James Gerrish & Peter O’Connor discuss opportunities in the resource space (BHP, RIO, AWC, IGO, OZL)
Yesterday the ASX200 enjoyed another impressive rally with some large individual stock moves, mainly on the upside and most were from the beaten down ‘dogs’ as fund managers search for value in a market that has punched through 5900 and put on a quick 200 points to close at 6098. We suggested yesterday that the market may be due for some consolidation / a cooling off period and given the parabolic nature of the last few days we still hold that view. Interestingly the market now sits just 2.5% below it’s 10 year high, a level which we think will be broken, the only variable is when.
- Market Matters remains bullish the ASX200, initially targeting the 6250 area, or ~2.5% higher
ASX 200 Chart
Overnight US stocks were mixed although resource companies were largely higher, our Futures market indicating a rise of 16 points on open this morning.
S&P 500 Chart
Yesterday I sat down with Peter O’Connor, our Resource Analyst at Shaw and Partners. According to Bloomberg rankings, Peter is the No 1 rated analyst for BHP, RIO, Alumina (AWC) and Independence (IGO) – so his views clearly hold weight. I speak with Peter almost daily on the rumblings in the resource space and I do draw from his depth of knowledge. At Market Matters we remain bullish the resources sector, however we remain active in that area of the market, but with an overall positive bias. We recently look profits in some of our holdings on the expectation that a rising US currency may apply some short term pressure on the sector, however when opportunities present themselves we’ll certainly take them, just as we did with Independence Group (IGO) earlier in the week.
Click on the Video below to view – about a 10minute video
Overnight Market Matters Wrap
· The DOW fell close to 400 points intraday before recovering off key technical levels with all major US indices ending its session with little change. The first day of US-China trade talks were positive, however there are no real expectations of any breakthrough agreements.
· The RBA statement of monetary policy will be released today, while US nonfarm payrolls and unemployment data will be closely watched tonight.
· Most metals on the LME were slightly lower, as was iron ore, while Brent crude oil rose 0.5%.
· The June SPI Futures is indicating the ASX 200 to open 16 points higher towards the 6115 level this morning.
Have a great day!
James & the Market Matters 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 04/05/2018. 8.26AM
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