Afternoon Report / ASX 200 slumps -1.4% in a roller-coaster week

By Market Matters 14 December 18

ASX 200 slumps -1.4% in a roller-coaster week

Market Matters Afternoon Report 14th December 2018

WHAT MATTERED TODAY

The market rounded out the week the same way it started with a soft day’s trade resigning the index to a poor week, down -1.4%. The banks & resources took a hit on trade fears as another Canadian national was detained in China. It appears the trade truce has only increased the market’s volatility as traders look to predict outcomes, and investors take risk off the table while awaiting the outcomes. Telcos continued their slide, and tech names also took a battering, while the relatively safer names of utilities and REITs held up in the face of the selling.

Overall, the index closed down -59 points or -1.05% today to 5602 and was down -1.4% on the week. Dow Futures are trading down -172 points / -0.70%.

ASX 200 Chart

 

ASX 200 Chart

CATCHING OUR EYE

Broker Moves; A couple of brokers took the risk on TPG today – upgrading ratings into the slump. As we said yesterday, the initial ACCC comments aren’t a death sentence, and we see the comments as overzealous.

ELSEWHERE;

·         TPG Telecom Upgraded to Hold at Morningstar

·         TPG Telecom Upgraded to Neutral at Goldman; Price Target A$7.20

·         Whitehaven Downgraded to Sell at Morningstar

·         Infigen Rated New Outperform at RBC; PT A$0.65

·         CYBG Upgraded to Market Perform at KBW; PT 2.30 Pounds

·         New Hope Upgraded to Outperform at Credit Suisse; PT A$4

·         Rio Tinto Downgraded to Neutral at Credit Suisse; PT A$79

Sectors this week;

Stocks this week;

Some of the specific events we covered during the week…

5 stocks adding weight to our bullish Christmas picture; On Thursday we looked at stocks that are showing bullish technical patterns which should run higher  into Christmas -  click here

Santa rally – has it started?  We also looked at a number of recent ‘ASX dogs’ that are starting to rally, some significantly so – click here

High yield = High risk,  IOOF (ASX:IFL) a case in point;  We’ve covered the woes of AMP a number of times in recent months (latest article here), however the more interesting case at the moment seems to be the woes facing IOOF (ASX: IFL), a stock that has traded from above $11 to close yesterday at $4.34. Is value starting to emerge? Click here

Telcos were in the spotlight this week thanks to ACCC concerns on pricing; In this note we discuss whether or not we should be concerned about the sector. Click here

Sonic Healthcare (ASX:SHL) this week struck a deal to buy US-based Aurora Diagnostics;  While we like Sonic we think there are better names in the healthcare space that can be bought on the cheap thanks to this market rout. Click here to see

QBE Insurance (ASX:QBE)  was hit during the weak, trading down to a 5 month low after the insurer issued an update that the market has taken as a convoluted profit warning; The update had an imbedded drop in FY19 earnings however the company ‘promised’ to do better in the future. While the backdrop for QBE is improving, another disappointment tests our resolve – click here

Yield Curve;  you’ll start to hear a lot about this; here’s what you need to know – click here

Sigma Healthcare (ASX: SIG) & Australian Pharmaceutical Industries (ASX: API) look to merge; the two pharmaceutical suppliers will look to roll into one. Click here

 OUR CALLS

No changes the portfolios today.

Watch out for the weekend report. Have a great night,

James / Harry & the Market Matters Team

Disclosure

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.

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 14/12/2018

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 MarketMatters 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.