Markets strong on light volume
A bank holiday in NSW ensured a day of light volumes with strength early in the resource companies offsetting some decent selling in CBA that traded as low as $80.00 shortly after the open. It looked like one big seller was clambering to get out, driven by the immense media pressure over the weekend from the AUSTRAC investigation. As we suggested last week, $81 is good support for the stock and it didn’t trade for long below that level – snapping back in short succession to close out the day at $81.52 – up +0.99%.
In terms of the potential financial hit (fine) for every $100m this equates to 4c per share – so $500m is 20c, or $1bn is 40cps. Since the news broke, the stock has dropped $3.97 – clearly a big reaction and an example of the markets ability to overcook specific events. We’ve got ‘full’ positions in CBA which in this instance hamstrung us, however as suggested on Friday, we’d normally be buyers of a situation like this.
Commonwealth Bank (CBA) Daily Chart
On the broader market today, the Material sector saw most strength while Utilities dragged, dropping -0.38% to be the only sector in the red - an overall range of +/- 61 points, a high of 5781, a low of 5720 and a close of 5773, up +53pts or +0.93%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Crown (CWN) reported on Friday and we saw a number of broker downgrades today which prompted a -4.27% drop in the stock to close at $11.87. The issues stem from a drop in VIP revenue in their existing casino’s and the mkt concerns that the new VIP facility in Sydney will simply create more exposure to that struggling end of the mkt - VIP volumes down 49% in FY17. The falls stem from a crackdown on marketing efforts targeting high rollers in China and now they also have a higher currency to content with. We have no interest at Crown at current levels.
Crown Daily Chart
Janus Henderson (JHG) – reports half year results tomorrow and this is a stock we’ve been in and out of in recent times (now out of). The stock traded up +1.59% today to close at $43.44 and it’s now looking bullish after a reasonable pullback. We’ll be keenly watching the result tomorrow.
Janus Henderson Daily Chart
Have a great night
The Market Matters Team
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