Buyers step up before the day off (FMG, BHP, NAB, OZL)
WHAT MATTERED TODAY
The market once again edged higher today, closing above to critical 5900 level, which is key MM turning bullish on the local market short term, looking for an assault on the 2018 highs. It was the banks once again that lead the market higher, finding some support after the fears of the Royal Commission subside. We have spoken at length over the role that the banks will play in the MM view of a push to fresh new 2018 highs before a larger pull back takes place and this occurred once again today.
IFL was under a cloud early on, after rallying post the FUMAS update around midday – although finishing near yesterday’s close and a long way from its highs it was good to see the share price react positively after the update. FMG announced their quarterly activities report – more on that later. Boral disappointed markets with the sale of their property at Greystanes – adding $56mil to EBITDA for the year – and investors smashed stock down ~8%.
Overall, another nudge higher today, the index adding 35pts or 0.6%, closing at 5921.
ASX 200 Chart
ASX 200 Chart
CATCHING OUR EYE
Broker Moves; Minor changes from the brokers today – Fortescue not helped by Clarksons following a miss in the quarterly report.
- Acrow Formwork and Construction Services (ACF AU): Rated New Buy at Bell Potter
- Fortescue (FMG AU): Downgraded to Neutral at Clarksons Platou
- Netwealth Group (NWL AU): Rated New Buy at Bell Potter; PT A$8.06
- iSelect (ISU AU): Downgraded to Hold at Bell Potter; PT A$0.48
Income Portfolio; with the market up 1.37% over the past 5 days, the income portfolio has slightly lagged up ~0.5%. FMG was poor today after their March quarterly report that was release today. Production was down due to the poor weather over the quarter – this was expected – but costs were higher – should have been expected as while production falls costs won’t fall inline. What was positive was signs that the discount FMG receives for their lower grade ore is slowly eroding, and we may have seen the peak.
Fortescue metals (FMG) Chart
OUR CALLS
We sold OZL, reduced BHP and added to our NAB position in the Growth Portfolio today. We sold OZL in fear the tomorrow’s no trade day would see the US dollar spike higher and severely impact the copper price – feeling the risk reward was against us and the best option was to sell before the day off.
BHP Chart
NAB Chart
Have a great night – and enjoy a day off tomorrow.
Harry & the MM Team
Disclosure
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
Disclaimer
All figures contained from sources believed to be accurate. Market Matters does not make any representation of warranty as to the accuracy of the figures and disclaims any liability resulting from any inaccuracy. Prices as at 24/04/2018. 4.30PM
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