Afternoon Report / Buyers step up and buy the dip

By Market Matters 05 December 18

Buyers step up and buy the dip

Market Matters Afternoon Report 5th December 2018

WHAT MATTERED TODAY

A weak open to trade this morning with the Australian market following overseas indices down the chute early – however buyers stepped into the weakness and the market experienced a fairly impressive +60pt recovery from the lows. The ASX 200 finished down  ~44points which actually felt like a win….

Trump tweeted the following during our session…

While it was being reported that China said the trade meeting with the U.S. was “very successful” and is “confident” of implementing the results agreed upon at the talks, but didn’t provide any further details on the outcome.

We also saw Chinese data out around lunchtime which was firmer than expected, the Caixin PMI a strong beat on expectations which underpinned a decent move higher in the resource sector – BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO) both finished up on the session which is a decent sign given the DOW finished down ~800points.

Chinese Manufacturing Data Today

I put on a ~30m presentation today at lunchtime, which can be viewed here – providing a quick update on our market view. We had a busy morning on the desk and as a consequence the webinar was done off the cuff, so apologies for that however it may be useful for some. Click on the image below to view. We cover our view for stocks into Christmas,  the inverted yield curve which we also covered in today’s income report

Overall, the ASX 200 closed down -44 points or -0.78% to 5668. Dow Futures are currently trading up +61 points or +0.24%. The US markets are closed tonight for the Bush Funeral.

ASX 200 Chart

ASX 200 Chart

 

CATCHING OUR EYE;

Broker Moves;  Macquarie have been busy recently, upgrading Sandfire Resources, Whitehaven, Alacer Gold and New Hope as a result of price changes; bank cut ratings on Orocobre, Alumina, Galaxy Resources and Regis Resources

ELSEWHERE:

·         Pinnacle Investment Management Group New Outperform at Macquarie

·         Sandfire Upgraded to Outperform at Macquarie; PT A$7.70

·         Galaxy Resources Cut to Neutral at Macquarie; Price Target A$3

·         Alacer Gold GDRs Upgraded to Outperform at Macquarie; PT A$2.70

·         Orocobre Downgraded to Neutral at Macquarie; PT A$4.60

·         Whitehaven Upgraded to Outperform at Macquarie; PT A$5.60

·         Whitehaven Reinstated at Goldman With Neutral; PT A$4.60

·         Regis Resources Cut to Neutral at Macquarie; Price Target A$4.50

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

·         Coles Group Upgraded to Outperform at Macquarie; PT A$13.48

·         Sims Metal Reinstated at Morgan Stanley With Overweight; PT A$15

·         Beach Energy Downgraded to Hold at Morningstar

·         Wesfarmers Upgraded to Hold at Morningstar

·         AusNet Rated New Sector Perform at RBC; PT A$1.60

·         Huon Aquaculture Cut to Neutral at Credit Suisse; PT A$4.90

·         Alumina Rated New Buy at Goldman; PT A$2.70

·         Santos Reinstated at Goldman With Neutral; PT A$6.90

OUR CALLS

No changes today.

Have a great night

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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