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Author: james Carter

Afternoon Report Wednesday 2 December 2015

by james Carter

  • The ASX 200 took a while to get going today with the predominance of sellers hitting the market early. However, the market rallied strongly after the GDP figures were released at 11.30am and the index finished about ten points off its high; and closed down only 8 points to 5,258.
  • The banks in general were strong with Commonwealth Bank (CBA) and Westpac Bank (WBC) both up nicely- close to 1%. CBA closed up 77c to $81.76 and WBC was up 31c to $33.10.
  • In the resources RIO Tinto (RIO) was unable to sustain yesterday’s strength and finished down 37c (0.8%) to $46.55. BHP Billiton (BHP) was quiet and finished square on the day at $18.75.
  • Landmines continue to detonate before the end of the year, with Spotless Group (SPO) providing investors this morning with a disappointing trading update and profit warning. SPO closed 40% lower at $1.325.

Best Sector – Telcos
Worst Sector – Industrials

Morning Report Tuesday 1 December 2015

by james Carter

Retail stocks getting the headlines for good & bad reasons

Afternoon Report Tuesday 1st December 2015

by james Carter

  • The ASX 200 started the beginning of December , last month of 2015 in great form, rallying 99 points higher (+1.9%) to 5,266.
  • The Bank sector helped the broader market into positive territory with ANZ up 2.4% to $27.79.
  • The Materials sector had a breather from its recent selloff; BHP climbed 3.7% higher to $18.75, while RIO rallied 2.2% to $46.92.
  • The Reserve Bank of Australia (RBA) met for the last time this year and decided to have its rates on hold, for now at 2%.

Best Sector – Consumer Staples
Worst Sector – Utilities

Morning Report Monday 30 November 2015

by james Carter

Is there value in 3 underperforming household names?Good morning everyone and hope you all had a great weekend!OverviewSo far 2015 has been a fascinating but tough year for equities. The market is down almost 4% but some household names have been literally hammered e.g. ANZ Bank -14%, Seek -19% and BHP -35%.When household names get oversold the reactions can be dramatic as was witnessed by QANTAS rallying ~250% over the last few years; clearly aided by the collapse in oil prices that was significantly larger than analysts were predicting. However picking the bottom of stocks that are under pressure is statistically fraught with danger as was illustrated perfectly by Slater and Gordon’s 74% plunge last week alone. Then we look at BHP where Market Matters has recently been looking to pick a value bottom which clearly illustrates how dangerous and potentially expensive this can be.Turning to the MarketsToday Market Matters has chosen 3 well known stocks that have fallen between 18 and 47% in 2015.1 Myer (MYR) $1.07

Afternoon Report Monday 30 November 2015

by james Carter

  • The ASX 200 lost ground and closed 36 points lower (-0.7%) to 5,166 following our brethren, China currently down 2.1%.
  • The main sector of today’s negative tone was driven by the miners, with BHP down 3.6% to $18.09 and Fortescue Metals (FMG) down 4.9% to $1.96.
  • The recently battered Slaters & Gordon (SGH), enjoyed some short covering today and closed 34.1% higher at $0.925 after it reaffirmed its profit guidance to investors.
  • Dick Smith (DSH) was quite the opposite, slumping 57.6% to $0.28 after announcing a $60m impairment charge and cannot reaffirm its previous profit guidance.

Best Sector – Health Care
Worst Sector – Materials

Morning Report Friday 27 November 2015

by james Carter

Looking closely at 3 big movers from yesterdayHappy Friday everyoneOverviewYesterday was very encouraging for local equities with gains being achieved even with the significant negative influences from BHP and Slater & Gordon. The local futures rallied an aggressive 84 points from the opening but drifted from midday closing up 20 points for the day; a break back over yesterday’s high should at least have a second test of 5300 – see chart 1.Turning to the MarketsWith the US enjoying Thanksgiving last night markets have fewer offshore leads today. Nevertheless, futures are calling a healthy open of around +30 points.1 Sydney Airports (SYD) $6.58

Afternoon Report Friday 27 November 2015

by james Carter

  • The ASX 200 climbed on the opening, but it was short lived as the market slipped into the red around 1.00pm. The market finished down 8 points to 5,202. For the week, the index lost 1.1%
  • The energy sector was up today with Woodside Petroleum (WPL) up 2.2% to $30.25, Origin Energy (ORG) was up 1.1% to $5.60 and Caltex (CTX) closing up 1.4% to $34.25.
  • Slater & Gordon (SGH) continued to draw in the sellers, with the stock closing down 25c to 69c down another 27%. The stock has lost just over 74% for the week.
  • RIO Tinto (RIO) announced today they are expanding into the bauxite market, spending $1.9b on their South of Embley project in Queensland. RIO finished the day down 26c to $46.23.

Best Sector – Energy
Worst Sector – Utilities

Morning Report Thursday 26 November 2015

by james Carter

BHP is rapidly becoming a big stone in investors’ shoes!Good morning everyoneOverviewToday we take a look at BHP more closely.Market Matter put an aggressive sell on BHP when it was trading close to $35; now over 40% lower Australia’s most inherited asset has clearly hurt many people’s overall wealth – see chart 1.However, Market Matters also put an aggressive buy on the stock ~$21.50 and this is feeling extremely uncomfortable.With the China driven commodities “Super cycle” behind us, a strong $US pressuring the prices of resources and a major tragedy in Brazil it was feeling like all the bad news was in the market, but the BHP share price continues to decline! From a contrarian perspective it’s even been heartening to read that institutional brokers are not even trying to peddle BHP at present!Interestingly, unlike Glencore that really a proxy for the copper price, for BHP, the strongest influencing commodity is oil and it is this that sets BHP apart from other ‘miners’. Perhaps this is why BHP is suffering more than the likes of Rio Tinto which has no oil business at all.Theoretically, the stock is yielding 8.65% fully franked which is a great way to illustrate that the market’s not optimistic about its earnings going forward.Overnight, both Iron Ore and Crude Oil were marginally higher, there was no negative lead from US equities BUT BHP fell ~3% which is very concerning. A saying from one of world’s prominent traders in the Market Wizards book comes to mind this morning after seeing BHP’s weakness overseas.”When your position feels so bad you want to vomit, double up, place a close stop and walk away!” – Buzzy Schwarz.At Market Matters we have previously stated that we never advocate averaging unless it is part of the original plan but the second part, capital preservation, is vital to successful investing.Turning to the Market

Afternoon Report Thursday 26 November 2015

by james Carter

  • A busy day was experienced on November Equity Options Expiry, where the ASX 200 drifted to close mildly higher, up 17 points to 5,210 after the benchmark traded as high as 5,253 earlier in the day.
  • BHP Billiton (BHP) had a rough day losing 3.7% to $18.94, following the selling seen in the London and the US markets and after the September Capital Expenditure in the Mining Sector fell more than expected.
  • The strengths were seen in CSL, ending 1.6% higher to $99.00, after touching a high of $100.04 and Commonwealth Bank (CBA), up 1.5% to $80.22.
  • Santos (STO) disappointed today by 3.4% to $4.03, despite oil currently trading 0.4% higher at present.
  • However, Slater & Gordon (SGH) continues to slump, down 51.4% to 94c.

Best Sector – Health Care
Worst Sector – Materials

Morning Report Wednesday 25 November 2015

by james Carter

Equities are looking solid as we enter the historically very strong seasonal period between the end of November and start of January. However after a strong 300 point rally over recent days finding decent risk / reward opportunities is clearly becoming tougher. Also, it should be remembered that Market Matters have been calling a top for US stocks in Q1 of 2016 so positions taken now are likely to be shorter term in nature.Below we have looked at three opportunities where we like both the stocks and trading risk / reward:

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