Australian Investment Blog

Are the 13-year Low Commodities Close to the Bottom? Disappointing manufacturing data of China last week was the catalyst for accelerated selling in equities last week, what will this week bring? The CRB Index (Commodities Index) reached levels not seen since 2002, with oil amazingly experiencing its longest run of weekly falls in almost 30 years - see charts 1 & 2. With no fresh news since the "Weekend Report", we thought today was an ideal time to focus closely on our aggressive trading idea of buying Santos (STO) and secondly, to look closer at our view for the US stock market over coming months. 1 Santos reported last week:

• The Company acknowledged the need for change by axing Chief Executive David Knox.• The Company’s 88% drop in share price was in line with expectations courtesy of collapsing energy prices - see charts 2b and 2c.• STO is likely to sell assets to pay down debt which could at any stage give its smashed share price a boost.• STO is paying a 15c fully franked dividend on Wednesday.• Market Matters believes both oil and Santos are very close to an inflexion point which represents excellent BUT aggressive buying.