Author: james Carter
Well, a big positive night on US markets that will follow through to our market today. Flexibility and an open mind is paramount for successful investing / trading and this is one component we will focus on in our upcoming education courses. We had been looking for one final spike down in the US markets but didn’t get it although we did see it in our market. Our view last week was that our markets had bottomed thus our ‘buy the market’ trading alert on Friday, with any new low in the US a likely confirmation of a secondary buying opportunity.
- The ASX 200 had a quieter day, but managed to finish in the positive. The ASX 200 finishing the day up 17 points to 5,167. On its high the index was up 79 points
- The Resources was still the strongest sector today, with the usual suspects performing well; but well off their highs. BHP Billiton (BHP) finished up 38c to $23.88 and RIO Tinto (RIO) finished up 71c to $50.52. Alumina (AWC) had a better day on the back of expected better result from Alcoa on the 8th Oct in the U S. The stock closed up just 2c (2%) to $1.17. Fortescue Metals (FMG) jumped 11c (6%) to $1.98.
- Origin Energy (ORG) returned to the boards today after a trading halt late last week. The company reported it raised $1.35b from institutional investors. Ninety two percent of the shares on offer at $4.00 each in the raising were taken up and the rest were sold to new investors at $5.20 per share. There is another $1.2b to be raised in the retail offer. Shares were today up 4.2% to $5.56 and the rights were last at $1.57.
- The other major news was that the Reserve Bank of Australia (RBS) kept interest rates on hold at 2.0%
Best Sector – Materials
Worst Sector – Info. Technology
- Happy Labour Day Holiday in NSW, QLD, SA, and ACT. The market today decided to take the opportunity, whilst most were away, to jump out of the box and rally strongly. The index finished up 99 points (2.0%) to 5,151.
- Gold was a stand out today after the price jumped US$22.90 on Friday. Newcrest Mining (NCM) was up 9% to close at $$13.80 after a high of $14.08. Regis Resources (RRL) continued its upward trajectory, rising 8c (4.5%) to $1.85.
- The Materials Sector was by far the strongest today with BHP Billiton (BHP) up a whopping 4% to $23.50 and RIO Tinto (RIO) up 2.3% to $49.81. The sector also includes the gold stocks so it’s easy to see why!
- The banking sector was strong but it was the weakest of all the indices. Australia New Zealand Bank (ANZ) up 1.7% to $27.39. Commonwealth Bank (CBA) was up 1.3% to $74.36, Westpac (WBC) up 1.2% to $30.10 and National Australia Bank (NAB) 1.7% $30.60.
Best Sector – Materials
Worst Sector – Banking
The Australian market outperforms but what’s shining?
- The market today started weaker, rallied 70 points off its lows, to slowly step down from lunch time to finish the day disappointingly down 60 points to 5,038
- Origin Energy (ORG) was hit with a shortfall in its capital raising, with institutional investors, it was reported today. A large discount of 34% to its last trading price was not enough to get it over the line at $4.00, and 28 million shares were not taken up.
- The banking sector was one of the weakest sectors, with Australia New Zealand Bank (ANZ) down 2.2% to $26.93 and Westpac Bank (WBC) down also 2.1% to $29.75.
- The Utilities sector was the main culprit though, with AGL Energy (AGL) down 2.3% to $16.00 and APA Group (APA) down 2% today closing at $8.59.
- On a brighter note Shane Oliver from AMP Capital was quoted today as saying the market is cheap relative to Bonds and monetary conditions will remain easy. He also said he is expecting to see share markets higher as the cyclical bull market in shares resumes.
- Keep an eye open for our weekend report.
Best Sector – Consumer Disc.
Worst Sector – Utilities
Over the last few days we have focused very closely on markets repeating themselves in both time and price. The ASX200 perfectly fitted a repeating pattern of the overall corrective move when it broke out of its recent corrective trading range after exactly 25 days – see chart 1.
- Well, we’ve actually had two days up in succession, the first time since 18th Sept! Today was a strong performance with the banking sector one of the main contributors. The ASX 200 finished up 90 points (1.8%) to 5,112.
- Even though the Shanghai market is closed until next Thursday, there was a release of the Purchasing Managers sector (PMI) which came in marginally better at 49.8, consensus was for 49.7.
- This helped the market kick on, and we reached a high of 5,116 (95 points)
- Corporate news today was on Oz Minerals (OZL) where it was reported that private equity firm KKR has taken a 10%.
- The banks were strong with Westpac (WBC) up 2.3% to $30.39 and again Commonwealth Banks (CBA) again one of the strongest, up 2.1% to $74.27.
- Resources were in the mix but quiet, with RIO Tinto (RIO) up 2% to $49.58 and BHP Billiton (BHP) up also 2% to close at $22.68. Fortescue Metals (FMG) was disappointing, down 1.4% to $1.80.
Best Sector – Energy
Worst Sector – Info Technology
History repeats yet again!Good morningOverviewToday’s report is deliberately short to focus on the specific opportunities arising.Over recent weeks we highlighted the 25 days of consolidation which the ASX200 experienced after its initial 600 point decline looking for repetition of this 25 day move from the more recent 800 point decline.. and history has repeated itself to the day! – see charts 1 & 2.The ASX200 has again traded in a corrective sideways pattern for 25 days prior to breaking to fresh quarterly lows with a vengeance yesterday.Investors have withdrawn funds from emerging markets at the fastest rate since the middle of the GFC with the MSCI Emerging Markets stock index falling 20% over the last 3 months as outright panic has set in.Turning to the Markets
- What a difference a day makes. A nice rebound in the market today saw the ASX 200 finish + 103 points (2.0%) to 5,021.
- The complete opposite to yesterday of course in that the banks and resources were all in rebound
- BHP Billiton (BHP) finished up 2.8% to $22.22 and RIO Tinto (RIO) was up 4.8% to $48.60. Fortescue Metals excelled, up 9% to $1.82
- In the banking sector the stand out was Commonwealth Bank (CBA), which was up 3.7% to $72.72.
- On the corporate side, Origin Energy (ORG) is raising $2.5b through an entitlement offer. It further announced an additional $2.2b of “cash preservation” initiatives together with a slashing of the 2016/17 dividends. The stock was suspended pending resolution of the raising.
Best Sector – Banking
Worst Sector – Utilities
Are we heading for an early October low?Good morningOverviewAs has been mentioned previously, the ASX200 has been gaining strength even though, ironically, it is likely to open down 100 points this morning. Over the last 3 weeks the Dow has fallen 932 points (5.5%) from its intraday high yet the ASX200 over the same the period is down only 82 points (1.6%).The global equities’ markets are performing as Market Matters has been predicting with the likelihood of a very strong buying situation arising in the very near term. Buying into weakness at the right time is likely to provide strong, well risk-weighted returns.Today will be a test of the local market’s resilience! Glencore fell almost 30% last night as global resource stocks continue to be hammered with BHP’ US ADR’s indicating an open ~$21.80 (-5.8%).However, historically the stocks that create most of a market’s weakness usually bounce the hardest and for the ASX200 that is the banks which rallied strongly yesterday; and don’t forget, 3 of them go ex-dividend in coming weeks.Turning to the Markets
Really bullish, there's more to go in the reflation rally
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