Author: james Carter
The market was sold off heavily today, following on from overnight leads and in line with regional markets, closing down -46 points. A lower than expected March retail sales print of +0.1% vs. +0.4% expected also added downward pressure.
With a fall in building approvals reported yesterday, is it time to start selling building stocks?Yesterday the Australian March Residential Building Approvals fell -3.5% month on month, however, it should be noted this is an easing from historical highs. Overall, these figures do not bother me; the level of dwelling approvals remains strong, pointing to a marked improvement in new dwelling investment, which is set to add around 0.4% to economic growth in 2014-15. More importantly, when we look at the main stocks in this sector they remain very strong and further consolidation / retracements are buying opportunities and not a time to panic sell.
A slow day in equity markets today with the ASX200 closing +14 points higher on low volumes as Japan, Hong Kong and South Korea were all closed today.
** Westpac (WBC) increases its 1H Cash earnings by 8% to $3.77B – broadly in line with estimates**
The ASX200 posted early gains, only to be sold off throughout the afternoon on weaker than expected building approvals and disappointing Chinese PMI data.
The ASX200 has fallen 116 points (-2.1%) since Wednesday, certainly not major, but considering that the Dow is up almost 200 points over the same timeframe it is certainly noticeable. The US Indices remain very strong with the Dow closing less than 100 points from all-time highs this morning; I am still 50-50 whether they push higher short term prior to a meaningful correction. However, returning to basics, the ASX200 valuations are at the top end of their historical range and artificially low interest rates will end soon, leaving the Australian share market vulnerable to a decent correction. I have moved to approximately 75% cash with the only core stock I currently hold being Suncorp (SUN). It was nice to see Suncorp up yesterday as the banks were sold hard. The ASX200 has rallied 923 points since the lows of last May so a 350 point retracement is not significant – see chart 1.
**ANZ 1H cash profit increases by 11% to $3.5B**Opportunities presenting as profit taking hits best performing stocks
The ASX200 was sold off for a third straight day, despite opening positively on offshore leads. The market fell 80 points from its intraday highs to close down -40 points. This trend of heavy selling following opening strength is often the start of a change in trend.
After yesterday’s 100 point intraday plunge has the ASX200 we topped?
The ASX200 again saw volatility today, trading in a 44pt range only to close +2 points.
Really bullish, there's more to go in the reflation rally
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