21 September 20
Banks take ASX to 12 weeks low (HVN, DXS)
21 September 20
Banks take ASX to 12 weeks low (HVN, DXS)
21 September 20
Subscribers questions (WSA, MNY, DEG, JHG, TLS, SSM, CSR, WZR, MYS, Z1P, CLW)
20 September 20
Market Matters Weekend Report 20th September 2020
18 September 20
ASX closes little changed
18 September 20
Is now the time to snap up tech stocks? (FMG, APT, AAPL US, ALU, MP1, WTC)
17 September 20
ASX rolls over
17 September 20
MM’s favourite 3 from Macquarie’s recovery picks (SNOW US, SGR, APX, RHC)
16 September 20
Tech rally encourages equities higher (KGN, SEK, CCP)
16 September 20
Income Note: MM’s current thoughts on our income securities (AMPPB, WBCPI, MXT, XARO, NBI, LQD US, HYG US, CBA)
16 September 20
Overseas Wednesday – International Equities & Global Macro Portfolio (TAH, GOOGL US, BHP LN, QQQ US, ETPMAG)
The ASX200 plunged over 2% yesterday leaving a number of bulls in the office questioning their optimism, pretty understandable when 93% of the index closed down on the day. One thing that caught my eye was the short-term traders appearing to abandon the COVID recovery story with stocks like Corporate Travel (CTD) and Flight Centre (FLT) enduring tough sessions although the sea of red was pretty unforgiving across the board. The local market remains within its 3-month old trading band as investors continue to switch between stocks and sectors, the so called “hot money” is having all the fun at present, or not depending if they’re getting it right.
So far into yesterday’s low we’ve fallen over -5.6%, I was a little disappointed / surprised we couldn’t bounce as US futures recovered almost 2% during our time zone but the sentiment reminded me of Tuesday where it felt like people remained non-believers that the US tech space was going to recover anytime soon. Remember we pointed out earlier in the week that the vast majority of the massive US bullish option bets were 2-weeks in duration hence making us believe stocks and the tech space in particular was just experiencing a short-term washout which may flow into next week.
Overnight US stocks have bounced back fairly aggressively, although a late sell-off did dampen the session, the Dow closed up 439-points while the NASDAQ soared almost 3%, not surprisingly the ASX is poised to reclaim most of yesterday’s losses and rally back towards its comfort level ~6000 feels a strong possibility. Outside of the IT Sector the best performing group in the US were the materials which bodes well for our index today e.g. BHP closed up 50c in the US.
MM remains bullish the ASX200 medium-term.
ASX200 Index Chart
Equities are undoubtedly carrying some major risks at present and we thought after the recent volatility it was worth highlighting our 3 main economic concerns:
1 – The global pandemic continues to rage on through developing countries while secondary waves roll through the likes of Europe and of course Victoria. Until a vaccine is discovered and made readily available the economic impact on the world will remain huge and therein lies the problem, nobody truly knows where / or what the coronavirus endpoint is and hence where the economy will be in a few years’ time – this is a science issue, not one fund managers are familiar with modelling.
2 – The US election in November will significantly change the investment landscape if the Democrats (Joe Biden) can win both the Upper House and the Senate. At this stage he has a small lead over Donald Trump in the run for the White House but the Senate looks more likely to remain Republican with the favourite scenario at the bookies being Joe Biden President, Democrat Congress but a Republican Senate If the Democrats can win all 3 then I believe stocks will be in for a really tough ride.
3 - Ongoing economic tensions between China & the US remains firmly in the background but nothings improving, most of us are just focused elsewhere.
MM believes moving forward stocks will experience a number of spikes in volatility similar to the last week.
Global Cases of COVID-19 Chart
One US stock that we like at current levels is Spotify (SPOT US) which currently boasts an impressive ~138m paid subscribers and when we include the number of free accounts, monthly active users are around 300m – pretty staggering numbers. In Australia alone there are 8m Australian subscribers of the music streaming service – that’s close to 10% of all homes. Music has evolved considerably from vinyl and then CD’s, another great example of “out with the old and in with the new” which investors ignore at their peril. In the tech space the concept that the winner takes all is an important, and Spotify is clearly in the box seat in terms of music.
MM is bullish Spotify at current levels.
Spotify Technology (SPOT US) Chart
Overseas Indices & markets
Overnight US stocks regained some of their recent losses but the chart below illustrates its not been much more than a small bounce for the tech stocks, my feeling is we might see more downside into next week before stocks can really get a springboard to rally into October – remember September is traditionally a rocky time for stocks.
MM remains bullish US stocks medium-term.
US NASDAQ Index Chart
Following its explosive rally post August’s stock split Apple In (AAPL US) has led the recent tech plunge correcting almost 20% over the 2-weeks, it’s not surprising that some tech bulls ran for the hills. When we stand back and look at AAPL it simply corrected a very similar degree as earlier in the year albeit faster in nature. At this stage we see no reason not to anticipate calm returning to this excellent company and an assault on the $US140-150 area unfolding over the remainder of 2020.
MM remains bullish Apple.
Apple Inc (AAPL US) Chart
Bond yields / interest rates are a major determining factor in the valuation of equities and as can be seen below US yields are at the same level as in late March giving us no obvious clues to the future uncertain economic backdrop. When things do become clearer on the virus front it’s likely to see a decent lift in yields which we believe will see value stocks such as banks and resources take the baton of performance from the tech sector but without this fundamental backdrop it still feels like a lot of noise, second guessing by investors as to where’s the best place for their hard earned money.
MM is bullish bond yields medium / long-term.
US 10-year Bond Yield Chart
Three stocks on our radar as tech falls.
Recently MM has been flagging a likely “rest” by the tech stocks, we certainly used the wrong verb but at this point in time things continue to unfold as we expected. We have enough tech exposure at MM considering we feel their phenomenal bull market is maturing fast, especially on a comparative performance basis. Hence today I’ve looked for / at 3 stocks who may have been caught up in the tech downdraft but we believe are the better areas to be buying for the medium-term.
The NASDAQ is experiencing a breather, but MM remains bullish.
NASDAQ Index Chart
1 Sims Ltd (SGM) $8.19
Metal recycling business SGM has endured a really tough few years but we believe it’s become a perfect vehicle for fund managers who are reviewing the underperforming pockets of the market – its been enjoying some solid days of late and we can see a rally towards $10 in 2020. Also, for good measure the stock resides in the value group which we believe will outperform this year – ideally stops would be placed ~$7.20 which delivers good risk / reward.
MM is bullish SGM initially looking for 20-30% upside.
Sims Ltd (SGM) Chart
2 Vocus (VOC) $3.49
We are already long VOC at MM in our Growth Portfolio but it caught my attention again this morning, we are not looking to add to the position but the telco is currently doing everything we would hope for and an aggressive move towards $4 and potentially beyond is feeling an increasing possibility.
MM remains bullish VOC.
Vocus (VOC) Chart
3 Incitec Pivot (IPL) $2.11
There are by definition only a finite number of stocks in the Australian market and like VOC, Incitec Pivot (IPL) is a stock we’ve liked of late although its not currently in any of our portfolios - IPL is forecast to pay an estimated dividend moving forward above 3% making it an unusual candidate for our Income Portfolio.
The explosives, chemicals and fertiliser business is down over -20% over the last 6-months, failing to regain most of its March sell-off in the process. The company reported a strong trading update in August sending the stock up +15% in the week. As we discussed in our Resources Roundtable miners are likely to spend more in the coming year after a relatively benign period in terms of capex – this trend should help demand for industrial explosives.
We feel this is a strong candidate for a 20% rally with a stop only 7% lower, excellent risk reward in anyone’s books.
MM likes IPL with stops under $1.95.
Incitec Pivot (IPL) Chart
Interestingly the 3 stocks we looked at today have actually consolidated more than fallen with the tech snap back but this has actually reinforced our positive stance on them.
We like the 3 stocks we looked at today in no particular order, unusually they all look & feel good.
Have a great day!
James & the Market Matters Team
Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday, or after the session when positions are traded.
All figures contained from sources believed to be accurate. All prices stated are based on the last close price at the time of writing unless otherwise noted. Market Matters does not make any representation of warranty as to the accuracy of the figures or prices and disclaims any liability resulting from any inaccuracy.
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 Market Matters 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. Market Matters may publish content sourced from external content providers.
If you rely on a Report, you do so at your own risk. Past performance is not an indication of future performance. 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.
Financial Services Guide
Date prepared: Wednesday, 22 November 2017
Last update: Friday, 25th October 2019
About this Financial Services Guide (FSG)
This FSG provides you with key information about a range of subscription services offered by:
Marketmatters Pty Ltd (Market Matters) Australian Financial Services Licence No. 488798 ABN (20 137 462 536)
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
T: 1300 301 868
E: [email protected]
In this FSG, “we”, us” and “our” refer to Market Matters.
Market Matters holds Australian Financial Services Licence No. 488798 (AFSL) and is responsible for any financial services that we provide to you.
This AFSL was issued on 8th September 2016.
The purpose of this FSG is to provide you with information about:
Market Matters operates a website, www.marketmatters.com.au (Website), where customers may, for the payment of a subscription fee, access certain financial information and general advice. In particular, the Website provides:
This FSG relates only to the Website Services.
What financial services we can offer in connection with the Website Services
As holder of AFSL number 488798, in connection with the Website Services we are authorised to provide general financial product advice to both retail and wholesale clients in relation to the following financial products:
The Website Services are comprised of general advice only. That is, none of the advice given on the Website or by provision of the Website Services takes into account any of your objectives, financial situation or needs (Your Personal Circumstances). Before acting on any of the information, advice or Website Services, you must consider the appropriateness of this information in light of Your Personal Circumstances and, if necessary, consult a financial adviser before making any investment decision.
If you are seeking to acquire a specific financial product or security, you should obtain a copy of and consider the Product Disclosure Statement or Prospectus for that product before making any investment decision.
The Website does not provide a trading platform or access to a trading platform. There is no ability to purchase or sell financial products through the Website.
How do I access these services?
You can access these services by going to www.marketmatters.com.au and following the prompts and steps required to sign up for membership. Please read all terms and conditions carefully.
Fees and benefits payable to us and our associates
The Website is a subscription-based service. A yearly fixed subscription fee is payable to Market Matters when you subscribe to the Website which will vary depending on the type of subscription for which you subscribe. At the date of this FSG, the yearly subscription fees are as follows:
Platinum: $1,238 for 12 months
Platinum: $1,993 for 24 months
Subscription fees vary from time to time and are provided on the Website.
The Website does not currently feature third party advertising. Market Matters reserve the right to advertise at a future time for which they may receive remuneration. Any such advertising will be independent of any other content on the Website.
All representatives of Market Matters (Market Matters Staff) receive a salary paid by Market Matters. Market Matters Staff may also receive performance-based bonuses which are based on profitability, the number of subscribers and subscription renewal rates.
Where we refer you to a third party financial services provider, we may receive a referral payment. This referral payment may be a percentage of the fee’s charged by the financial services provider between 0% and 25%, or a fixed amount. These referral payments are made by the financial services provider to Market Matters and are not an additional cost to you.
How do we manage potential conflicts of interest?
Market Matters have implemented policies and procedures to mitigate the risk of conflicts of interest. These include:
Market Matters Staff and Contributors are encouraged to express independent views and opinions on the topics they write about. This is established through ongoing training, external audits and our conflict of interest and staff trading policies. Market Matters Staff are required to serve the best interests of the subscribers, without consideration of any commercial or personal interests.
How is my personal information dealt with?
If you have a complaint about our services, you should take the following steps:
Contact us and discuss the complaint directly. If you do not feel comfortable discussing the complaint with us or your complaint is not satisfactorily resolved within 2 business days, please telephone Market Matters, on 1300 301 868 and ask to speak with the Complaints Officer. We suggest you put your complaint in writing at this time so that the issues are fully documented and understood by the parties. Your complaint should be addressed to:
The Complaints Officer
Level 29, Chifley Tower,
2 Chifley Square Sydney NSW 2000
Market Matters will review your complaint within 45 days and attempt resolution. If you are still not satisfied with the outcome, you may take your complaint to an external dispute resolution scheme. Market Matters is a member of the scheme operated by the Financial Ombudsman Service. You should write to:Australian Financial Complaints Authority Limited (AFCA)
You may also wish to consult ASIC in relation to your complaint. ASIC’s website contains information on complaining about companies and people and describes the types of complaints handled by ASIC. You can contact ASIC on its free call infoline:
Tel: 1300 300 630 or email [email protected]
We maintain professional indemnity insurance to cover our employees and Authorised Representatives (including us) for the financial services they provide, having regard to the following:
If you require further information about these compensation arrangements please contact us.
Terms and Conditions
This website, www.marketmatters.com.au, is published by Marketmatters Pty Limited (ABN 20 137 462 536) ('Market Matters', 'MM', 'us', 'we', 'our') Australian Financial Services Licence 488798
Financial Services Guide
Market Matters Financial Services Guide (FSG) is located here, and contains important information about the financial services provided by Market Matters. You must read our FSG and consider it in the context of your Personal Circumstances before acting on any advice. By accepting the terms and conditions you are acknowledging that you have read the FSG.
Provision of the Reports
Reports and other documents published on the Market Matter’s website (‘Reports’) are authored by Market Matters. The Reports represent the views of Market Matters 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 distribution 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.
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.
Past performance is not a reliable indicator of future results. Brokerage costs have not been included in the calculation of performance. As financial products rise and fall in value, returns may be negative. Performance figures are not intended to be a forecast. Market Matters does not guarantee the performance of or returns on any investment.
Employees and/or associates of Market Matters may hold one or more of the stocks reviewed on this website.
Subscriptions and Subscription Prices
To access premium content available on the Market Matters website you may initially subscribe through the complimentary trial which provides you full access to all services for the trial period. You are limited to two trials after which you must subscribe to one or more membership categories available on the website or direct with Market Matters before you can trial the service again, three months after the expiry of your second trial.
To subscribe to Market Matters services and access to the website you may go to the Memberships page of the website, provide the information marked as ‘Mandatory’ and select the payment option for the price quoted (at the time of your transaction) or contact the team directly at Market Matters by phone or email. You will then receive a verification email from Market Matters indicating that your subscription and payment have been accepted and you will be able to access the premium content.
Prices published on the Market Matters website are quoted in Australian Dollars (AUD) and are inclusive of GST and/or all other duties and taxes. Market Matters has used reasonable endeavours to ensure that prices for subscription to its services are published accurately on the website but these prices are subject to change and Market Matters reserves the right to change these prices and will notify you of any increase by email (with the price increase to apply from the time the next payment is due).
Marketmatters Pty Ltd (ABN 20 137 462 536) will issue a tax invoice to paying subscribers in relation to any supply that is subject to GST in accordance with A New Tax System (Goods and Services Tax) Act 1999.
Any member is entitled to cancel their membership at any time. In the event a member does wish to cancel their subscription, cancellations must be notified in writing to:
Level 29, Chifley Tower, 2 Chifley Square, Sydney NSW 2000
or by email to: [email protected]
All cancellations of month-by-month subscriptions will be cancelled and not billed again the following month.
All cancellations within 14 days we be entitled to a full refund. Any introductory gifts, such as, but not limited to; iPads, Fitbit watches, Apple watches, Google Homes, must be returned in their original condition before a refund will be made.
All cancellations made after 14 days of subscription commencement will not be entitled to a refund unless in the event of extenuating circumstances, at the sole discretion of Market Matters.
Subscriptions will automatically renew on the expiry date of current subscription. In these instances the subscription will be renewed at the current rate published on the Market Matters web site, using the same credit card that paid for the initial subscription, unless otherwise requested by the subscriber. A subscriber who wishes to cancel after being renewed in this way will have a “14 day cooling off period” in which they can request to discontinue and will receive a full refund for the renewal payment, this can be done in writing to:
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
or by email to: [email protected]
Market Matters has not reviewed any of the websites which link to this website or to which this website links. Market Matters is not responsible for the content of any other website or pages linked to or linking to its website. Following links to any other websites or pages shall be at the user’s own risk.
Copyright © 2018 Marketmatters Pty Ltd (ABN 20 137 462 536). No part of this website, or its content, may be reproduced in any form without the prior consent of Market Matters.
This Agreement is governed by and is to be construed in accordance with the laws of New South Wales, Australia. You agree to the non-exclusive jurisdiction of the courts of New South Wales, Australia in respect of any proceedings concerning this Agreement. This website is not available to US and/or EU persons and by accepting these terms you confirm that you are not a US and/or EU person.