Australian Shares

The bear is back and it is angry.

by Chris Becker It was a case of slippage that ruled risk markets overnight, perhaps as the world’s elite sold off some stocks to build up the cash reserves in the wake of the Panama Papers.

From UBS, for big iron: All else equal, our BHP & RIO earnings estimates for CY 16 would be 712% and 114% higher respectively, under a spot scenario.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Asian markets moved cautiously higher today in the wake of solid US data on Friday and the oil price selloff after Saudi Arabia refused to commit to supply cuts or freezes without Iran.

Brent oil broke technical support at $38.30 this morning but stocks are holding up: My own view is that we are going retest the lows but you don’t need to be that bearish to see good downside here, $36, $32, $30 are all support levels.

by Chris Becker Instead of calling it Trading Week, its more like Yellen Week as the US stock market rebounds as a newly dovish Fed Chair casts aside inflation concerns and stronger employment growth to push out the so-called normalisation of rates just that little further.

Hello Chinese stimulus measures!

by Chris Becker A surprising surge in retail sales in Germany, coupled with a solid employment report – the only job numbers the German centric ECB cares about – meant Euro surged overnight to a near 12 month closing high, pushing down the value of European stocks.

by Chris Weston, IG We close out Q1 on a generally upbeat note, and what an absolute ride it has been.

Even though the iron ore spot price slumped yesterday, down almost 15% from its recent peak, the weaker USD trend as the Fed signals a more dovish tone has sent commodity stocks soaring.

by Chris Becker It was all about follow through overnight on risk markets as the continued reaction to a more dovish Fed stance flowed through to European stocks, which also saw an uptick in German CPI.

David Cassidy at UBS has a very interesting and thorough research note out highlighting how expensive stocks, or those with a premium price/earnings ratio (PE) over “cheap” stocks, are getting more expensive, widening the gap as investors re-rate and snap up quality at higher prices.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Fed Chair Janet Yellen’s comments overnight confirmed the significantly dovish turn seen in the last Fed statement.

The USD and two- and five-year bond yields are key assets to focus on this week, while strong focus should also be placed on the Chinese yuan.

The selloff on the ASX200 continues apace after lunch, with the miners not leading the charge for once.

by Chris Becker Australian traders are back at their desks this morning after a very long weekend that was characterised by other markets mostly remaining open, but not doing much in the main.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets The oil price and equity markets are teetering on the verge of a much larger pullback as hawkish Fed officials have lifted the US dollar this week.

by Chris Becker It was all about USD overnight which is firming against its majors sending commodities, especially oil down and hence stocks as risk markets continue to move in lockstep.

Australian banks have dragged on the ASX 200 and the note from Goldman Sachs regarding ‘funding dilemmas’ is not helping the space.

Big iron ore leading share lower today as BHP is down -1.4%, RIO -0.2%, FMG -1.5% as Dalian is down five points: Big gas is selling too with WPL -0.5%, OSH -1.3%.

by Chris Becker Market reaction to terrorist events – in Europe at least, since we don’t cover similar or worse events in other parts of the world – have slowly devolved into numbness.

Chris Weston, Chief Market Strategist at IG Markets There is an uneasy calm that descended on the world’s financial markets.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Chinese markets surged today after the government announced they were loosening requirements on margin financing, with the Shanghai Composite breaking above 3000 for the first time since 19 January.