Australian Shares

by Chris Becker Markets are starting to eschew the stimulus puts that have characterised the epic rises in stocks since the GFC as the Bank of Japan continued its own stimulus measures following the ECB last week.

Regular readers will know that MB’s current implied asset allocations matrix is very conservative.

Chris Weston, Chief Market Strategist at IG Markets Developed market equities have a heavy, soggy feel to them and on a number of metrics traders have been looking at overbought readings and decided to book a little profit.

Big iron is fading today as Dalian hits the skids down three points from the overnight low.

From Mr Weston: Hello ‘Yellen call’.

If iron ore can hold, it’s big, from UBS: Diversifieds: All else equal, our BHP & RIO earnings estimates for CY 16 would be 1053% and 135% higher respectively, under a spot scenario.

by Chris Becker The bear market rally continued overnight, but in mixed fashion with European stocks moving higher and US bourses following reluctantly as the USD tried to recover its strength.

From Deutsche today: Inside the Bank Vault this week we highlight key valuation trends in the bank sector over the last month as well as take a look at the week’s global bank regulation news.

by Chris Becker Friday saw a follow through of the risk put given to markets by the ECB with stocks launching out of their ranges and firing up a proper bear market rally.

Global equity markets did not react well to ECB President Mario Draghi’s intimation that last night’s easing measures may have been it for further cuts to the deposit rate.

Big iron ore down again today with BHP hit -1.2%, RIO -0.3% and FMG -2.2%.

By Leith van Onselen Message to self: when a real estate agent with insider knowledge is trying to sell his stake in the market, DO NOT BUY.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Asian markets have reacted fairly well to the bounce back in oil prices overnight.

From the WSJ: For some investors, the Fed’s caution might bring to mind the late 1990s.

by Chris Becker A reversal of fortune overnight as markets pre-position themselves for the ECB interest rate meeting and some more “Mario sauce” in the form of stimulus.

Chris Weston, Chief Market Strategist at IG Markets Consolidation and reflection seems to be the name of the game after a strong run in commodities and equities as credit spreads continue to tighten.

BHP is down -3.3%, RIO -3.2% and FMG -2.5% although the latter is clearly still getting some support: Dalian is off three points at this juncture.

From Reuters: Jeffrey Gundlach, chief executive officer at DoubleLine Capital, said on Tuesday the recent rally in risk assets is nearing an end.

by Chris Becker What noise shall we move on today?

Big iron ore is retracing today after the past few days of wild action as BHP falls -0.7%, RIO -1.8% and FMG -11.2% after all hammered higher at the open: Dalian is still limit up at 423 just trying to catch up to spot.

From Brian Johnson at CLSA, the best in the business: BJ notes that having significantly underperformed since the peak in April 2015 the Australian banks have rallied hard in late February/early March 2016 with the rally likely reflecting a prior degree of “over-shorting” and easier global credit conditions.