8.84.
- The banks were thought to be a concern before the market opened, when it was reported that Australia New Zealand Bank (ANZ) were looking at possibly cutting their dividend. However, this proved to be no deterrent to the investors, with ANZ being the strongest bank on the bourse. At the close ANZ finished up 37c (1.5%) to $24.04.
- The other banks had a good day too with Commonwealth Bank (CBA) closing up 23c to $77.83, National Australia Bank (NAB) closed up 20c to $27.10 and Westpac Bank (WBC) closed up 15c to $30.48.
- The Iron Ore names had a great day today, with RIO rallying 2.2% higher to $38.93, FMG closed 4.1% higher at $1.52 and BHP has held above the $15 mark finishing up 0.6% at $15.10.
Best Sector – Telecos
Worst Sector – Consumer Discretionary
Good morning everyone Overview Over the last month the ASX200 is down a disappointing 7.9% but the three stocks we discuss below have enjoyed an excellent start to 2016. When looking at these stocks a number of questions arise including:1. Do we take profit and move to cash?
- A disappointing day after celebrating Australia Day yesterday, the ASX 200 slipped below the 5,000 level to finish the day down 60 points (-1,2%) at 4,946 after trading as high as 5,009.
- National Australia Bank (NAB) shareholders voted strongly in favour of the spinoff of Clydesdale Bank. The new bank will list next week in the UK with Australian shareholders, those who have not already sold their entitlement, are able to sell (or buy) via a listing here in Australia. NAB fell with the rest of the banks, down 86c (-3.1%) to $26.90.
- Crude Oil futures fell in Asia trade, currently down 1% at US$31.14/bbl, leading the energy sector lower by afternoon trade. BHP closed 1.8% lower at $15.01, despite rallying in the US overnight, while Santos (STO) ended 2.7% lower at $2.88.
- Newcrest (NCM) rallied 3.2% higher to $13.52 ahead of its December 2015 quarterly production result tomorrow. NCM remains technically negative from a monthly wave count perspective as per the weekend report.
Best Sector – Consumer Discretionary
Worst Sector – Energy
World markets volatility continues over Australia Day
Good afternoon everyone have a good day tomorrow on Australia Day!
Really bullish, there's more to go in the reflation rally
Please enter your login details
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
To reset your password, enter your email address
A link to create a new password will be sent to the email address you have registered to your account.
Enter and confirm your new password
Congratulations your password has been reset
Sorry, but your key is expired.
Sorry, but your key is invalid.
Something go wrong.
Only available to Market Matters members
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Smart Phone App
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
