Patriots come back while market fades
What Mattered Today
A reasonably strong open this morning with some strength in the financial space offset by weakness in the resources, however from mid-morning onwards that trend seemed to change, with Financials trading back from their highs while resources were bid up from their lows. NAB gave a trading update this morning which was inline on the headline number but slightly weak in terms of quality. They earnt $1.6bn for the quarter which was pretty much in-line with market expectations, while costs were higher, bad debts were lower than expected and they say they trimmed 488 staff. When considering staff numbers and bad debt charge was low, the quality of the result seemed questionable to us. Anyway, the stock moved higher, but unconvincingly so to close up +0.76% to $30.62.
NAB Daily Chart
The Super Bowl – Patriots pull off the biggest come back in history to win in extra time. No team in history has won after trailing by more than 10pts…they trailed by 25
Source; New York Times
According to Betashares David Bassanese, todays win by the Patriots in the Super Bowl is a negative for the market and it seems to be supported by a flow of evidence. The Patriots have won 4 Super Bowls since 2000 and the market has subsequently been down 3 of the 4 years. Furthermore, according to broader ‘Super Bowl Indicator’ if a team from the American Football Conference (as the Patriots are) wins the Super Bowl, chances are high US stocks will drop that year, while a victory by the National Football Conference team is a positive for the US stock market.
Back to more important issues, we added to our existing Commonwealth Bank (CBA) holding today by +2.5%, taking our total holding to 8.5%. We remain positive on Financials and are looking to increase exposure to stocks that are paying dividends in the near future. CBA will report earnings on the 15th February and will trade ex-dividend a short time later. CBA recently traded up to a high of $85.65 before pulling back to a low of $81.12. This will decrease our cash position to 24.5%, which is still reasonably high.
Commonwealth Bank CBA) Daily Chart
Newcrest (NCM) had a good session breaking out of its recent range – closing up through $22.50 resistance to close at $22.93 – up 2.46% on the session. The $US has been weak in recent weeks which has been supportive of the Gold price, and thus NCM. We continue to view GOLD as a trading vehicle and will treat our position in NCM along similar lines.
Newcrest (NCM) Daily Chart
We had a range today of +/- 50 points, a high of 5659, a low of 5609 and a close of 5615, off -6pts or -0.11%.
ASX 200 Intra-Day Chart
ASX 200 Daily Chart
Sectors
ASX 200 Movers
What Matters Overseas
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Disclaimer
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 06/02/2017. 5.00PM.
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