Australian Shares

19

A new normal for the ASX

The reporting is upon us and the usual game of working how the mostly predictable results have been priced in begins. UBS is predicting a further slow down in aggregate earnings growth and a continuation of the dual speed economy. In FY12 they are predicting earnings growth of 13% in energy, 28% in general industrials and 11% in telcos.

20

Trading Day

Unicorn hunting today on the S&P/ASX 200 Index, even though Fairfax (FXJ) had its day, up over 10%, the local bourse down nearly 1% or 37 points to 4225 points. The market has just broken below its new year uptrend, bouncing off strong resistance at the 4300 point level, possibly heading to rising support at

47

Retail faces double trouble

Apparently consumers have never had it so good. The Aussie dollar continues to float along at cloud like levels and consumers take advantage buying goods much cheaper online, prompting howls of protest from retailers. Economists then suggest that retail spending is fine and we are all overreacting to Europe and need to loosen the purse

12

Trading Day

After a choppy start and then following leads from other Asian markets (and supposedly from “progress” on Greek debt-swap talks), the S&P/ASX 200 Index finished the last trading day of January by selling off in the afternoon, down 6 points or 0.15% at 4266 points. I keep harping on it, but the ASX200 still needs

38

Woolworths to dump Dick Smiths

Woolworths (WOW) announced a strategic review of its Dick Smith Electronics (DSE) stores in November last year and posted the results this morning alongside its latest sales figures (up 5.6% in the last half of 2011). The review’s main conclusion was that DSE did not fit the mold of “high volume…market-leading” position, the latter a

3

Banks will need to issue unsecured debt

Following H&H’s post early this morning, Macquarie is casting a sceptical eye over bank funding, arguing that the domestic issuance of covered bonds is only buying time for the major banks and pointing out that unsecured lending will have to start again at some point: Given the recent covered bond issues, the depth of the domestic Government bond market

18

Trading Day: BHP moves on

It’s fun reading the Bloomberg quotes throughout the day, as they lag (on the free site, not the terminal) the price action considerably. Asian markets were down, up and then down throughout the day, yet each headline gave the “reason” for the former move….love it.. Anyway, onto want happened without (much) bias. The S&P/ASX 200

21

Trading Day – Banks crack!

The S&P/ASX 200 Index finished strongly today, finally turning a good open into a solid day, up 47 points or more than 1% at 4271 points. The bourse stands at the each of completing the symmetrical triangle pattern, but still needs to clear the 4300 area, climbing above the 200 day moving average for this

12

The value in BHP

The Australian economy is something of a bright spot in the developed world but its stock market is not. One reason may be that about two fifths of the ownership is foriegn and the high currency is a disincentive. Foreign investors are much more confronted by the effect of the Great Recession so more inclined

17

Chart of the Day: Apple in your eye

Global consumer electronics leader Apple (AAPL) reported earnings last night, with Q1 earnings more than doubling, due mainly to the iPad and iPhone products. Remarkably, gross margins improved to almost 45% (what a business!) Looking past the earnings headlines numbers, what’s important from an investment strategy point of view, is how much other investors are

1

Market Morning

Risk markets fell last night, as ructions over the continued debate over whether or not private bondholders should escape nearly scot-free from their bad investment choices continued, overshadowing good flash services/manufacturing PMI data from France and Germany. US corporate earnings were not disappointing, on the whole (consumers still love eating “food” at McDonald’s and using

1

Trading Day

The S&P/ASX 200 Index slipped again today, finishing flat on very low volume, following similar leads from overnight markets. The bourse finished down barely 1 points or 0.02% at 4224 points: The market needs to clear the 4300 area (the upper breakout of the symmetrical triangle pattern on the weekly chart and above the 200

6

Trading Day

The S&P/ASX 200 Index slipped again today, starting the week slowly and on very low volume, with mainly positive leads from other Asian markets. The bourse finished down 14 points or 0.3% at 4225 points: As I explained this morning, the market needs to clear the 4300 area (the upper breakout of the symmetrical triangle

21

Picking bottoms again

Craig James had the boffins at Commsec create an analog daily chart of the All Ords, comparing the February-March 2009 bear market bottom to the current December 2011 (incorrectly shown as 2010) to January 2012 daily period. The implication is that the current period is analagous to the Feb-Mar 2009 bottom, which then preceded to

5

Trading Day

The S&P/ASX 200 Index jumped on the open again today, but was slowly sold off before the 2pm turn when a flurry of bids were made, probably on positive leads from other Asian markets. The bourse finished up 24 points or 0.6% to finish at 4239 points: The market still needs to clear the 4300

8

Trading Day

A blessing of unicorns jumped across the rainbow fields of the S&P/ASX 200 Index today, but were taken out by short-statured hunters on a grassy knoll, as the market closed down 3 points to finish at 4214 points. The 4200 point level of resistance remains breached, with volume building and above the 20 day moving

46

Pessimism fatigue

Earlier this month I said: So we could see a de-coupling between economic outcomes and market performance particularly should quantitative easing recommence in the US, Europe and the UK I really think this is and remains a tradable investment theme in at least the first part of 2012 and the equity market, as represented by the

8

Chart of the Day: pump up the volume

Today’s chart is a study I’ve completed on volume of stocks traded on the S&P500 and ASX200 share markets. Given its still the first month of the year, it is expected that volume would be low (and hence volatility high?), with the gnawing possibility that the current rally in risk assets is nothing more than

2

Market Morning

Risk markets continued to rally last night, with the US dollar falling in response, as the US corporate earnings season rolls on. In detail: The UK FTSE put on 8 points or 0.1% to finish at 5702 points, just on its resistance level at 5700 points and looking bullish. The German DAX was also up,

4

Trading Day

A choppy day on the S&P/ASX 200 Index today up just 2 points to finish at 4217 points. The 4200 point level of resistance remains broken, with volume now building post NY, above the 20 day moving average (pink line in chart below), with the the next target of 4300 points to be cleared before

8

Chart of the Day: Margin compression

Today’s chart comes from Ed Yardeni’s blog showing the consensus annual estimates for profit margins for companies listed on the US S&P500 index: Although revenue is climbing (but still below nominal levels pre-GFC), it is evident that margins are being squeezed at circa 10% level, as corporates have presumably completed their headcount reductions and other

1

Market Morning

Risk markets were buoyed last night by the confirmation of the “soft landing = stimulus coming” meme embedded in the Chinese GDP print, where the Shanghai Composite eventually closing up more than 4%, with a successful Spanish debt auction helping Euro markets. US markets then played catch up (for once) reacting positively to the very

33

Trading Day: banking on a rally

Asian markets have all reacted favourably to Chinese Q4 GDP numbers with a surprise result of 8.9% y-o-y, although quarterly was 2% growth, with the S&P/ASX 200 Index leading the charge, bid up all day to finish up 1.5% or 63 points to 4210 points. The 4200 point level of resistance has thus been broken,

4

Market Morning

Risk markets were mixed last night as the S&P downgraded the EFSF, almost 2 billion Euro in French government bond debt was successfully sold, yet Portugese 10 year yields jumped to 14.4% from 13%, as it was downgraded to junk. US markets were closed due to a public holiday, but Q4 corporate earnings expectations are

2

Trading Day

The funk from the Atlantic reached Asian markets, with the S&P/ASX 200 Index down over 1% or nearly 50 points to 4147 points today. The 4200 point level of resistance remains key, and the market is pushing back at any attempts to clear over this level, whilst in the intermediate, a bearish pennant has formed:

2

Market Morning

The luck for risk ran out on Friday the 13th, when S&P downgraded most of Europe (except golden haired boy Germany, who has done nothing wrong….) and US corporate earnings continued to, not disappoint, but underwhelm, particularly the banks. In detail: The UK FTSE dropped 25 points or 0.5% to finish at 5636 points, still

10

Trading Day

A very positive day on Asian markets today, as optimism abounds, with the S&P/ASX 200 Index up nearly 15 points to 4195, after reaching 4200 points intraday. This level of resistance remains key, and the market could still retrace back to its rising support line as it routinely tries to clear it: This supports a

10

Market Morning

Risk markets continue to be dragged sideways like a husband through a shopping mall, where overnight in Europe, Spanish and Italian debt auctions were very successful with yields falling sharply, the Italian stock market jumping more than 2% on the result. However the news was a bit more muted in the US, with a double

14

Trading Day – QBE drags

The risk on rally continued to slip on Asian markets today, as official Chinese inflation numbers showed a fall to an almost Western level of 4.1% for the year. The dramatic fall in the price of QBE Insurance, due to a profit downgrade (a review will be posted tomorrow on MacroBusiness) only with general uncertaintly

0

Market Morning

Mixed night on risk markets, where in Europe, Germany’s 2011 GDP growth at 3% did little to settle nerves as the data also suggested a contraction for the Euro’s strongest economy, whilst the good anecdotal news from the US Fed Biege Book failed to set US equities markets on fire as corporate earnings season rolled