Afternoon Report / Rate cut on the way – markets rally (short note)

By Market Matters 16 May 19

Rate cut on the way – markets rally (short note)

Market Matters Afternoon Report Thursday 16th May 2019


WHAT MATTERED TODAY

The Aussie market latched onto the ‘lower interest rate’ trade today, and rallied strongly after the employment data dropped at 11.30am – the buying intensified into the close. Unemployment came in at 5.2%, above the 5.0% expected by the market even though +28k jobs were added v expectations of 15k. Full time employment was weak offset by some strength in the part-time figure however overall, the numbers set up  a rate cut in June. HSBC the latest to hit the airwaves this afternoon saying  "Despite considerable reluctance to cut the cash rate, and a strong preference for a fiscal policy response, we now expect that the RBA will be forced to cut. With little reason to wait, we now expect the RBA to cut its cash rate in June by 25 basis points to 1.25 per cent, and to cut again in August (after the Q2 CPI) to 1.00 per cent." (source  HSBC)

Today’s data the key

 
Source: Bloomberg

A short note this afternoon after one of those really busy days on the desk. Tomorrow morning I’ll look at interest rates but more importantly, stocks that have the capacity to pay special dividends from here.  
Overall today, the ASX 200 added  +43 points or +0.69% to 6327. Dow Futures are trading down -87pts / -0.34%. 

ASX 200 Chart

 

ASX 200 Chart


Broker moves: 

·         Goodman Property Downgraded to Neutral at Macquarie; PT NZ$1.83

·         Goodman Property Cut to Underperform at First NZ Capital

·         South32 Rated New Overweight at Morgan Stanley; PT A$4.05

·         St Barbara Cut to Underperform at Credit Suisse; PT A$2.72

·         Ramelius Downgraded to Sector Perform at RBC; PT A$0.80

·         Sydney Airport Cut to Hold at Morgans Financial; PT A$7.61


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.

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