Market Matters Afternoon Report Tuesday 14th June 2016

Afternoon Report 14/06/2016

Market Matters Afternoon Report Tuesday 14th June 2016

Good Afternoon everyone

Market Data

What Mattered Today

A pretty torrid day for local stocks with the market trading well in the red for most of it. A range of +/-94pts. 5197 low, 5291 high and a close at 5203; off -109pts or -2.06%.

As discussed in the weekend report and again this morning, volatility has spiked courtesy of the UK referendum as the potential for a BREXIT builds while nearer term, the FOMC meeting in the U.S which wraps up Thursday morning our time continues to be a source of nervousness.

When sellers get hold and fear sets in, markets can often get irrational. Technically, we highlighted 5200 as the first obvious level for the ASX 200 and we hit that today. Ideally, we’d be looking for some type of panic low before allocating capital to the market. As it stands, the Market Matters portfolio is 35% cash.

There was a few BIG stock moves today which knocked the index around – the usual suspects but a few less likely candidates. BHP took 6pts off the index by dropping -3.19%, CBA lost -2.61% to take 11pts off the index while CSL was sold hard today – closing down -3.25% and taking 5.65 index points from the broader market. Healthcare generally was pretty weak which in a ‘risk off’ environment normally doesn’t happen. Healthcare is seen as defensive and often benefits in a weak market. Not today.

We took profits on Healthscope (HSO) recently…

Mesoblast (MSB); dropped -42% on news that their partner, Teva Industries had pulled the pin on a late stage trial for MSB’s stem cell therapy in heart failure. The stock had been in a halt since the start of the month – and negative news was expected however that’s a big development for the company.

A small silver lining is obviously that MSB now has full rights to the treatment however that comes with a very onerous funding obligation. In the announcement the company did say they’d secured an ‘Equity finance facility’ which seems positive on paper, however the term ‘paper’ is probably the key. In simple terms it most likely means the company will continually issue new shares, on unfavourable terms to existing shareholders, and the dilution will be massive – and a significant headwind for the share price. We’ve seen it before. The $10 price of late 2011 seems a long way from todays close of $1.11. MM has no interest in this stock

SectorsToday

Source; Bloomberg

ASX 200 Movers

What Matters Overseas

The FOMC meeting kicks off tonight with the press conference Thursday morning our time. Concerns of a BREXIT are building, yet the bookies are pricing a 36% chance of it actually playing out.

Global FUTURES Markets as @ 4.58pm

Source; CNBC

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 14/06/2016. 5:00PM.

Reports and other documents published on this website and email (‘Reports’) are authored by Market Matters and the reports represent the views of Market Matters. The MarketMatters Report is based on technical analysis of companies, commodities and the market in general. Technical analysis focuses on interpreting charts and other data to determine what the market sentiment about a particular financial product is, or will be. Unlike fundamental analysis, it does not involve a detailed review of the company’s financial position.

The Reports contain general, as opposed to personal, advice. That means they are prepared for multiple distributions without consideration of your investment objectives, financial situation and needs (‘Personal Circumstances’). Accordingly, any advice given is not a recommendation that a particular course of action is suitable for you and the advice is therefore not to be acted on as investment advice. You must assess whether or not any advice is appropriate for your Personal Circumstances before making any investment decisions. You can either make this assessment yourself, or if you require a personal recommendation, you can seek the assistance of a financial advisor. Market Matters or its author(s) accepts no responsibility for any losses or damages resulting from decisions made from or because of information within this publication. Investing and trading in financial products are always risky, so you should do your own research before buying or selling a financial product.

The Reports are published by Market Matters in good faith based on the facts known to it at the time of their preparation and do not purport to contain all relevant information with respect to the financial products to which they relate. Although the Reports are based on information obtained from sources believed to be reliable, Market Matters does not make any representation or warranty that they are accurate, complete or up to date and Market Matters accepts no obligation to correct or update the information or opinions in the Reports.

If you rely on a Report, you do so at your own risk. Any projections are estimates only and may not be realised in the future. Except to the extent that liability under any law cannot be excluded, Market Matters disclaims liability for all loss or damage arising as a result of any opinion, advice, recommendation, representation or information expressly or impliedly published in or in relation to this report notwithstanding any error or omission including negligence.

To unsubscribe. Click Here