Australian Shares

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Trading Day 28th April

Yesterday’s inflation figures weighed heavily on the market as it dropped almost 1%, but found support at the pre-Easter opening level (4870). Overnight, news from The Bernank that everything is fine, but its not, so we will continue to stimulate, rallied all risk markets (except silver), and the Aussie market has opened up on digestion

12

Dollar downgrades

The impact of the high Australian dollar is becoming a feature in broker forecasts and broker sentiment. Southern Cross, having blamed the Federal government for all Australia’s problems, now seems to believe that some of it is due to the high currency. Perhaps they have woken to the joys of reading MacroBusiness. A Southern Cross report today

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Housing corrections & shares

We talk a lot on MacroBusiness about an Australian housing bubble.  H&H, UE and DE are doing a sterling job of demonstrating Australian house prices are historically high by any meaningful measure.  Plenty of people – in fact most in the mainstream media and real estate industry – disagree with them, some vehemently so. But

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Trading Day – 27th April

Summary After peaking sharply on the open, the market has settled slightly up after the almost week long Easter/ANZAC break, at 4918 points. NOTE: as I was compiling this report, the PPI figures came out and the market has sunk over 20 points after midday. The short term trend remains weak but positive on momentum,

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Trading Day 21st April – green across the board

Note: anything in quotation marks is a reference to earlier notes that I’ve made. These comments are read in context of an investor/trader with a medium term timeframe. The S&P/ASX200 Index (and others) Its green across the board: all stocks, futures and commodities are up and gold has surpassed $US1500 and change – but paradoxically

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Woolies vs Coles

There has been a lot of commentary about Coles’ improved performance when compared with Woolworths’. Stephen Bartholomeusz enthuses about the “renaissance of Coles” although he is careful to  say that Woolworths is doing alright as well.  Elizabeth Knight enthuses about the “dazzling sales number from Coles raises the stakes in the mother of all supermarket

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Dow set to pop the champagne

What a difference a couple of days can make. Earlier this week we had global inflation concerns, with a tightening from China weighing on markets. This was followed by growing sovereign concerns on restructure talk in Europe’s periphery and S&P’s downgrade to the outlook for the US’s sovereign debt rating. While these fundamentals are still

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Trading Day: 20th April

Note: anything in quotation marks is a reference to earlier notes that I’ve made. These comments are read in context of an investor/trader with a medium term timeframe. The S&P/ASX200 Index – XJO The S&P/ASX200 has bounced back slightly this morning on reflated overseas markets, up 0.7% around midday. As I said yesterday, the market

11

The gov’ment done it

An investment note by Southern Cross looks at the effect of Australia’s political leadership on the stock market, which is a subject not often addressed, at least by analysts. Privately, many say that the Resources Super Profits Tax has scared off foreign investors for a very long time because it made Australia look “socialist”. If

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Trading Day: 19th April

Note: anything in quotation marks is a reference to earlier notes that I’ve made. These comments are read in context of an investor/trader with a medium term timeframe. The S&P/ASX200 Index – XJO The S&P/ASX200 has fallen substantially this morning and continues into midday trading, hovering around 4800 points. This is now well below its

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Don’t worry, be happy

The consensus on MacroBusiness is that housing currently has more downside risk than upside potential, that the banks’s earning growth is increasingly limited and that the consumer has switched off. Being a bear by temperament myself, I can but agree. But we bears are often wrong and it is worth at least considering the opposite case.

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Trading Day: 18th April

Note: anything in quotation marks is a reference to earlier notes that I’ve made. These comments are read in context of an investor/trader with a medium term timeframe. S&P/ASX200 Index – XJO The S&P/ASX200 is subdued this morning, just above 4850 points. The market is hovering just below its 15 day moving average and decelerating.

3

Woolworth’s Q3 Update: Nothing Unexpected

Woolworths released its FY11 Q3 sales update today, reaffirming the latest guidance for FY11 NPAT to increase by 5% to 8%.  The market seemed to like the news, with shares up about 1% in today’s trading. Funny thing is, the update didn’t contain any unexpected news.  Here’s a brief summary by segment:  Supermarket sales are

2

Catching a falling builder

Leighton’s debacle has been well analysed  on MacroBusiness. It appears to be a problem of poor incentive structures, which had been changed. Bonuses were paid for winning tenders, not on whether they would be profitable. Different divisions of the company bid against each other. The result was like paying fund managers for assets under management,

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Weekly market analysis

Australian Market Summary The S&P/ASX200 index closed the week at 4852 points, slipping a further 0.66% on Friday, going down for the fourth day in a row. Overnight action in the US and EU supports a theory that this is just a dip, with the Dow rallying almost 0.5% and the FTSE 100 up over

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The Leighton debacle

I was doing some quick lunch time reading of the various Leighton’s (LEI) press releases that have hit the market recently.  For those who have been living on Mars inside a cave, LEI announced a $700M+ turnaround in profit for FY11 – to come in at a forecasted loss of $427M.  Ouch.   The horrible

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Trading Day: 15th April

Note: anything in quotation marks is a reference to yesterday’s or earlier notes that I’ve made. These comments are read in context of an investor/trader with a medium term timeframe. S&P/ASX200 Index – XJO The S&P/ASX200 is down 16 points to 4867. The market is hovering above its 15 day moving average and slowly decelerating.

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World equities champion!

Australia is the best performing equity market in the world over the past century according to a Bloomberg story. I confess I would never have thought this but given the claim has been made by the London Business School and Credit Suisse I guess it has some credibility. If this is truly the case, it begs

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Trading Day: 14th April

Note: anything in quotation marks is a reference to yesterday’s or earlier notes that I’ve made. S&P/ASX200 Index – XJO The S&P/ASX200 is down 44 points to 4867. Leighton (LEI) is weighing on the market after plunging 15% on the open. I see nearly a wall of red on my quote screen. The market is

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Just holes

It may have passed Craig James by, but a few brokers are starting to wake up to the obvious. That the Australian economy is being permanently altered by the mining boom and the impact of China. It will inevitably bias the stock market towards resources. No houses, just holes. A report by Southern Cross arrives

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Trading Day: 13th April

S&P/ASX200 Index – XJO The S&P/ASX200 is down 5 points to 4893 after a bouncy opening session. The banks are holding up the resources as the risk-trades start to wind back a little. There is weak support at the psychological important 4900 level, but I would apply caution as overnight markets (e.g Dow, SP500, FTSE

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Lies, Damned Lies and Earnings per Share

At Empire Investing we’re always amused – and a little exasperated – at the use of erroneous financial measures to provide indications of a company’s value or highlight the benefit of an M&A.  Earnings per share (EPS) and dividend yield are probably the most commonly used, however when promoted as single metrics (i.e. in isolation) they

3

The dollar won’t stop shares

The high currency is not weighing too much on the share market if a Deutsche Bank report is right. It is one of the contradictions of the market’s “animal spirits”. In theory, a high $A should deter foreigners because of the possibility that a sharp fall will reduce the value of returns in the foreign

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Trading Day: 12th April

S&P/ASX200 Index – XJO The S&P/ASX200 is down over 1 percent or 50 points to 4920 (update: 1pm EST) after weak overnight action. The V-shaped rebound is slowing down, as exuberance gives way to reality. Winners AMP: still overbought, but bids keep coming. ANZ: uptrend is not slowing down! Consensus rules – banks are back.

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Cheap and nasty

A report by Gerard Minack at Morgan Stanley today wrestles with one of this blogger’s favourite topics, the problem that the cost of capital is taking a holiday in developed economies. This is distorting pricing and making the job of getting decent returns unusually difficult. As one chief executive commented at a presentation recently, we

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Trading Day: 11th April (updated)

I will be providing this trading update on the ASX100 daily at noon. Winners AMP: overbought in the short term, but accelerating in the medium term after a rounding bottom. BTFD ANZ: uptrend is slowing down. Watch for acceleration on external market rallies. BHP-Billiton (BHP) up up and away. Becoming overbought in the short term.

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Macquarie warns of Dutch Disease

With the Australian dollar seemingly headed for even greater heights, at least in the short term, and consumers still in the doldrums as interest rates remain tight to contain the big flows of foreign capital into mining, analysts  are waking up to a deepening of the two speed economy, which may become entrenched in the Australian economy, creating a

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Weekly Markets Analysis: 8th April

Lots of charts to look at today, first the usual fractal look at the Australian market, and then a quick look at the major components of my “Crashlist”. This is a select list of equity, FX and PM markets that I watch each evening as they open and analyse each morning before the Australian market

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Donkey, thoroughbred marry

On Monday, at an Extraordinary General Meeting, Western Australian Newspaper (WAN) shareholders will likely approve the purchase of Seven Media Group (SMG) for $4.1 billion. The Seven Group forms part of SVM, which consists of the Seven Group and Westrac (a heavy machinery servicing group).  Aside from the free-to-air (FTA) channels 7, 7two and 7mate,

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Small is beautiful

Analysts’ resources and attention mostly goes on the top 50 stocks, because they are liquid, institutions like them because they can defend their decisions, and brokers can sell their research more easily. It leads to an unhealthy relationship between the fund managers overseeing super funds and the big cartels. Cosy, comfortable, often compromised. For investors