Afternoon Report / Energy & Resources push the market higher (RIO, CYB)

By Market Matters 15 May 19

Energy & Resources push the market higher (RIO, CYB)

Market Matters Afternoon Report 15th May 2019

WHAT MATTERED TODAY

Stocks recovered most of the losses incurred the prior session today – Energy and Resources the main game in town  however the buying was very broad based with all sectors ticking higher. US Futures provided a positive backdrop – up around +0.2% for most of our session while Asian markets were also positive.

Data out of China today was mixed to mostly weaker – industrial production & retail sales both on the softer side of expectations, however the bad news is good thematic seems obvious here, with more chance for central bank stimulus as Trump applies higher tariffs to Chinese goods.

Chinese data today

Overall today, the ASX 200 added  +44 points or +0.71% to 6284. Dow Futures are trading up +60pts / +0.23%. 

ASX 200 Chart

ASX 200 Chart

CATCHING OUR EYE;

Iron Ore Miners  we focussed on Fortescue (FMG) in the income note today after they stormed higher yesterday, however it was others in the sector that performed better on today’s session.  Rio Tinto, a stock we added to the income portfolio yesterday led the charge adding more than 2% to close at $98.31 – RIO looks strong for another test of recent highs. A bullish note on Iron Ore out today from First NZ Capital Securities saying prices will peak at $110 next quarter, when the port stockpiles will be completely depleted of available supplies. Stockpiles will then slowly rebound, with prices easing from the fourth quarter, it said. Click here to view todays note on Fortescue Metals (FMG)

Rio Tinto (RIO) Chart

CYBG (CYB) +0.58%  reported at 4pm today so the reaction will happen first in the UK tonight, however it looks like the 1H result is in line to a slight beat. They printed pre-tax profit of  GBP286m which was above the GBP272m expected plus they reaffirmed their 2019 outlook, however it was a low quality beat at best. 

CYBG (CYB) Chart

Broker moves:

·         Woolworths Group Downgraded to Neutral at UBS; PT A$32.90

·         Infratil Downgraded to Neutral at Forsyth Barr; PT NZ$4.40

·         Wesfarmers Cut to Neutral at Macquarie; Price Target A$37.13

·         Mayne Pharma Downgraded to Hold at Bell Potter; PT A$0.62

·         Mayne Pharma Downgraded to Neutral at Credit Suisse; PT A$0.64

·         Altium Upgraded to Buy at Bell Potter; Price Target A$37.50

·         Scentre Group Upgraded to Outperform at Credit Suisse; PT A$4.20

·         OZ Minerals Reinstated at Goldman With Neutral; PT A$9.70

·         AusNet Downgraded to Sell at Citi

OUR CALLS

No changes today

Have a great night

James & 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 15/05/2019

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