Market Matters Afternoon Report Thursday 26th May 2016

Afternoon Report 26/05/2016

Market Matters Afternoon Report Thursday 26th May 2016

Market Data

What Mattered Today
Another relatively quiet day for the Australian share market, especially considering it was May stock option expiry. After another strong night on Wall Street where the bulls were not prepared to push the ASX200 through the 5400 resistance, but the bears could not send the market under 5350, leading to a basic stalemate with the market closing up 15 points (+0.3%) at 5388. US equities are now only 2.1%, below their all-time high and look poised to crack the milestone in the short term. However, the poor old ASX200 remains over 11%, below last year's high and over 27%, below our all-time highs set in late 2007.

ASX200 Intraday Chart

The Energy Sector stood out today, rallying 1.9%, as Brent crude broke the $US50/barrel level, with our holding in Origin (ORG) performing well and closing up 2.7%. As mentioned in this morning's report, we are looking for over $6 from this position, before taking profit.

Unfortunately, of the two stand out stocks that struggled today, we have a decent exposure to one, Suncorp (SUN).The company announced a strategy to halt the 125,000 customers a month who are deserting the bank / insurance company. The market was obviously not convinced today, sending the stock 3.6% lower. We remain bullish the stock, but will be watching carefully after today's price action.

Suncorp (SUN) Monthly Chart

Also Wesfarmers (WES) followed through from yesterday’s underperformance, closing 3.6% lower. Fundamentally, we are concerned over both Coles and Woolworths’ future as ALDI looks likely to continue to grow its market share at their expense. Technically, WES looks fine, but this is a great example of Market Matters wanting both fundamental and technical analysis to align before we buy a stock.

Wesfarmers (WES) Weekly Chart

Stocks & Sectors Today

Source; Bloomberg

ASX 200 Movers

What Matters Tonight

UK GDP (1Q P)
UK Imports (1Q P)
UK Index of Services (Mar)
US Durable Goods Orders (Apr P)
US Durables Ex Transportation (Apr P)
US Fed's Bullard Speaks in Singapore
US Initial Jobless Claims

European leads are likely with little change with the FUTURES on the FTSE unch, DAX -14 & CAC unch
DOW FUTURES are up 45pts while the S&P 500 FUTURES are down 0.1%

Regards,

The Market Matters Team
Level 12 28-34 O'Connell St
Sydney, NSW 2000.

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 26/05/2016. 9:00AM.

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