Afternoon Report / ASX stumbling to the finish line **International Alerts - Sell MSFT US, 700 HK + Buy ANTO LN, AAL LN**

WHAT MATTERED TODAY

The ASX stumbled into the weekend today after a particularly weak lead from international markets overnight and continued selling seeing in futures markets. The weakness came on the back of increased fears of the depths of the economic impact yet to be felt by the global economy, combined with an escalation of tensions between the US & China. Usurpingly tech was the worst hit of the sectors with the largest weight in the tech group, Afterpay (APT) falling over 3%. REITs were also in the firing line, particularly the retail exposed names.

Vicinity Centres (VCX) took some bit hits on property valuations across their book, taking 11.3% off the top following independent valuations at the end of the financial year. The revisions come as a result of both one-off and longer-term impacts from COVID which will change the landscape of retail around the world. Other retail REITs were sold off on the news as well. On the positive side, the earnings ‘safe havens’ in utilities and consumer staples managed to edge out gains against the soft market. The ASX had its second fall of greater than 1% for the week, enough to offset Tuesday’s big rise to see the market finish lower across the 5 sessions though the index continues to remain range bound,

Overall, the ASX 200 lost -70pts / -1.16% to close at 6024. Dow Futures are trading down -122pts / -0.46% 

ASX 200 Chart

ASX 200 Chart

CATCHING MY EYE:

Sectors this week

Source: Bloomberg

Stocks this week

Source: Bloomberg

BROKER MOVES:

·         Northern Star Cut to Underperform at Macquarie; PT A$14

·         Elders Rated New Outperform at Macquarie; PT A$12.83

·         Evolution Cut to Underperform at Macquarie; PT A$5.20

·         Cooper Energy Cut to Neutral at Macquarie

·         Cochlear Cut to Market-Weight at Wilsons; PT A$209.41

·         OZ Minerals Cut to Sell at Morningstar

·         Perpetual Cut to Hold at Morningstar

·         Charter Hall Group Cut to Sell at Morningstar

·         Evolution Cut to Neutral at Credit Suisse; PT A$6

·         Northern Star Cut to Neutral at Credit Suisse; PT A$16

·         Northern Star Cut to Hold at EL & C Baillieu; PT A$15.90

·         Imdex Raised to Buy at Hartleys Ltd; PT A$1.51

OUR CALLS

We are tweaking the MM International Portfolio , reducing our weighting towards technology by trimming Microsoft and Tencent and increasing our weightings towards resources by adding Anglo American & Antofagasta as per commentary in this week’s note – click here

 

Microsoft (MSFT US) Chart

Tencent Holdings (700 HK) Chart

Antofagasta PLC (ANTO LN) Chart

Anglo American (AAL LN) Chart

Major Movers Today

Have a great weekend

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.

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