Market peaks early & closes in the red – we sold BHP today (BHP)
Strength on open today following another positive session on Wall Street, however the optimism failed to hold, and the best of the day’s trade was seen early on. The banks came off their highs, ditto for the resources while we also saw some decent selling amongst the ‘yield plays’ following higher US Interest Rates overnight. Overall, the Materials stocks did best, while Telstra dragged on the Telco space – a range of +/- 33 points, a high of 5777, a low of 5744 and a close of 5744, off -2pts or 0.04%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
BHP Billiton (BHP) - We took the opportunity to sell our remaining 5% in BHP around $27.60 during the morning session locking in a nice +17% profit on the position. As we wrote in the Alert at the time, while we like the longer term thematic’ s underpinning BHP, with a changing focus of generating better returns from existing assets (as opposed to spending / blowing money) on new ones, we’re conscious of the vagaries of commodity prices. We think US interest rates go higher, dragging up the $US from the depths of despair which would likely cool the appetite for commodities in the short term. Remember, big pullback’s in this stock / sector are common place and we are using recent strength to take a healthy profit.
BHP Daily Chart
Interesting chart we put in the MM Income Report today…highlighting the re-rating of CBA in the last few months. Unlikely to last in our view despite the ongoing ASTRAC investigation.
Big 4 Bank Performance – CBA in White the big mover!
Have a great night
The Market Matters Team
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