18 September 19
Gold & IT stocks best on ground, Energy stocks weigh (CNI, CMA, QAN)
18 September 19
Gold & IT stocks best on ground, Energy stocks weigh (CNI, CMA, QAN)
18 September 19
Income Report: Stepping up and fading the recent move in bond yields – includes portfolio buy-sell alerts (SKI, TCL, FLT, WHC, EHE)
18 September 19
Overseas Wednesday – International Equities & ETF Portfolios (GDX US, NCM, BABA US, TTD US, PSH NA, BAC US, RY CN)
17 September 19
RBA still banging the lower for longer call on rates
17 September 19
Bond yields firm, oil surges should we “run” from growth to cyclicals? (RHC, NCM, BSL, WPL)
16 September 19
Crude spikes, Bellamy’s bid while Sims scraps guidance (BAL, SGM, BHP)
16 September 19
Subscribers questions (BHP, OZL, IIND, MSB, MGG, NCM, ASL, AWC, WSA, HLS)
15 September 19
Market Matters Weekend Report Sunday 15th September 2019
13 September 19
Tech continues to struggle
13 September 19
Does the Healthcare sector look poised to repeat 2018? (CSL, COH, RMD, ANN, PME)
The ASX200 surprised many on the upside yesterday (including us) as it appeared to become excited by 1. Westpac economist Bills Evans’ forecast that the RBA would cut interest rates twice this year & 2. Details emerging of a potential trade deal.
Mr Evans thinks our GDP growth will now be closer to 2.2%, compared to the previously anticipated 2.6%, and unemployment will rise to 5.5% by late this year, when combined with our weak property market it seriously feels Australia is intent on talking itself into its first recession in 27-years. It appears to be a very fine line that equity markets are walking between enjoying more financial engineering (lower interest rates & / or stimulus) and overlooking the usual very negative impact that a meaningful downturn in the economy exerts on stocks – only last December stocks plunged when investors became nervous of a looming slowdown.
The afternoons surge by the ASX200 was well and truly led by the banks with the “big 4” rallying an average of +1.5%, investors are clearly believing in their sustainable yield as opposed to potential bad debts moving forward - we will briefly look at the sector later. More stocks did rise than fall on this active Thursday but sector performance was mixed with gains in banks, financials being partly offset by losses in resources and especially golds.
MM’s ideal scenario remains a pullback of around 175-points from the current area and we will be looking to buy this move, at least short-term.
MM remains in a patient “buy mode” with relatively elevated cash levels.
Overnight US markets were weaker with the Dow down 103-points while European stocks were mixed – the ASX200 looks set to receive more pressure from the resources with BHP down ~0.7% in the US. Today we are again going to evaluate 3 of the best and worst stocks from yesterday as reporting season now cools down slightly.
ASX200 March SPI Futures Chart
Star Entertainment (SGR) $4.65
Star Entertainment (SGR) met expectations yesterday and bounced back from the Crown led selloff the day before. The 1H was strong and importantly, they’re seeing top line revenue growth which is good. That led to a solid +5.7% pop in the stock compared to rival Crown (CWN) which continued to drift lower.
It looked to me there was clear selling of CWN to buy SGR i.e. a switch within the casino sector. Over the last month CWN is down 4% while SGR has rallied +9.2%, I think this outperformance by the Sydney operator SGR will continue and that perhaps a turnaround is now on the cards. Good volume into yesterday’s buying implies we’re not the only ones sniffing around here.
While we’re looking to buy SGR, for now we’ll remain patient ideally targeting the low end of the range around $4.20, however we may pay up.
Star Entertainment (ASX: SGR) v Crown Resorts (ASX: CWN) Chart
The banks “feel” firm.
MM has been overweight banks for a while and on days like Thursday it feels a good call, interestingly one that still appears a touch contrarian – MM is holding 30% of the Platinum Portfolio in the “big 4” banks compared to their index weight of 20% i.e. we are 50% overweight.
When we look at Westpac (WBC) it may be 15% above its recent multi-year lows, however trading on a forward PE of 11.5x and yielding 7% versus a broader market that is now expensive remains appealing to us, even though I appreciate that growth is hard to come by in the sector.
In the case of WBC, it generally trades on a 2% premium to the sector, however currently its trading on a 2% discount. NAB remains the cheapest bank across the board and arguably has the most upside if they ‘self-help’ from here. CBA has regained its sector premium and then some which implies this should be the first bank on the chopping block if we lighten the load.
At this stage we feel banks look good and fundies remain underweight, hence most pain could be up.
Westpac Bank (ASX: WBC) Chart
No change with European indices who have reached more resistance and our target area following their 12% bounce, we are now neutral to bearish from a simple risk / reward basis.
This reaffirms our believe that patience is likely to be rewarded with buying of the market in general – clearly not necessarily on a stock by stock basis.
Euro Stoxx 50 Chart
No change with US markets, we still believe they have a strong risk to the downside with our target ~5-6% lower. The upside momentum is wanning and a lot of good news has been baked into the recent index appreciation.
US S&P500 Chart
3 of the best performing stocks.
Yesterday we saw the 10 stocks rally by over 5% making it a tough call to pick just 3 to evaluate this morning but after mentioning SGR earlier we have focused on stocks that may be worth buying.
1 Webjet (ASX: WEB) $14.85
Yesterday WEB rallied a huge +30.6%, an advance we simply could not ignore. MM realised an almost 40% profit by selling WEB in June last year which looked a great call as the stock fell almost 30% to test the $10 area but in one quick move its now above our exit level.
WEB’s result was clearly strong yesterday and the market jumped on it aggressively. The company grew earnings 37% for the half, and gave a better than expected outlook which. Webjet had been under a cloud over the past few months following the disappointing European summer for their partner Thomas Cook which saw lower bookings during a hot UK period, plus Brexit impacting many peoples travel plans. Yesterday that cloud was lifted as the company reaffirmed full year guidance of at least $120m EBITDA with WebBeds continuing to power growth for the company. Despite the somewhat subdued leisure travel market, business travel continues to boom helping profits grow substantially for the business. Acquisitions have also bolstered Webjet, with the purchase of JacTravel and Destinations of the World lifting the company to a record result. However the 30% jump felt simply too much and we will not be chasing the stock higher.
While we like WEB as a trading vehicle, we’re not long term believers in their model. Attracting bookings online is all about optimising search capability, Airbnb is good at this and their recent hire of former Virgin America CEO Fred Reid could indicate that they’re looking to target the air travel market on top of accommodation. Not an immediate threat to WEB earnings but a potential sign of things to come. The disruptor could become the disrupted.
We are neutral WEB at current levels.
Webjet (ASX: WEB) Chart
2 Nine Entertainment (NEC) $1.57
Yesterday NEC rallied well over 7% following the release of its half year results, a result with no negative surprises can often be welcomed by a market entrenched in negativity. They also upgraded FY19 guidance for growth of at least 10% (at the EBITDA line)
While profit is flat, this is a stock priced for no growth. The shares are enjoying a relief rally that looks to have another 10% on the cards. While we view this stock as cheap with a strong yield (and we were considering for the income portfolio), the headwinds faced by a number of their operations over the next 12 months and beyond will likely remain
MM does not see value in NEC from a risk / reward perspective.
Nine Entertainment (ASX: NEC) Chart
3 Platinum (PTM) $5.13
Yesterday PTM rallied almost 7% after declaring net income for the first half of almost $75m on revenue of $133m plus a 13c dividend putting the stock on a yield of around 6.2%. Most of the performance in markets had already been flagged and Funds Under Management (FUM) of $24.1bn, a decline of 6.1%, was clearly regarded as ok by the market - the growth in new products from Platinum should attract FUM in the future. .
PTM is not cheap trading on 19x forward compared to say Janus Henderson (ASX: JHG) on just 10x that we own in the Platinum Portfolio and Perpetual (ASX:PPT) trading on 14x we hold in the Income Portfolio, however like both of those stocks, PTM looks technically bullish.
In terms of PTM, we are bullish at current levels initially targeting 15% upside, conversely JHG has now achieved our 30% bounce target and has clear resistance around $34.50, however this could easily bounce further given relative valuation versus the sector (i.e. traders search for cheap ‘market orientated exposures’)
Platinum Asset Mgt (ASX: PTM) Chart
Janus Henderson (ASX: JHG) Chart
3 of the worst performing stocks.
The losers were a smaller group with only 4 stocks falling by over 5% and one of them was Wisetech (WTC) which we said to avoid in yesterday report – we’ll take them when we can!
1 St Barbara (SBM) $4.82
Yesterday SBM fell over 8% following a combination of broker downgrades plus the whole gold sector copped some selling.
We are looking to build some gold exposure in 2019 but not yet.
MM is neutral / bearish SBM with technically 20% downside looking a strong possibility.
St Barbara (ASX: SBM) Chart
2 Saracen Mining (SAR) $2.84
Yesterday SAR continued its decline following average results earlier in the week.
MM may now consider SAR around $2.50 but not yet as the downside momentum increases.
Saracen Mining (ASX: SAR) Chart
3 Mineral Resources (MIN) $16.84
Yesterday MIN fell by over -5% yesterday although they remain on track to achieve the FY19 EBITDA guidance of $280m to $320m. Expenditure of almost $400m has been reported for the construction of lithium mine / processing facilities.
Investors who want to gain exposure to the volatile lithium space could consider MIN with a stop below $15.
MM has no interest in MIN at this point in time.
Mineral Resources (ASX: MIN) Chart
Technically PTM looks more appealing than JHG at current levels following the latter’s strong bounce.
Overnight Market Matters Wrap
· The SPI is down 8 points as US equities fell overnight. The Dow, NASDAQ and S&P 500 all closed down 0.4% weaker.
· US economic growth was revised down and orders for US made capital goods fell in December. Meanwhile one of the Fed presidents said rate normalisation is coming to an end, while another said there are no signs of inflation despite low unemployment.
· The $A fell to US$0.7081 after reports that a large Chinese port operator has banned the shipment of Australian coal. The $A wasn’t helped by comments from a Westpac economist predicting two RBA interest rate cuts this year.
· Nickel and copper fell and aluminium rose on the LME. Iron ore is 1.5% lower, while oil and gold are also trading in the red.
Have a great day!
James & the Market Matters Team
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.
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 22/02/2019
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.
Financial Services Guide
Date prepared: Wednesday, 22 November 2017
Last update: Friday, 23rd April 2019
About this Financial Services Guide (FSG)
This FSG provides you with key information about a range of subscription services offered by:
Marketmatters Pty Ltd (Market Matters) Australian Financial Services Licence No. 488798 ABN (20 137 462 536)
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
T: 1300 301 868
E: [email protected]
In this FSG, “we”, us” and “our” refer to Market Matters.
Market Matters holds Australian Financial Services Licence No. 488798 (AFSL) and is responsible for any financial services that we provide to you.
This AFSL was issued on 8th September 2016.
The purpose of this FSG is to provide you with information about:
Market Matters operates a website, www.marketmatters.com.au (Website), where customers may, for the payment of a subscription fee, access certain financial information and general advice. In particular, the Website provides:
This FSG relates only to the Website Services.
What financial services we can offer in connection with the Website Services
As holder of AFSL number 488798, in connection with the Website Services we are authorised to provide general financial product advice to both retail and wholesale clients in relation to the following financial products:
The Website Services are comprised of general advice only. That is, none of the advice given on the Website or by provision of the Website Services takes into account any of your objectives, financial situation or needs (Your Personal Circumstances). Before acting on any of the information, advice or Website Services, you must consider the appropriateness of this information in light of Your Personal Circumstances and, if necessary, consult a financial adviser before making any investment decision.
If you are seeking to acquire a specific financial product or security, you should obtain a copy of and consider the Product Disclosure Statement or Prospectus for that product before making any investment decision.
The Website does not provide a trading platform or access to a trading platform. There is no ability to purchase or sell financial products through the Website.
How do I access these services?
You can access these services by going to www.marketmatters.com.au and following the prompts and steps required to sign up for membership. Please read all terms and conditions carefully.
Fees and benefits payable to us and our associates
The Website is a subscription-based service. A yearly fixed subscription fee is payable to Market Matters when you subscribe to the Website which will vary depending on the type of subscription for which you subscribe. At the date of this FSG, the yearly subscription fees are as follows:
Platinum: $1,238 for 12 months
Platinum: $1,993 for 24 months
Subscription fees vary from time to time and are provided on the Website.
The Website does not currently feature third party advertising. Market Matters reserve the right to advertise at a future time for which they may receive remuneration. Any such advertising will be independent of any other content on the Website.
All representatives of Market Matters (Market Matters Staff) receive a salary paid by Market Matters. Market Matters Staff may also receive performance-based bonuses which are based on profitability, the number of subscribers and subscription renewal rates.
How do we manage potential conflicts of interest?
Market Matters have implemented policies and procedures to mitigate the risk of conflicts of interest. These include:
Market Matters Staff and Contributors are encouraged to express independent views and opinions on the topics they write about. This is established through ongoing training, external audits and our conflict of interest and staff trading policies. Market Matters Staff are required to serve the best interests of the subscribers, without consideration of any commercial or personal interests.
How is my personal information dealt with?
If you have a complaint about our services, you should take the following steps:
Contact us and discuss the complaint directly. If you do not feel comfortable discussing the complaint with us or your complaint is not satisfactorily resolved within 2 business days, please telephone Market Matters, on 1300 301 868 and ask to speak with the Complaints Officer. We suggest you put your complaint in writing at this time so that the issues are fully documented and understood by the parties. Your complaint should be addressed to:
The Complaints Officer
Level 29, Chifley Tower,
2 Chifley Square Sydney NSW 2000
Market Matters will review your complaint within 45 days and attempt resolution. If you are still not satisfied with the outcome, you may take your complaint to an external dispute resolution scheme. Market Matters is a member of the scheme operated by the Financial Ombudsman Service. You should write to:Australian Financial Complaints Authority Limited (AFCA)
You may also wish to consult ASIC in relation to your complaint. ASIC’s website contains information on complaining about companies and people and describes the types of complaints handled by ASIC. You can contact ASIC on its free call infoline:
Tel: 1300 300 630 or email [email protected]
We maintain professional indemnity insurance to cover our employees and Authorised Representatives (including us) for the financial services they provide, having regard to the following:
If you require further information about these compensation arrangements please contact us.
Terms and Conditions
This website, www.marketmatters.com.au, is published by Marketmatters Pty Limited (ABN 20 137 462 536) ('Market Matters', 'MM', 'us', 'we', 'our') Australian Financial Services Licence 488798
Financial Services Guide
Market Matters Financial Services Guide (FSG) is located here, and contains important information about the financial services provided by Market Matters. You must read our FSG and consider it in the context of your Personal Circumstances before acting on any advice. By accepting the terms and conditions you are acknowledging that you have read the FSG.
Provision of the Reports
Reports and other documents published on the Market Matter’s website (‘Reports’) are authored by Market Matters. The Reports represent the views of Market Matters 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 distribution 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.
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.
If you rely on a Report, you do so at your own risk. 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.
Past performance is not a reliable indicator of future results. Brokerage costs have not been included in the calculation of performance. As financial products rise and fall in value, returns may be negative. Performance figures are not intended to be a forecast. Market Matters does not guarantee the performance of or returns on any investment.
Employees and/or associates of Market Matters may hold one or more of the stocks reviewed on this website.
Subscriptions and Subscription Prices
To access premium content available on the Market Matters website you may initially subscribe through the complimentary trial which provides you full access to all services for the trial period. You are limited to two trials after which you must subscribe to one or more membership categories available on the website or direct with Market Matters before you can trial the service again, three months after the expiry of your second trial.
To subscribe to Market Matters services and access to the website you may go to the Memberships page of the website, provide the information marked as ‘Mandatory’ and select the payment option for the price quoted (at the time of your transaction) or contact the team directly at Market Matters by phone or email. You will then receive a verification email from Market Matters indicating that your subscription and payment have been accepted and you will be able to access the premium content.
Prices published on the Market Matters website are quoted in Australian Dollars (AUD) and are inclusive of GST and/or all other duties and taxes. Market Matters has used reasonable endeavours to ensure that prices for subscription to its services are published accurately on the website but these prices are subject to change and Market Matters reserves the right to change these prices and will notify you of any increase by email (with the price increase to apply from the time the next payment is due).
Marketmatters Pty Ltd (ABN 20 137 462 536) will issue a tax invoice to paying subscribers in relation to any supply that is subject to GST in accordance with A New Tax System (Goods and Services Tax) Act 1999.
Any member is entitled to cancel their membership at any time. In the event a member does wish to cancel their subscription, cancellations must be notified in writing to:
Level 29, Chifley Tower, 2 Chifley Square, Sydney NSW 2000
or by email to: [email protected]
All cancellations of month-by-month subscriptions will be cancelled and not billed again the following month.
All cancellations within 14 days we be entitled to a full refund. Any introductory gifts, such as, but not limited to; iPads, Fitbit watches, Apple watches, Google Homes, must be returned in their original condition before a refund will be made.
All cancellations made after 14 days of subscription commencement will not be entitled to a refund unless in the event of extenuating circumstances, at the sole discretion of Market Matters.
Subscriptions will automatically renew on the expiry date of current subscription. In these instances the subscription will be renewed at the current rate published on the Market Matters web site, using the same credit card that paid for the initial subscription, unless otherwise requested by the subscriber. A subscriber who wishes to cancel after being renewed in this way will have a “14 day cooling off period” in which they can request to discontinue and will receive a full refund for the renewal payment, this can be done in writing to:
Level 29, Chifley Tower, 2 Chifley Square Sydney 2000
or by email to: [email protected]
Market Matters has not reviewed any of the websites which link to this website or to which this website links. Market Matters is not responsible for the content of any other website or pages linked to or linking to its website. Following links to any other websites or pages shall be at the user’s own risk.
Copyright © 2018 Marketmatters Pty Ltd (ABN 20 137 462 536). No part of this website, or its content, may be reproduced in any form without the prior consent of Market Matters.
This Agreement is governed by and is to be construed in accordance with the laws of New South Wales, Australia. You agree to the non-exclusive jurisdiction of the courts of New South Wales, Australia in respect of any proceedings concerning this Agreement. This website is not available to US and/or EU persons and by accepting these terms you confirm that you are not a US and/or EU person.