Australian Shares

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Despite the strong performance of US equities, Asian markets got off to a rocky start after the big miss in the US ISM PMI threw some questions up around the inevitability of the December Fed rate hike.

From Credit Suisse: Australia remains unattractive to investors seeking growth but should appear very attractive to those looking for income.

by Chris Becker US stocks rallied on a poorer than expected ISM result overnight, while European unemployment came in better than expected, in a reversal double shock that saw the USD fall and European stocks sold off.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Despite disappointing Chinese data, Asian stocks seemed to put concerns of a China crash behind them as they rallied strongly through the session.

by Chris Becker Its all about currencies this week with news overnight that the IMF will add the Chinese Yuan to the reserve basket, the ECB set to ease letting the Euro fall once more, just as the US is set to tighten, while the RBA dribbles into a bucket.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets A weaker CNY midpoint fixing and a renewed selloff in Mainland Chinese markets have heightened fears that Friday’s selloff could merely be the beginning of a more significant correction for Chinese equities.

by Chris Becker US traders returned after Thanksgiving to a Black Friday with a very mixed macro picture as better than expected confidence in Europe flies in the face of another expected rate cut from the ECB, while simultaneously the case builds for a rate rise by the Fed.

From Domainfax: On Tuesday December 7, after an oversubscribed $65 million IPO, McGrath will list.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets The big drop in Chinese industrial profits plus the weakest CNY mid-point fix since 31 August appear to have set off a wave of selling in equity markets across Asia.

From UBS: US$ Earners – Reduced But Still Overweight A key portfolio theme for us has been our overweight to stocks that benefit from a weaker Australian dollar. In Australia’s case these are mostly overseas domiciled translation exposures with the US$ the dominant (and our most preferred) exposure.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Asian markets clearly ignored the pre-Thanksgiving performance of the US markets, with most markets rising strongly as concerns over the Middle East dissipated.

From Macquarie: In light of recent downward moves in the US$ gold price, the prospect of a US interest rate rise in December and the potential for a ‘normalisation’ of interest rates throughout 2016, we stress test our mid and small cap gold coverage universe.

by Chris Becker All the market action was in Europe overnight as stock and bonds were heavily bid on the rebound from the Turkey-Russia tensions, while US stocks tread water leading up to Thanksgiving season and Black Friday.

Angus Nicholson for Chris Weston, Chief Market Strategist at IG Markets Asian markets followed Europe’s lead downwards as concerns over Turkey’s downing of a Russian jet seemed to add to ongoing market concerns.

From the McGrath prospectus via the AFR: Harcourts managing director Mike Green said the comparison was designed to make McGrath, a business based in Sydney’s pricey eastern suburbs, look good.

by Chris Becker A Turkey shoot overnight translated to a wobbly session in European stocks while oil spiked alongside other commodities as US dollar strength.

From Goldman: In many ways our 2016 forecast is “déjà vu all over again.” The US stock market has mostly traded sideways during 2015 with the index hovering in a narrow  band except for a brief late summer correction.

Chris Weston, Chief Market Strategist at IG Markets What if the markets’ investment script don’t prove to be correct?

by Chris Becker A dour evening for commodities, particularly Dr Copper, set the tone for global stock indices which fell slightly as the US Dollar continued to gain strength.

From UBS: Diversifieds: All else equal, our BHP & RIO earnings estimates for CY 16 would be 70% and 45% lower, respectively, under a spot scenario.

The fourth estimate of 2015-2016 capital expenditures will be released on Thursday and expectations are for them to increase 4.5% to A$120 billion from the third estimate.

Courtesy of The Australian: Stay Underweight the bank sector says CLSA’s top-rated banking analyst, Brian Johnson.

by Chris Becker A strong recovery in stocks last week after the terrorist attacks in Paris, with the Monday morning gap down filled and then some across most bourses.

Asian markets looked to be digesting their gains this week with fairly flat trade on Friday.