Market Matters Afternoon Report Thursday 30th June 2016

Afternoon Report 30/06/2016

Market Matters Afternoon Report Thursday 30th June 2016

Good Afternoon everyone

Market Data

What Mattered Today

A good session today to end what’s been another fairly volatile and overall weak financial year for stocks globally. A range of +/-91pts. 5156 low, 5247 high and a close at 5233; up +91pts or +1.77%...

Looking at overall performance + volatility of global stocks and commodities in FY15/16 (Obviously US/European mkts still have tonight to trade) tells a pretty interesting story. Volatility has been particularly high as markets approach the end of the stimulus driven post-GFC rally.

Early in July 15, optimism that earnings growth was becoming sustainable (and self-fulfilling) saw stocks well bid – led by the U.S, however, growth jitters from China brought global markets back to earth in February 17. This also prompted a huge sell off in the price of Crude Oil which is down 27% over the 12 months – however had a large range of +41%. Interestingly, the Chinese market also saw a range similar to that of Oil.

More recently, the BREXIT caused a BIG drop in stocks, yet, by the look of it, we’re now putting this behind us.

Financial Year performance, trading range, and percentage from all time high

Clearly, the U.S has the been the standout once again, not only due to its relative performance (down -0.34%) with one session to trade, but also because of its more subdued trading range of around 15%. As Market Matters have highlighted often, the U.S is now only around 3% below it’s all time high which we think will be taken out sooner rather than later. In comparison, the ASX 200 is still 23% below our all time high of 6851 – which seems a long way away. Our market is down -5.11% for the year.

GOLD is the only market to end the FY in the black, putting on +12.84%. Gold miners have run a lot harder than that with Newcrest (NCM) up +75%, Regis Resources (RRL) up +209.5% and Northern Star (NST) up +112.02%. Huge rallies and massive outperformance of the underlying Gold price.

For all the talk of a massive glut of Iron Ore through existing expansions and new developments such as Gina Rinehart’s Roy Hill combined with a slow-down in Chinese steel production, the overall performance has actually been OK relative to other base metals. A very big range (+/-50%) however down -8.51% in aggregate is probably seen as a win. Of course the biggest winner in this scenario has been Fortescue Metals (FMG) which is up +81% this financial year compared to BHP which is off -30% and RIO which is down -14%. Most will tell you that Fortescue is the higher risk play!

All in all, a tough, frustratingly volatile financial year where stock picking, being active and having clear and concise views has certainly been important. We expect this theme to continue.

Sectors Today

Source; Bloomberg

ASX 200 Movers

What Matters Overseas

Global FUTURES mixed this evening leading into the end of FY – which is usually a positive session.

Regards,
The Market Matters Team
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 30/06/2016. 5:00PM.

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