Author: james Carter
2016, the year of big trend changes Looking back over 2015, one element that is clearer than ever is that the ‘set and forget’ investment approach simply does not work in this market. Shocking share price drops in ‘old favorites’ and ‘household names’ like Santos, BHP, Dick Smith Holdings and Slater & Gordon capitulated worse than what was seen in the GFC – this just goes to show that blindly buying and holding stocks in your portfolio is more likely to lose you money.
Please view our Market Matters video update 21st January 2015 – Newcrest Mining (NCM) & Gold and Correction?
The Danish raise rates, China stops margin loans, what’s next?
• It was a choppy session again today. The ASX 200 closed only 1 point lower at 5307 after trading as much as 29 points lower earlier.• The afternoon reversal in the market was due to the IMF downgrading its global growth forecast to 3.5% from 3.8% in October, turning investors to anticipate a rate cut sooner rather than later.• The dividend/yield play re-ignited, with the financial sector outperforming the broader market. ANZ closed 0.7% higher at $31.51, Macquarie Group (MQG) extending its strength, up 2.7% at $59.80 and Telstra (TLS) up 0.3% at $6.19. Please refer to our 2015 Outlook Report released today.• Woodside Petroleum (WPL) was the weakest link in the Energy sector and closed down 5.6% at $1.92. We remain on the sideline in this sector remember, cash is king at present!
2015 Outlook – Market Matters predicts more landmines and pots of gold
The Insurance sector has had a poor week, do we buy yet?
• Volatility remains as expected, with the ASX 200 starting the week off at a high this morning, up 96 points at one stage, only to fail and close 10 points higher at 5309.• The reason for today’s reversal was on China, with the Shanghai Composite Index currently trading as low as ~6.8% after regulators took action on margin trading in an attempt to curb the recent jump in stock prices with purchases via margin lending.• As mentioned to our Subscribers, we have taken profit in our long Newcrest (NCM) position. Although we see further upside in Gold, i.e. US$1,400/oz. the gold play is a trade, rather than a long term investment and we are happy in taking healthy profits and focus on the current market situation. This is particularly when you see the Chairman of Regis Resources (RRL) selling $10.3m of RRL last week. NCM closed unchanged at $12.97 after trading as high as $13.33 while RRL closed 2.9% lower at $2.04.• OZ Forex (OFX) slumped by -10.3% at $2.43 on the close, after Westpac decided to part ways with the foreign exchange (FX) business along with investors’ concerns over the recent shock in the FX market. OFX however, stated it has not been impacted by the removal of the Swiss-Franc Cap and that the currency represents less than 1% of transactions.• Macquarie Group (MQG) closed 5.4% higher at $58.25 and surged as high as 6.7% at $59.02 after updating its earnings forecast by 20%. Although we like MQG, we are cautious with the global markets.
The Swiss give up their minimum exchange rate, is this the end of Central Bank intervention?
• The selling continued in the ASX 200 today, ending 32 points lower at 5,299 after trading as low as 5267.• The weakness was stemmed from overseas global economic uncertainty, particularly after the Swiss central bank surprisingly removed the ceiling of its currency against the Euro.• Commonwealth Bank (CBA) remains to be the Alpha from the pack, closing 0.1% higher at $83.57 while ANZ closed 0.8% lower at $31.26. As anticipated, Macquarie Group (MQG) fell 1% at $55.29, underperforming the broader market as anticipated.• QBE Limited (QBE) fell 3.6% at $10.38 as investors begin to believe that the US will likely raise its interest rates later than expected.• The Healthcare sector was hit hard, as CSL loses 3.8% at $83.00 as investors weigh its exposure with the Swiss.• Please watch out for the Hickman Report tomorrow.
** Please see our Video Market Update 13th January 2015, Gold, Outlook Piece and Correction Update
Really bullish, there's more to go in the reflation rally
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