Markets vulnerable before US election
What Mattered Today
The market opened down this morning, tried to recover between 11 &12 before selling off fairly hard into the afternoon. A late recovery from the 3pm low helped slightly but it was a still pretty average day non-the-less. Weaker than expected building approvals data at 11.30am prompted a decent selloff in the Aussie Dollar while the US FUTURES also tracked lower throughout our session.
Aussie Dollar Today – Building Approvals out at 11.30am were weak
Trump’s resurgence in recent polls has clearly got people scared – and in that environment we see selling first and questions come later. The other clear issue is obviously a lack of buyers, which is understandable. Even though the polls are saying it’s a close race, if we look at the bookies then they still reckon Hillary is a reasonably safe bet as do sites that track the likely outcome in the various States – and they’re saying that Hillary is still a 75% chance BUT, Brexit is fresh in investor minds and the bookies got that one horribly wrong – why would you trust them again?
If Trump wins they’ll be a decent sell off but it probably won’t be a sustained one – more a short sharp reaction followed by realisation that his policies would actually be stimulatory. Anyway, it’s a scary thought, but then again, Hillary is too.
The vote happens on the 8th November so another week of volatility seems likely, however if you look at the post-election stats on the market – as we will do in future morning notes, we usually get a relief rally – to varying degrees depending on the outcome. So, if the market continues to whacked this week we’re likely to step up and spend some of the 21% cash we currently hold.
On the market today, we had a range of +/- 75 points, a high of 5282, a low of 5207 and a close of 5229, off -61pts or -1.16%. Volume was OK – $5.04b after a quiet session yesterday.
ASX 200 Intra-Day Chart
ASX 200 daily chart – we turned neutral / bearish on the break below 5350 – raised some cash
CSR was a bright spot in an otherwise gloomy session after they said earnings would come in at the top of their previously guided range or A$154m to A$184m. It’s a decent upgrade to market expectations + CSR was cheap relative to peers this prompted a decent re-rating of the stock today. Most were negative CSR, it’s under owned, on cheap and is growing earnings at a 12% clip.
CSR Daily Chart
Sectors
ASX 200 Movers
Select Economic Data - Stuff that really Matters in Green
What Matters Overseas
FUTURES lower which hit our market today….
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 2/11/2016 5.25PM
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