Market drifts lower – yield stocks weigh (TWE)
WHAT MATTERED TODAY
The market rolled over early this morning on some big volume through the futures market before ebbing and flowing throughout the session. A whimper up into the close but nothing to write home about, the market simply feels a little hot now and needs to some time to cool – sort of like property markets as discussed this morning but (hopefully) in a shorter time frame. Yield stocks came under pressure today – expected really given the rise in US interest rates overnight with the 10 years cracking above 3.11%. A trend we think will continue!
Overall, not a lot on the docket today with the market finishing down -12pts or -0.21% to close at 6094.
ASX 200 Chart
ASX 200 Chart
CATCHING OUR EYE
Broker Moves; ANZ is fast becoming the bank of choice after they reported well + showed a sector leading capital position. If you hold banks income, ANZ seems the prime candidate for better returns in the coming 12 months, although the share price has now moved in line with that view as discussed in the Income Report yesterday.
Brokers reasonably active…
- ANZ Bank (ANZ AU): Upgraded to Outperform at Credit Suisse; PT A$30
- Automotive Holdings (AHG AU): Upgraded to Buy at Morningstar
- Bapcor (BAP AU): Downgraded to Hold at Morningstar
- Crown Resorts (CWN AU): Cut to Neutral at JPMorgan; Price Target A$13.50
- Doray (DRM AU): Upgraded to Buy at Argonaut Securities; PT A$0.41
- IOOF Holdings (IFL AU): Downgraded to Hold at Morningstar
- Macquarie Atlas (MQA AU): Cut to Equal-weight at Morgan Stanley; PT A$6.36
- NAB (NAB AU): Downgraded to Neutral at Credit Suisse; PT A$29
- Sydney Airport (SYD AU): Cut to Equal- weight at Morgan Stanley; PT A$7.27
Treasury Wine Estates (TWE) $16.90 / -6.22%; soft today following some news flow this morning regarding inventory levels in China. China has been one of the biggest growth areas in wine globally, and TWE has targeted this market successfully – one of the many factors that underpinned the share price rally in recent times - shares went from sub $5 in 2015 to over $20 recently. A glut of supply suggests that wine is being imported faster that it can be drunk and imports will have to slow down, or stock sold at a discount. Although Treasury discredited this view in an announcement before the market opened, they did note that exports to China have been delayed by customs, which is not expected to be a long term issue.
Treasury Wine Estate (TWE) Chart
OUR CALLS
No changes to the MM Portfolio’s today
Have a great night
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 17/05/2018. 4.30PM
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