Australian Investment Blog

Good Afternoon everyone

Market Data

What Mattered Today

As expected, resources came off the boil today with BHP & RIO off around 3% a piece while Fortescue (FMG) tracked back around 6%. Pretty clear that profit taking is rife in the sector as it should be after a v’strong run up in price….We suggested to take profits in the sector at the back end of last week and although we remain upbeat resources overall for 2016, it’s still an area to be active in – and take profits when optimism is high

Iron Ore has run up short term following strong manufacturing data from China + a weaker USD + weaker quarterly Iron Ore production figures coming from major producers in the last few weeks. The obvious Q we should ask ourselves is whether or not the conditions that have supported the run in prices will continue into H2….we think not.

On the supply side all of the iron ore production weakness in H1 (RIO, BHP, Vale, Kumba etc) is likely to be reversed with interest in the second half. Chinese manufacturing activity will not rebound strongly as this is not government policy. Make hay while the sun shines remains our key call…however, look for opportunities into any deeper correction.

Following on from our morning note today, we think better risk/reward currently resides in the banks and from a shorter term perspective, look for opportunities there…Westpac (WBC) as example given it reports May 2 and goes Ex-Dividend on the 12th….

Newcrest (NCM) was out with March Quarter production numbers today, which were decent. Importantly, Cadia - the key production asset for NCM, achieved 58% Q/Q production growth as milling issues were fixed + at Lihir costs were steady which has been an issue for the coy in recent times. All in sustaining costs were down -4% to US$723/oz and they maintained production guidance which is good.

All going well for NCM however the stock is up a lot – around +37% YTD so would need to correct before it gets appealing again. Current $17.72 – down -1.01% on the session

Bellamy’s (BAL) was down -2.06% today @ $9.98 on no news and low volume. We own BAL in the portfolio with a reasonably low 5% weighting for now. If the stock continues to track lower and trades towards $9.60 we will look to increase our weighting by adding more shares. Overall, we remain comfortable with the story, the reasons we have purchased are unchanged, and from a technical perspective, recent selling has been on low volume. We deliberately bought a reasonably small parcel (5% weighting) so we could give the stock some room to work though its current issues…We remain positive.



Stocks & Sectors Today
Source; Bloomberg


ASX 200 Movers


***What Matters Tonight***

European leads are reasonable with the FUTURES on the FTSE +23, DAX +42 & CAC +20. In the US, DOW FUTURES are up +8, S&P 500 FUTURES are +1

US Earnings were lacklustre last week and we’ve got some big names coming up this week.

Tonight – Apple / 3M / AT&T / Baxter / eBay / Fiat Chrysler / P&G / Twitter
Wednesday – Boeing / Comcast / Resmed
Thursday – Amazon / Dow Chem / Ford / UPS / Viacom
Friday – Chevron / Exxon

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 26/04/2016. 5:15PM.
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