Stock Market Analysis: Traders See Corporate Earnings Trump Geopolitics Again

July 23rd, 20140

* US stock markets surged on the open and held on to those gains through to the close, as once again geopolitics took a back seat to the news of better US corporate earnings.
* European stock markets rebounded overnight, snapping a three session losing streak, as traders set aside their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip, focusing on earnings and M&A.
* Asian stock markets rose again yesterday, trading around their highest levels in six years and the overseas market have given a positive lead for today.
* Commodities prices eased. Gold prices eased to $US1,308, while crude-oil held above $US104. Copper rose to US3.204c.

The Australian sharemarket closed slightly higher again yesterday, with the ASX200 up 0.1% at 5543 in light trading. The Materials and utilites sectors rose around 0.4% for the session offsetting the losses in the Consumer Staples sector down -0.5% which were the worst performing for the day, while Financials were mixed. Highlights included Western Areas up 4% on the back of the release of its June quarter production report, while LNG surged another 10%. Uranium stocks have had a good move in recent sessions.

Today the focus turns to Q2 CPI data expected to come in at 3%, which is key for the RBA interest rate outlook. BHP report production figures today and should shed some light on iron ore and coal supply and margins.

The SPI 200 futures rose 0.2% to 5512, giving a positive lead for the ASX market today, as geopolitical concerns again took a back seat to the US the corporate earnings season and M&A activity continues. The Australian dollar rose to US93.9c. The 5560 level is key near-term for the ASX200, as the markets across Europe and the US rebounded.

US Markets

US stock markets surged on the open and held on to those gains through to the close, as once again geopolitics took a back seat to the news of better US corporate earnings.

The three benchmark indexes all finished 0.5% higher for the session. The Dow Jones and the S&P500 are back at record levels, with trading volumes improving. The S&P500 is up 7.3% for the year. Eight of the ten S&P500 sectors finished higher, led by gains in the Healthcare,Tech and Energy all up 0.8%, Discretionary, Industrials and Financials sectors all rose around 0.4%, while the Staples sector fell -0.2%.

The US earnings seasons continues as focus now turns to the industrials and tech majors this week. Thirty six S&P500 stocks reported overnight (including Coke, McDonald’s, Apple and Microsoft) and there are a total of 145 stocks to report this week. Of the S&P500 companies that have reported 76% have beaten on profits, while 70% beat sales forecast. Analysts expect S&P500 stocks to report profits up 45%, earnings rose 6.2% and sales up 3.3% in the June quarter, according to Bloomberg.

In economic news the Commerce Department reported US CPI rose 0.3% in June, in line with forecasts and giving the Fed some breathing room over having to increase interest rates. Existing home sales rose in June to their highest level in eight months.

For the session Dow Jones closed up 0.4% at 17,113, the S&P500 closed up 0.5% at 1,983 and the NASDAQ closed rose 0.7% at 4,456, while on 10-year Treasury notes found support at 2.46%.

European Markets

European stock markets rebounded overnight, snapping a three session losing streak, as traders set aside their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip, focusing on earnings and M&A.

The Stoxx Europe 600 Index closed up 1.3% for the session, recouping most of the losses of the past few sessions. Trading volumes were 20% above the monthly average. Across the region the miners jumped 2.4% for their best performance in the industry groups. The rebound of stocks overnight is symptomatic of the recent retracement being due to a lack of buying rather than panic selling over the geopolitical concerns over Gaza and the Ukraine.

Traders sentiment have accepted the news of the imposition of Russian sanctions from the EU and the US and the calls for more stricter sanctions to be implemented and speculated that global growth will not be impacted significantly going forward.

The Russian market rose for the first time in a week. European Union foreign ministers meet to discuss whether to extend penalties against Russia amid outrage over the downing of Malaysia Airlines flight MH17 over Ukraine.

The London market rose on the back of the miners. The German market rebounded.

For the session the German DAX 30 closed up 1.3% at 9,734, the UK the FTSE 100 closed up 1.0% at 6,795, the French CAC 40 closed up 1.5% at 4,369, while the Spanish market closed up 1.6% at 10,648.

Asian Markets

Asian stock markets rose again yesterday, trading around their highest levels in six years and the overseas market have given a positive lead for today.

The MSCI Asia Pacific Index rose 0.6% for the session, its highest levels in six years. Across the region gainers outnumbers losers by two to one, as all ten of the industry groups finished higher for the session.

The Japanese market played catchup after a holiday, rising as trading volumes were up 10% above the monthly average. The BoJ is calling on the government to introduce measure to improve Japanese growth.

The Chinese market built on the gains from last week, as traders went bargain hunting, ahead of corporate earnings which continues to the end of August. There are eleven companies due to list this week. The Hong Kong markets finished higher.

For the session the Shenzhen Composite rose 1.2% at 2,192, the Hong Kong Hang Seng closed up 1.7% at 23,782, and the Japanese Nikkei closed up 0.8% at 15,343, while the South Korean KOSPI closed up 0.5% at 2,028.

Commodities

The Dollar Index edged higher to 80.78 on a lower Euro, and the Aussie Dollar held at US93.9c, edging towards from its highest level since November. Commodities prices eased.

Overnight the COMEX WTI Crude for AUG14 delivery eased -0.2% at $US104.40, the COMEX Copper for AUG14 delivery closed up 0.2% to 3.204, the COMEX Gold for AUG14 delivery close down -0.5% at $US1,308.50.

ASX News

AIO – Asciano the rail freight and ports operator Asciano has confirmed that it is in talks over a possible sale of a non-controlling interest in its terminal and logistics business.

ARI – Arrium the steel and mining group has accepted discounted prices on its iron ore shipments due to additional supply and tightening credit growth in China.

AZZ – Antares Energy the oil and gas company which is the target of a takeover bid, have met in Perth to vote on a proposal board shakeup.

KRS – Kresta Australia’s biggest blind and curtain maker, is urging shareholders to accept a $34.5 million takeover offer from China.

NCM – Newcrest Australia’s largest gold miner is preparing to fight a class action by shareholders hurt by a massive financial writedown in 2013.

OSH – Oil Search has confirmed the ramp up of a massive liquefied natural gas project in Papua New Guinea has fuelled a surge in Oil Search’s quarterly revenue, double the previous quarter.

SPL – A revolutionary condom featuring a gel that attacks sexually transmitted viruses has been given the go ahead for sale in Australia.

WSA – Western Areas says that FY14-End Cash Balance rose to $230.5M, $55M, while FY14 Cash Cost $2.50/Lb, 7.4% below guidance.

Market Summary

ASX – to open higher
US & UK/Europe – rebounded

ANZ 0.4%, NAB 0.5%, NWS -0.2%
AWC 4.1%, BHP 1.7%, RIO 1.9%, NEM 0.2%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Stock Market Analysis: Traders Cautious As Russia Faces Further Sanctions

July 22nd, 20140

* US stock markets rebounded from their early session losses to finish flat for the session, as once again geopolitics took a back seat to the news of better corporate earnings.
* European stock markets retraced overnight, as traders weighed their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip.
* Asian stock markets rebounded yesterday following overseas leads resuming their five session winning streak, but stocks are expected to ease today, as geopolitical concerns simmer.
* Commodities prices edged higher, Gold prices rose to $US1,314, while crude-oil rose above $US104. Copper rose to US3.196c.

The Australian sharemarket closed slightly higher yesterday, with the ASX200 up 0.1% at 5539 in light trading. The Materials sector was mostly lower, Financials were mixed. Production figures are due out from BHP tomorrow.

The SPI 200 futures eased -0.1% to 5496, giving a subdued lead for the ASX market today, as geopolitical concerns simmer and the US the corporate earnings season and M&A activity continues. The Australian dollar eased to US93.7c. The 5550 level is key near-term for the ASX200, as the markets across Europe and the US eased.

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Crude Oil prices rise on Geopolitical concerns.

US Markets

US stock markets rebounded from their early session losses to finish flat for the session, as once again geopolitics took a back seat to the news of better corporate earnings.

The three benchmark indexes all finished -0.1% lower for the session. The Dow Jones held above the 17,000 level, while the S&P500 held on to its biggest session gain since April, but has snapped its run of trading within a 1% range which lasted 62 straight sessions. The S&P500 and the Dow Jones are still trading near all-time highs.

Nine of the ten S&P500 sectors finished in the red, led by falls in the Healthcare, Discretionary and consumer Staples sectors all down around -0.5%, the Materials and Financials sectors fell -0.3%, while the Energy sector rose 0.2% on the back of higher crude prices. The CBOE VIX jumped 6% to 12.8 after it hit its highest level since April and the biggest gain since April 2013.

The US earnings seasons continues as focus now turns to the industrials and tech majors this week. Ten S&P500 stocks reported overnight and there are a total of 145 stocks to report this week. Of the S&P500 companies that have reported 76% have beaten on profits, while 70% beat sales forecast. Analysts expect S&P500 stocks to report profits up 45%, earnings rose 6.2% and sales up 3.3% in the June quarter, according to Bloomberg.

In economic news traders were comforted by President Obama saying he favoured a diplomatic solution to the crisis in the Ukraine. The US are pushing for the EU to expand its sanctions against Russia, in a move designed to break Russia’s support for the pro-Russian rebels in the Ukraine.

For the session Dow Jones closed down -0.3% at 17,051, the S&P500 closed down -0.2% at 1,973 and the NASDAQ closed eased -0.2% at 4,424, while on 10-year Treasury notes found support at 2.47%.

European Markets

European stock markets retraced overnight, as traders weighed their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip.

The Stoxx Europe 600 Index closed down -0.5% for the session, as it pared its gains of 0.8% from last week, edging towards its lowest level since mid-May. Trading volumes were down 50% on the monthly average. Across the region the automobile makers led the falls and travel and airline stocks were weaker. However stocks broadly have retraced due to a lack of buying rather than panic selling over the geopolitical concerns over Gaza and the Ukraine. Financial stocks were weaker after brokers lowered earnings forecasts for Deutsche Bank, citing operational risks in the current environment.

Traders sentiment was weighed down by the imposition of Russian sanctions from the EU and the US and the call for more stricter sanctions to be implemented at the EU meeting in Brussels tomorrow. The Russian market continued lower falling another -4%, after JP Morgan to cut the market to a sell, citing the EU and US have imposed stricter trade sanctions against Russia over the Ukrainian conflict and after the news of the downed commercial flight.

The London market eased, paring its 0.9% gain last week. The German market gave back all of the gains of the prior sessions, is trading back towards two month lows.

For the session the German DAX 30 closed down -1.1% at 9,612, the UK the FTSE 100 closed down -0.3% at 6,728, the French CAC 40 closed down -0.7% at 4,304, while the Spanish market closed down -0.4% at 10,482.

Asian Markets

Asian stock markets rebounded yesterday following overseas leads resuming their five session winning streak, but stocks are expected to ease today, as geopolitical concerns simmer.

The MSCI Asia Pacific Index edged 0.1% higher for the session. Across the region the Tech sector led the gains. The Japanese market was closed.

The Chinese market held on to Friday’s gains, as traders remain cautious ahead of corporate earnings which continues to the end of August. There are eleven companies due to list this week and there are concerns that upcoming IPOs will drain funds from the established equities. The index is down nearly -3% for the year. Last week GDP data has shown the Chinese economy has stabilised growing an annualised 7.5% in the June quarter. The Hong Kong markets finished lower.

For the session the Shenzhen Composite rose 0.1% at 2,166, the Hong Kong Hang Seng closed down -0.3% at 23,387, and the Japanese Nikkei closed at 15,215, while the South Korean KOSPI closed eased -0.1% at 2,018.

Commodities

The Dollar Index edged lower to 80.55 on a higher Euro, and the Aussie Dollar eased to US93.7c, edging back from its highest level since November. Commodities prices rose.

Overnight the COMEX WTI Crude for AUG14 delivery rose o.5% at $US104.60, the COMEX Copper for AUG14 delivery closed up 0.4% to 3.197, the COMEX Gold for AUG14 delivery close up 0.3% at $US1,314.40.

ASX News

AIO – Asciano the rail freight and ports operator Asciano has confirmed that it is in talks over a possible sale of a non-controlling interest in its terminal and logistics business.

ALZ – Australand the property developer Australand expects annual earnings to increase even if a $2.6 billion takeover offer from a Singaporean company fails.

AFI – AFI says the risk of a share market downturn is growing amid rising political unrest around the world and possible interest rate hikes, Australia’s largest listed investment fund warned after raising its annual profit.

ARI – Arrium the steel and mining group Arrium has accepted discounted prices on its iron ore shipments due to additional supply and tightening credit growth in China.

AZZ – Antares Energy the oil and gas company, says it has received an incomplete, indicative proposal to buy all of the company’s shares.

BKW – The Australian Tax Office appears to have dealt a fatal blow to a proposal to separate the cross-ownership of Brickworks and Washington H Soul Pattinson.

BLY – Standard & Poor’s has downgraded mining company Boart Longyear’s credit rating, citing ongoing poor performance.

CTX – Caltex Australia shares jumped over 4% after reporting an increase in margins.

CTY – The $209 million offered to retail veteran Solomon Lew for his stake in Country Road is significantly higher than an independent valuation of the shares.

FXJ – Australia’s richest woman Gina Rinehart appears to be mulling whether to seize control of Fairfax Media.

QFX – Nine Entertainment has become a major investor in movie and TV streaming service Quickflix.

SPL – A revolutionary condom featuring a gel that attacks sexually transmitted viruses has
been given the go ahead for sale in Australia.

Market Summary

ASX – to open flat
US & UK/Europe – eased

ANZ 1.9%, NAB 1.9%, NWS 0.9%
AWC 0.1%, BHP 0.8%, RIO 0.2%, NEM -0.1%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Stock Market Analysis: Corporate Earnings Compete With Geopolitics For Traders’ Focus

July 21st, 20140

* US stock markets rebounded the most in a month, as geopolitics took a back seat to the news of better corporate earnings and M&A activity.
* European stock markets recovered from its biggest fall in a week Friday night, as traders weighed their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip.
* Asian stock markets continued to back away from six year highs yesterday, as markets fell for the first time in five session, on the back of geopolitical concerns.
* Commodities prices consolidate, Gold prices eased to $US1,311, while crude-oil held above $US103. Copper fell to US3.185c.

The Australian S&P ASX 200 continued to edge higher, finishing the session up 0.2% at 5531, higher for the week. In economic news last week the Carbon Tax was finally been axed as the Senate voted it down and the House has repealed the Mining Tax, but the attached spending measures remain and the Senate will debate. Production figures are due out from BHP this week.

The SPI 200 futures rose 0.4% to 5485, giving a positive lead for the ASX market today, as geopolitical concerns took a back seat to the US the corporate earnings season and M&A activity. The Australian dollar jumped to US93.9c. The 5550 level is key near-term for the ASX200, as the markets across Europe and the US rebounded.

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Gold safe a haven play?

US Markets

US stock markets rebounded the most in a month, as geopolitics took a back seat to the news of better corporate earnings and M&A activity.

The three benchmark indexes all finished 1% higher for the session, recouping nearly all of the fall from the prior session. The Dow Jones recovered to back above the 17,000 level, while the S&P500 snapped its run of trading within a 1% range which lasted 62 straight sessions. The Russell 200 Small Cap Index and the Nasdaq rebounded around 1.5%.

All ten S&P500 sectors finished in the green, led by gains in the Healthcare sector up 1.6%, the Financials and Tech sectors recovered 1.2%, while the Industrials and Discretionary sectors rose 0.8%. For the week the Telecom sector performed best. The CBOE VIX eased back to 12.0 after it had surged 32% (to 14.5) its highest level since April and the biggest gain since April 2013.

The US earnings seasons continues after 40% of the S&P500 financial stocks reported last week, focus now turns to the industrials and tech majors this week. Analysts expect S&P500 stocks to report profits up 45% and sales up 3.1% in the June quarter, according to Bloomberg. Nearly 100 stocks are due to report earnings in this week.

In economic news the index of US leading indicators rose for a fifth straight month in June, fuelling optimism that the US economy is gaining momentum following the severe winter. however the Thompson Reuters preliminary consumer sentiment index fell in July to 81.3 (down from 82.5).

For the session Dow Jones closed up 0.7% at 17,100, the S&P500 closed up 1.0% at 1,978 and the NASDAQ closed jumped 1.6% at 4,432, while on 10-year Treasury notes found support at 2.48%.

European Markets

European stock markets recovered from its biggest fall in a week Friday night, as traders weighed their concerns over the downed Malaysian flight and the Ukraine and escalating conflict in the Gaza Strip, as Israel moved troops and tanks into the Hamas controlled Gaza Strip,

The Stoxx Europe 600 Index was flat for the session, as it pared its gains for the week to 0.8%, as it recovered from its lowest level since mid-May. Across the region Airlines dominated the selling, but Automobile makers led the falls, after Volvo, the world’s second biggest truck maker reported profits that disappointed. The telecom sector received a boost after Ericsson the world’s largest maker of wireless networks, jumped over 8% as it reported a 4% rise in margins.

Traders sentiment was weighed down by the imposition of Russian sanctions from the EU and the US, and the news of the downing of a Malaysian commercial flight over the Ukraine killing 298 people. The capital adequacy problems with Portuguese banks also weighed on sentiment early last week, although investors are speculating this will not lead to a systemic failure in the banking system. The Portguese bank, Banco Espiito Santo plunged -8% after the S&P cut its rating to B- (from B) with a negative outlook.

The Russian market continued lower after slumping -7% in the prior session, prompting JP Morgan to cut the market to a sell, citing the EU and US have imposed stricter trade sanctions against Russia over the Ukrainian conflict and after the news of the downed commercial flight.

The London market recovered from its biggest fall in a week, paring its weekly gain to 0.9%, but it is flat for the month. The German market gave back all of the gains of the prior sessions and in a volatile week, is trading back towards the weekly lows.

For the session the German DAX 30 closed down -0.4% at 9,720, the UK the FTSE 100 closed up 0.2% at 6,749, the French CAC 40 closed up 0.4% at 4,335, while the Spanish market closed down -0.2% at 10,527.

Asian Markets

Asian stock markets continued to back away from six year highs yesterday, as markets fell for the first time in five session, on the back of geopolitical concerns.

The MSCI Asia Pacific Index eased another -0.3% for the session. Across the region all ten industry groups finished in the red. The Materials and Utilities sectors provided support earlier in the week, as commodity prices found support and iron ore prices reached seven week highs.

The Chinese market recovered from its biggest fall in a week, with concerns that upcoming IPOs will drain funds from the established equities and the government spending will be withdrawn from government vehicles. There are twelve companies that will list in this week. The index is down nearly -3% for the year. Last week data showed the Chinese economy grew 7.5% in the June quarter, the economy grew 2% in the second quarter, up from 2.4% in the March quarter.

The Hong Kong markets pared its losses for the week. The property sector had its biggest gains in nearly two months, on speculation the government will move to address the falling house prices in 55 of 70 cities from May. The Japanese market fell, as the weakness was broad based and paring its weekly gain to 0.7%.

For the session the Shenzhen Composite rose 0.3% at 2,164, the Hong Kong Hang Seng closed down -0.3% at 23,454, and the Japanese Nikkei closed down -1.1% at 15,215, while the South Korean KOSPI closed eased -0.1% at 2,019.

Commodities

The Dollar Index edged lower to 80.52 on a higher Euro, and the Aussie Dollar jumped to US93.9c, edging back from its highest level since November. Commodities prices consolidate.

Overnight the COMEX WTI Crude for AUG14 delivery eased -0.1% at $US103.10, the COMEX Copper for AUG14 delivery closed down -1.1% to 3.185, the COMEX Gold for AUG14 delivery close down -0.6% at $US1,311.00.

ASX News

AIO – Asciano the rail freight and ports operator Asciano has confirmed that it is in talks over a possible sale of a non-controlling interest in its terminal and logistics business.

AGK – AGL has record a $561 million full year profit which is in line.

CTX – Caltex Australia has signed a $200 million deal to supply diesel fuel to Gina Rinehart’s Roy Hill iron ore mine project.

DJS – David Jones is in a trading halt, pending a court action over Woolworths (SA) takeover bid.

FMG – Fortescue has reported production and sales figures which were in line with what the company reported last week.

ILU – Iluka the mineral sands miner has suffered a 10% fall in revenue during the first half of 2014, as a fall in prices offsets increased production.

KAR – Karoon Gas the gas explorer has discovered gas in the Bowen Basin off the WA coast.

STO – Santos the energy producer has reported a 25% increase in revenue, thanks chiefly to the early start of production on the massive PNG LNG project.

SYD – Sydney Airport has delivered solid growth in 1H14 with international passengers up 4.7% and total passengers up 2.3%. The strong international result

WPL – Woodside has raised its annual production target after recording a double digit rise in second quarter sales and production.

RIO – Rio Tinto has raised its quarterly iron ore production and sales by 11% and 23%, respectively, in line with market estimates.

SIR – Sirius Resources share surged last week, after it announced it has found more nickel in WA.

Market Summary

ASX – to open higher
US & UK/Europe – higher

ANZ 1.9%, NAB 1.9%, NWS 0.9%
AWC 0.1%, BHP 0.8%, RIO 0.2%, NEM -0.1%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Weekly Market Wrap: Bulls Still Successfully “Buying Dips” In The Face Of Geopolitical Unrest

July 18th, 20140

Weekly Market Wrap

The bulls have prevailed again this week on the Aussie market, as the ASX200 successfully bounced off the 5490 level a number of times. The US markets traded at all-time highs again, as the European markets eased back, in the face of geopolitical unrest, while Asian stock markets have traded sideways. Overnight traders stepped aside as geopolitical concerns escalated in the Middle East and Ukraine and as Portuguese banks experience problems with their capital adequacy provisions, which has pushed European market down to levels not seen since April. However locally, the bulls have once again “bought the dips”, after we experienced some of the widest volatility in weeks. The Aussie market continues to trade at the top end of its monthly trading range for the year, having tested six year highs again.

US stock markets fell the most in nearly three months overnight, as geopolitics swamped the news of better corporate earnings and M&A activity. The Dow Jones cracked below the 17,000 level, while the S&P500 snapped its run of trading within a 1% range which lasted 62 straight sessions. The Russell 200 and the Nasdaq slumped around -1.4%. Fed Chair Janet Yellen spoke to Congress this week, reaffirming that the US economy still requires stimulus, saying a “high degree” of monetary policy accommodation remains appropriate. Investors are still digesting the FOMC meeting minutes that suggested “valuation metrics in some sectors appear substantially stretched-particularly for smaller firms in the social media and biotech industries, despite notable downturn in equity prices for such firms early in the year”.

The US earnings season is underway and 40% of the S&P500 financial stocks will have reported by the tonight. Some of the S&P500 companies that have reported included: Intel jumped after reporting better than expected, seeing signs of improvements in the PC refresh cycle, IBM after announcing a deal with Apple in the Enterprise Apps space, disappointed after reporting weaker revenues and a fall in sales for a ninth straight time, SanDisk posted weaker earnings, JP Morgan jumped after 2Q profits beat estimates and Goldman Sachs rose after they surprised with an increase in 2Q profits, while J&J fell after they boosted estimates for the second quarter in a row, Time Warner surged 17% after FOX made a takeover bid (which was rejected). Analysts expect S&P500 stocks to report profits up 4.7% and sales up 3.1% in the June quarter, according to Bloomberg. Over 100 stocks are due to report earnings in the next seven days.

European stock markets fell the most in a week overnight, as traders turned to risk off. News included Israel military action in the Gaza Strip, the imposition of Russian sanctions from the EU and the US, and the downing of a Malaysian commercial flight over the Ukraine. The Stoxx Europe 600 Index fell -0.9% for the session, heading back to its lowest level since mid-May. The market is down -0.6% this month due to the capital adequacy problems with Portuguese banks. The London market has fallen the most in a month, trading near April lows, due to rising inflation (1.9% in June), which along with economic growth, has raised concerns that the BoE may increase interest rates as soon as November. The German market, the biggest in the EU is also trading near its May lows, in a volatile week. Commodity prices have found some support boosting mining stocks and M&A activity increased. Investors are also speculating that the ECB could extend their plans for offering cheap money to the eurozone’s lender.

Asian stock markets have traded sideways in a volatile week. Across the region the Tech sector eased, while the Materials and Utilities sectors providing support again, as commodity prices found support, with iron ore prices reaching seven week highs. The Chinese market is trading new its highs for the week, despite concerns that upcoming IPOs will drain funds from the established equities and the government spending will be withdrawn from government vehicles. Sentiment has been supported by data showing the Chinese economy grew 7.5% in the June quarter, the economy grew 2% in the second quarter, up from 2.4% in the March quarter and Retail Sales rose 12.4% in June and industrial production rose by annual rate of 9.2% in line with expectations (up from 8.8% in May). The Japanese and Hong Kong markets are easing back from their highs for the week.

The Australian share market has pared its early session losses in four of the past five trading sessions and is trading higher for the week, as corporate earnings overshadow the global geopolitical tensions. The 5490 level is key near-term for the ASX200. In economic news the Carbon Tax has finally been axed as the Senate voted it down and the House has repealed the Mining Tax, but the attached spending measures remain and the Senate will debate. The Australian dollar last eased to US93.5c. Gold stocks have outperformed, iron ore miners Rio and Fortescue reported production figures which impressed, as gold, lithium and copper stocks all built on recent gains. The banks have been holding up as investors digest the implications of the interim Murray report, a government backed financial system inquiry which raised concerns about capital adequacy for the systemically important banks. The RBA meeting minutes revealed little change in stance, saying “the exchange rate remained high by historical standards, particularly given the declines in key commodity prices”. The yield traders got another chance to top up and have pushed Telstra to new multi-year highs.

The bulls remain in control, buying the dips and the index is again trading around six year highs. The ASX market looks to be setting up to retest of these highs, as markets across Europe and the US are drifting higher, despite the escalation in geopolitical tensions. In commodities the Crude Oil price rose back above the $US103 level, while Copper consolidated and gold bounced off the $US1,290 level, while Iron Ore prices at seven week highs.

In today’s Analyst’s Eye article we outline how you can Insure Your SMSF Super against adverse market movements. There is a old adage: Buy insurance when you can, not when you have to! By buying index PUT options to protect your Super Fund portfolio from a correction in the market, you can take advantage of the cheap option premiums currently available.

XJO Chart

The ASX market has been volatile again this week, as the index bounced off weekly lows and looks to be closing the week at the upper end of its trading range. The key pivot level near-term is around 5500 and traders will be looking to the US earnings season for some further direction next week, while keeping a close eye on the Middle East geopolitical situation. The Aussie dollar is now at US93.4. Key levels for the ASX200 index next week are around 5470 and 5560, with 5500 the key near term pivot level.

Remain attuned to the news from overseas, particularly from the Eurozone (Geopolitics), China (stimulus) and the US (Earnings). Monitor the US dollar for a guide to the future direction of commodities and equities prices. Note Goldmans has raised its S&P500 forecast target to 2050 for 2014 (up from 1900), citing rising earnings and faster economic growth.

Those investors that are looking to establish reduce the volatility in their portfolio, add some protection or to do some stock replacement, in order to either insure that they hold on to their recent gains and still get to participate in this upside move (while being protected to the downside), can still use options as the options volatility remains relatively low and warrants can be used to ramp up your dividend yields.

Contact me at D2MX Advisory on 1300 610 024 and we can help you trade, using a number of strategies that will give you the tools to navigate this market and help you improve your returns on investment.

Michael Hevern
Investment Adviser D2MX Advisory

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.


Insuring Your SMSF Super Fund – Part 24 of Super Strategies for Self-Managed Super Funds

July 18th, 20140

In today’s article we outline how you can Insure Your SMSF against adverse market movements. There is a old adage: Buy insurance when you can, not when you have to! By buying index PUT options to protect your Super Fund portfolio from a correction in the market, you can take advantage of the cheap option premiums currently available.

The time horizon for your super fund is the long-term and one of the keys to protecting your investments is to be adequately insured. Your Super Fund is there to provide you with an income into your retirement and therefore should be protected in case of an adverse movement in the stock market.

Global Overview On The Markets

The markets around the world have had a spectacular run up from their lows in mid-2012 (with the exception of China), with the German and US markets up over 50% in that time. The bull run has been fuelled by the accommodative stance from the central banks around the globe.

The European Central Bank (ECB) is now resorting to unconventional measures, such as negative deposit rates to remain accommodative, while the Fed is over half way through removing its stimulus program and there are concerns that US interest rates may rise mid to late 2015. The Chinese central bank is in the process of trying to orchestrate a soft landing for their economy and the Bank of Japan is trying to stoke the fires of inflation in that economy. There are geopolitical tensions in the Middle East and news of debt concerns in Portugal.

Markets may well continue to head higher into the end of the 2014 calendar year, on the expectation that central bankers will keep economies expanding. However many markets are due for a correction at the very least. For example the US markets have risen continuously, with the S&P 500 not having a 10% correction in over two years.

Portfolio Insurance Using Index Put Options

One strategy for protecting your SMSF Super Fund portfolio against adverse market movements is through the use of index put options. Index put options are used by investors who anticipate a market pullback or are generally concerned about a possible declining market. The use of index options avoids expensive transaction costs and avoids the need to liquidate holdings which could trigger a tax gain/loss event. Additionally, in the event that the investors’ concerns over a falling market prove unfounded, the portfolio can continue to participate and appreciate in the rising market.

Strategy Implementation

To insure your SMSF Super Fund portfolio with index put options, you need to first have a portfolio which is highly correlated to the index. For instance, if the portfolio consists of mainly the Top 200 companies on the ASX, then you would use S&P ASX 200 (XJO) Index Options.

We calculate how many contracts to buy to fully protect the portfolio using the following formula:

No. Index Puts Required = Value of Holding / (Index Level x Contract Multiplier)

Trade Example

Imagine an investor with a well diversified Super Fund portfolio of stocks from within the S&P/ASX 200, with a combined value of $550,000. This investor is concerned the global economic recovery may falter and the upcoming quarterly earnings that are currently underway may disappoint. The investor can insure their holdings by purchasing slightly out-of-the-money S&P ASX 200 Index (XJO) Puts expiring in September (two months away).

The current level of the S&P ASX200 is 5540 and the 5475 XJO SEP14 put contracts are trading at $0.78 each. Note the downside breakeven for this Put option is when the XJO is at 5400.

S&P ASX 200
CHART: S&P ASX 200 (the yellow region indicates Super Fund portfolio protection).

The XJO options have a contract multiplier of $10. Therefore the number of contracts needed to fully protect his holding is: $550,000/(5475 x $10) = 10 contracts.

Total cost of the options is: 10 x $0.78 x 1,000 = $7,800 (or 1.4% of portfolio value for protection of the portfolio for 2 months, if the S&P ASX200 falls below 5475).

Payoff Diagram
S&P ASX 200 (XJO) Index Put Payoff for SEP14 XJO 5475 Puts
CHART: S&P ASX 200 (XJO) Index Put Payoff for SEP14 XJO 5475 Puts

As can be seen from the payoff diagram above, should the market retreat, the value of the put options rises, offsetting the losses taken by the Super Fund portfolio. In cases where the investor is wrong about the direction of the market, their holding will continue to appreciate along with the market’s rise. However there is a downside in that if the market stays flat, then there will be a loss equal to the premium paid for the put insurance (the index put option).

Note: The example above example assumes full correlation with beta of 1.0 between the portfolio and the index and transaction costs are not included in the calculations.

If the index pulled back 5% from the 5540 level by index options expiry:

The index would be trading at around 5265 and the SEP14 5450 XJO Index Put option would be worth $2.15, while the portfolio would be devalued to $550,000*(1-0.05)= $522,500, so the total position would be at breakeven i.e. $2.15 *1000*$10 + 526,500 = 548,000 (of course you have initially paid the $7,800 for the insurance using the index put options).

The Trade

You can use index put options as insurance protection in order to protect your SMSF Super Fund portfolio. However you need to be consistently correct in your view about the market direction as it would be detrimental to your portfolio performance if you outlaid 1.4% of your portfolio every two months and the market either trades sideways or rose modestly.

You do have the opportunity to close the option position at any time before expiry if your view of the market changes and there are a number of strategies that you can use to reduce the cost of the insurance.

Utilising the Index Collar Strategy reduces the cost of protection and allows the investor to finance the purchase of the index put options by simultaneously selling index call options. This strategy is also known as the Index Collar and will be discussed in later articles. Alternatively you can use a Put Spread strategy to reduce costs.

If you want to take advantage of the historically low volatility of options to implement insurance over your SMSF Super Fund portfolio, then the index put options are an excellent strategy that can be used to protect your investment. Contact us at D2MX Advisory on 1300 610 024 and we can help you trade using this strategy.

So you can do your homework and select the investment strategy that suits you or you can short cut the process by referring to a professional for assistance and we at D2MX Advisory can help. We here at D2MX Advisory can assist you with taking action to invest to energise your SMSF super fund and we have strategies designed specifically to take advantage of capital growth, and to generate consistent income and returns, that are scalable, contact us on 1300 610 024. If you would like some additional information on the fundamentally sound stocks that should be in your portfolio email me at advisory@d2mx.com.au.

Michael Hevern
Investment Adviser – D2MX Advisor

Also in this series:

Part 1: Boosting Dividend Yield in Your Self-Managed Super Fund (SMSF)
Part 2: Compounding in Your Self-Managed Super Fund
Part 3: Post-Election Investment Opportunities
Part 4: Simple Breakout Finder for Your Self Managed Super Fund
Part 5: Simple Trade Signal Setups for Your SMSF
Part 6: Protecting Your Self Managed Super Fund
Part 7: Investing For Profit in Your Self-Managed Super Fund
Part 8: Tracking Profits in Your Self-Managed Super Fund
Part 9: Investing in Dividends in Your Self-Managed Super Fund
Part 10: Franking Credits in Your Self-Managed Super Fund
Part 11: Accumulating Dividends in Your Self-Managed Super Fund
Part 12: Margin of Safety and Dividends in Your Self-Managed Super Fund (SMSF)
Part 13: Boosting Dividends Using Capped Instalment Warrants in Your SMSF
Part 14: Protecting Hard Fought Gains in Your SMSF
Part 15: Yielding Results for Your Super Fund Investing
Part 16: Staying On The Right Side of the Market in Your Super Fund Investing
Part 17: Profiting From The Downside In Your Super
Part 18: Dividend Capture Collar in Your SMSF
Part 19: Boosting Bank Yields in Your Self-Managed Super Fund (SMSF)
Part 20: Generating Regular Income in Your SMSF
Part 21: SMSF Super Yielder Strategy
Part 22: Investing In Protected Positions in Your SMSF
Part 23: Energising Your SMSF

This report was prepared by Michael Hevern. It represents the views and opinions of the author. It is not intended for use by any third party, without the approval of Michael Hevern. While this report is based on information from sources which are considered reliable, its accuracy and completeness cannot be guaranteed. Any opinions expressed reflect my judgment at this date and are subject to change. Contracting Hevern Pty Ltd is a Corporate Authorised Representative No. 408868 of D2MX Pty Limited ABN 98 113 959 596, AFSL No. 297950 (D2MX), and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd. Opinions, conclusions and other information expressed in this report are not given or endorsed by D2MX, unless otherwise indicated. The information contained in this Report is General Advice only, as the information or advice given does not take into account your particular objectives, financial situation or needs.
Disclaimer: Using leverage to invest can be a two edged sword, as it can magnify your returns when the stock price rises, but will in turn magnify the losses if the trade does not perform as expected.


Stock Market Analysis: “Risk-off” Due To Geopolitical Escalation In Middle East & Ukraine

July 18th, 20140

* US stock markets fell the most in nearly three months, as geopolitics swamped the news of better corporate earnings and M&A activity.
* European stock markets fell the most in a week overnight, as traders turned to risk off, on the back of military action in the Gaza Strip, the imposition of Russian sanctions from the EU and the US, and then extended losses on the news of the downing of a Malaysian commercial flight over the Ukraine.
* Asian stock markets eased from six year highs yesterday, but expect selling today.
* Commodities prices higher, Gold prices rose to $US1,316, while crude-oil rose above $US103. Copper rose to US3.221c.

The Australian S&P ASX 200 pared its early session gains finishing the session up 0.1% at 5522. The gains in the gold miners and the insurers, were offset by falls in energy stocks, while the banks drifted. In economic news the Carbon Tax has finally been axed as the Senate voted it down and the House has repealed the Mining Tax, but the attached spending measures remain and the Senate will debate. Production figures are due out from BHP next week.

The SPI 200 futures fell -0.6% to 5453, giving a negative lead for the ASX market today, as geopolitical concerns overshadowed the US the corporate earnings season and M&A activity. The Australian dollar last eased to US93.5c. The 5490 level is key near-term for the ASX200, as the markets across Europe and the US sold off in a risk off move.

US Markets

US stock markets fell the most in nearly three months, as geopolitics swamped the news of better corporate earnings and M&A activity.

The three benchmark indexes all finished at least -1% lower for the session. The Dow Jones cracked below the 17,000 level, while the S&P500 snapped its run of trading within a 1% range which lasted 62 straight sessions. The Russell 200 Small Cap Index and the Nasdaq slumped around -1.4%. In economic news, home constructions unexpectedly fell in June to a nine month low.

All ten S&P500 sectors finished in the red, led by falls in the Industrials and Energy sectors slumping -1.6%, Financials and Tech sectors slumped -1.4% and the Consumer and Materials sectors fell around -0.6%. The CBOE VIX surged 32% to 14.5 its highest level since April and the biggest gain since April 2013, while trading volumes were 15% above the monthly average.

The US earnings seasons continues and 40% of the S&P500 financial stocks will have reported by the tomorrow. Twenty four S&P500 companies reported overnight, with Google reporting better than expected, SanDisk posted weaker earnings, while IBM reporting weaker revenues and a fall in sales for a ninth straight time. Analysts expect S&P500 stocks to report profits up 45% and sales up 3.1% in the June quarter, according to Bloomberg. Over 130 stocks are due to report earnings in the next two weeks.

For the session Dow Jones closed down -0.9% at 16,976, the S&P500 closed down -1.2% at 1,958 and the NASDAQ closed down -1.4% at 4,363, while on 10-year Treasury notes slumped to 2.46%.

European Markets

European stock markets fell the most in a week overnight, as traders turned to risk off, on the back of Israel military action in the Gaza Strip, the imposition of Russian sanctions from the EU and the US, and then extended losses on the news of the downing of a Malaysian commercial flight over the Ukraine.

The Stoxx Europe 600 Index fell -0.9% for the session, heading back to its lowest level since mid-May. Traders have sold this market down -0.6% this month on the back of the capital adequacy problems with Portuguese banks, although they are speculating this will not lead to a systemic failure in the banking system. Across the region selling was wide spread, on the news that Ukrainian rebels shot down a Malaysian jet carrying 295 people (27 Australians). The Portguese bank, Banco Espiito Santo plunged -8% after the S&P cut its rating to B- (from B) with a negative outlook.

The Russian market slumped -7%, after the news of the downed commercial flight. The EU and US have imposed stricter trade sanctions against Russia over the Ukrainian conflict.

The London market fell the most in a week, erasing the gains for the month; BP fell the most on the FTSE, down -2%. The German market gave back all of the gains of the prior session and in a volatile week, is trading back towards the weekly lows.

For the session the German DAX 30 closed down -1.1% at 9,753, the UK the FTSE 100 closed down -0.7% at 6,738, the French CAC 40 closed down -1.2% at 4,316, while the Spanish market closed down -1.2% at 10,542.

Asian Markets

Asian stock markets eased from six year highs yesterday, but expect weakness today.

The MSCI Asia Pacific Index eased -0.1% for the session. Across the region the Tech sector eased, while the Materials and Utilities sectors provided support again, as commodity prices found support. Iron ore prices reached seven week highs.

The Chinese market fell the most in a week, due to concerns that upcoming IPOs will drain funds from the established equities and the government spending will be withdrawn from government vehicles. There are twelve companies that will list in the next week. The index is down -3% for the year. The Chinese economy grew 7.5% in the June quarter, the economy grew 2% in the second quarter, up from 2.4% in the March quarter. The Japanese and Hong Kong markets finished flat.

For the session the Shenzhen Composite eased -0.6% at 2,157, the Hong Kong Hang Seng closed down -0.1% at 23,520, and the Japanese Nikkei closed down -0.1% at 15,370, while the South Korean KOSPI closed up 0.4% at 2,020.

Commodities

The Dollar Index edged lower to 80.51 on a higher Euro, and the Aussie Dollar eased to US93.5c, edging back from its highest level since November. Commodities prices edged higher.

Overnight the COMEX WTI Crude for AUG14 delivery up 2.0% at $US103.20, the COMEX Copper for AUG14 delivery closed up 0.2% to 3.221, the COMEX Gold for AUG14 delivery close rose 1.3% at $US1,136.90.

ASX News

AGK – AGL has record a $561 million full year profit which is in line.

CTX – Caltex Australia has signed a $200 million deal to supply diesel fuel to Gina Rinehart’s Roy Hill iron ore mine project.

DJS – David Jones is in a trading halt, pending a court action over Woolworths (SA) takeover bid.

FMG – Fortescue has reported production and sales figures which were in line with what the company reported last week.

ILU – Iluka the mineral sands miner has suffered a 10% fall in revenue during the first half of 2014, as a fall in prices offsets increased production.

KAR – Karoon Gas the gas explorer has discovered gas in the Bowen Basin off the WA coast.

WPL – Woodside has raised its annual production target after recording a double digit rise in second quarter sales and production.

RIO – Rio Tinto has raised its quarterly iron ore production and sales by 11% and 23%, respectively, in line with market estimates.

SIR – Sirius Resources share surged after it announced it has found more nickel in WA.

Market Summary

ASX – to open lower
US & UK/Europe – lower

ANZ -0.8%, NAB -0.8%, NWS -0.7%
AWC -0.8%, BHP -2.0%, RIO -1.8%, NEM 0.9%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Stock Market Analysis: Markets Rise On Earnings and M&A

July 17th, 20140

* US stock markets rebounded on the back of better corporate earnings, M&A activity and stable Chinese growth data.
* European stock markets rose the most in over three months overnight, as traders turned to corporate earnings and Chinese data, as the concerns over Portuguese lenders eased.
* Asian stock markets eased yesterday after growth data from China came in line with expectations. Expect some bargain hunting today following strong sessions overnight.
* Commodities prices higher, Gold prices rose to $US1,299, while crude-oil rose above $US101. Copper fell to US3.215c.

The Australian S&P ASX 200 pared its early session losses for a second day finishing the session up 0.1% at 5518. Falls in the banks were offest by the iron ore miners after Rio and Fortescue reported production figures, as the Materials sector outperformed rising 0.8% as commodity prices found some support after the Chinese growth data showed the Chinese economy grew 7.5% in the June quarter. In economic news housing starts for the March quarter rose 8.7% and up 12.2% on year, while house prices rose 12.8% and apartment rose 4.2%.

Remember it is index options expiry this morning so expect a flurry of activity early. The Carbon Tax will be voted on by the Senate today and production figures are due out from BHP next week.

The SPI 200 futures rose 0.2% to 5484, giving a positive lead for the ASX market today, as US the corporate earnings season continues and M&A activity heats up. The Australian dollar last eased to US93.6c. The 5550 level is key near-term for the ASX200, as the markets across Europe and the US continue higher.

temp
The Japanese market is steadily rising, as the BoJ remains accommodative.

US Markets

US stock markets rebounded on the back of better corporate earnings, M&A activity and stable Chinese growth data.

Fed Chair Janet Yellen spoke to Congress again overnight, reaffirming that the US economy still requires stimulus, saying a “high degree” of monetary policy accommodation remains appropriate. Investors are still digesting the FOMC meeting minutes, that suggested “valuation metrics in some sectors appear substantially stretched-particularly for smaller firms in the social media and biotech industries, despite notable downturn un equity prices for such firms early in the year”.

The three benchmark indexes all finished 0.4% higher for the session. The Dow Jones rose to a new all-time high, while the S&P500 continued its run of trading within a 1% range as it has done for the past 62 sessions. The Russell 200 Small Cap Index eased another -0.2% and the Dow Jones Internet Index fell another -0.5%. In economic news, US industrial production rose 0.2% in June, capping the strongest quarter in nearly four years.

Seven of the ten S&P500 sectors finished in the green, led by gains in the Energy sector jumping 1.5%, Consumer Staples rebounded 0.9% and the Materials sector rose 0.7% for the session, while the Healthcare and Financials sectors fell over -0.2%. The Home Builders rose 1.9%, as homebuilder confidence rose in July rose more than forecast to the highest level in six months. The CBOE VIX eased to 11.0, but is still around its lowest level since February 2007.

The US earnings seasons is underway and 40% of the S&P500 financial stocks will have reported by the end of this week. Fourteen S&P500 companies reported overnight, with Intel up 9.3% after seeing signs of improvements in the PC refresh cycle, IBM rose after announcing a deal with Apple in the Enterprise Apps space. Time Warners surged 17% after FOX made a takeover bid (which was rejected). Analysts expect S&P500 stocks to report profits up 5% and sales up 3% in the June quarter, according to Bloomberg. Over 130 stocks are due to report earnings in the next two weeks.

For the session Dow Jones closed up 0.4% at 17,138, the S&P500 closed up 0.4% at 1,981 and the NASDAQ closed up 0.2% at 4,425, while on 10-year Treasury notes were closed eased to 2.53%.

European Markets

European stock markets rose the most in over three months overnight, as traders turned to corporate earnings and Chinese data, as the concerns over Portuguese lenders eased.

The Stoxx Europe 600 Index jumped 1.3% for the session, rebounding from its lowest level since mid-May. Traders bought up the banks, as they speculate the problems with Portuguese banks will not lead to a systemic failure in the banking system. Across the region banks and miners rose and M&A activity increased. Investors also speculated that the ECB could extend their plans for offering cheap money to the eurozone’s lender.

The Portuguse market jumped 3.1%, after a news report said that Banco Espirito Santo would raise EUR2 billion to sure up its balance sheet; the bank’s shares surged 20% on the news.

The London market rebounded on the back of the miners, despite rising inflation (1.9% in June), which along with economic growth, which has raised concerns that the BoE may increase interest rates as soon as November. The German market recouped all of the losses from the prior session and is trading back towards all time highs again, despite Germany´s key ZEW survey of investor sentiment falling for a seventh straight month.

For the session the German DAX 30 closed up 1.4% at 9,859, the UK the FTSE 100 closed up 1.1% at 6,784, the French CAC 40 closed up 1.5% at 4,369, while the Spanish market closed up 1.8% at 10,668.

Asian Markets

Asian stock markets eased yesterday after growth data from China came in line with expectations. Expect some bargain hunting today following strong overseas sessions overnight.

The MSCI Asia Pacific Index eased -0.1% for the session. Across the region the Tech sector eased, while the Materials and Utilities sectors provided support, as commodity prices found support. The improved risk sentiment was evident in a softer yen, as the US dollar pushed higher against the safe haven currency.

The Chinese economy grew 7.5% in the June quarter, the economy grew 2% in the second quarter, up from 2.4% in the March quarter. Retail Sales rose 12.4% in June and industrial production rose by annual rate of 9.2% in line with expectations (up from 8.8% in May).

The Chinese market eased for the first time in a week, as growth data came in line and despite concerns that upcoming IPOs will drain funds from the established equities. Economic growth accelerated for the first time in three quarters, as the government have increase its spend on railway infrastructure and reduced the reserve requirements for for some lenders to assist the property market. In corporate earnings, analysts are forecasting earnings will rise 10.6% in the 1H14 (compared to 8.1% growth in the first quarter) in the consumer staples and utilities sectors, according to Bloomberg. The index is still down around -3% for the year.

The Japanese market finished flat on the back of a weaker yen which supported the export stocks, as the BoJ kept its stimulus steady and left rates on hold. In Hong Kong the market continued to recover from its biggest weekly fall in two months.

For the session the Shenzhen Composite eased -0.2% at 2,170, the Hong Kong Hang Seng closed up 0.3% at 23,523, and the Japanese Nikkei closed down -0.1% at 15,379, while the South Korean KOSPI closed up 0.1% at 2,013.

Commodities

The Dollar Index edged higher to 80.53 on a lower Euro, and the Aussie Dollar eased to US93.6c, edging back from its highest level since November last week. Commodities prices edged higher.

Overnight the COMEX WTI Crude for AUG14 delivery up 1.2% at $US101.20, the COMEX Copper for AUG14 delivery closed fell -1.2% to 3.215, the COMEX Gold for AUG14 delivery close rose 0.2% at $US1,299.80.

ASX News

CTX – Caltex Australia has signed a $200 million deal to supply diesel fuel to Gina Rinehart’s Roy Hill iron ore mine project.

FMG – Fortescue has reported production and sales figures which were in line with what the company reported last week. The FY15 production guidance of 155 to 160mt is in line, with the average realised price for the June quarter at $US82/mt (compared to $US103/t in the prior quarter).

ILU – Iluka the mineral sands miner has suffered a 10% fall in revenue during the first half of 2014, as a fall in prices offsets increased production.

PRR – Prima BioMed the Australian drug producer, has been granted a US patent for its ovarian cancer therapy.

QAN – Qantas has welcomed a decision to raise foreign investments caps on the airline, but says it still wants to see the restrictions removed completely.

RIO – Rio Tinto has raised its quarterly iron ore production and sales by 11% and 23%, respectively, in line with market estimates.

SIR – Sirius Resources share surged after it announced it has found more nickel in Western Australia.

Market Summary

ASX – to open higher
US & UK/Europe – higher

ANZ 0.2%, NAB 0.4%, NWS -0.2%
AWC 1.2%, BHP 1.9%, RIO 1.9%, NEM 2.2%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Stock Market Analysis: Markets Ease On Concerns Over Valuations

July 16th, 20140

* US stock markets retraced on the back of the comments from the Fed over valuations in some momentum stocks and despite better bank corporate earnings.
* European stock markets fell overnight, after traders turned to corporate earnings.
* Asian stock markets rose for a second session yesterday after an upbeat overnight session in the US, but expect weakness today ahead of growth data from China.
* Commodities prices lower, Gold prices slumped to $US1,297, while crude-oil fell below $US100. Copper fell to US3.25c.

The Australian S&P ASX 200 finished the session flat at 5511 as banks fell, after a government backed financial system inquiry raised concerns about capital adequacy for the systemically important banks. The RBA meeting minutes revealed little change in stance, saying “the exchange rate remained high by historical standards, particularly given the declines in key commodity prices”. The Energy, Materials and Telecom sectors rose 0.2%, while the Financials, Tech and Industrial sectors fell around -0.3% for the session. Production figures are due out from the big miners over the next few days.

The SPI 200 futures eased to 5467, giving a negative lead for the ASX market today, as US the corporate earnings season gets underway. The Australian dollar last traded eased to US93.7c. The 5500 level is key near-term for the ASX200, as the markets across Europe and the US edged lower.

temp
The Chinese economy is in the spotlight with second-quarter growth data, due out today.

US Markets

US stock markets retraced on the back of the comments from the Fed over valuations in some momentum stocks and despite better bank corporate earnings.

Fed Chair Janet Yellen spoke to Congress overnight, but the market reaction came from the comments in the FOMC meeting minutes, that suggested “valuation metrics in some sectors appear substantially stretched-particularly for smaller firms in the social media and biotech industries, despite notable downturn un equity prices for such firms early in the year”.

The three benchmark indexes all finished weaker for the session. The Dow Jones held around all-time high while the S&P500 continued its run of trading within a 1% range as it has done for the past 61 sessions, the longest such stretch since 1995.

Six of the ten S&P500 sectors finished in the red, led by gains in the Healthcare and Staples sectors down -0.9%, the Discretionary, and Energy sectors fell around -0.3% l, while the Financials sector rose over 0.7% on the back of better bank earnings. The Dow Internet index fell -0.7% and the Biotech index slumped -2.3% after the Fed comments. The CBOE VIX rose to 11.9, after rising 20% last week trading up from its lowest level since February 2007.

The US earnings seasons is underway and 40% of the S&P500 financial stocks will have reported by the end of this week. JP Morgan jumped after 2Q profits beat estimates and Goldman Sachs rose after they surprised with an increase in 2Q profits, while J&J fell after they boosted estimates for the second quarter in a row.

In economic news, US retail sales rose by 0.2% in June, (below the forecasts of a 0.6% gain), while import prices rose 0.1% in June but export prices fell by 0.4%.

Goldmans has raised its S&P500 forecast target to 2050 for 2014 (up from 1900), citing rising earnings and faster economic growth. Analysts expect S&P500 stocks to report profits up 5% and sales up 3% in the June quarter, according to Bloomberg. Over 130 stocks are due to report earnings in the next two weeks.

For the session Dow Jones closed up 0.1% at 17,060, the S&P500 closed down -0.2% at 1,973 and the NASDAQ closed down -0.5% at 4,416, while on 10-year Treasury notes were closed rose to 2.55%.

European Markets

European stock markets fell overnight, after traders turned to corporate earnings.

The Stoxx Europe 600 Index fell -0.6% for the session, heading back towards its lowest level since mid-May. Traders are speculating the problems with Portuguese banks will not lead to a systemic failure in the banking system. Across the region Tobacco stocks fell as M&A activity produced lower equity valuations than had been speculated upon. Investors also speculated that the ECB could extend their plans for offering cheap money to the eurozone’s lender.

The London market slid for the first session in three, as UK consumer prices rising 1.9% in June (up from 1.5%) and this inflation figure along with economic growth has raised concerns that the BoE may increase interest rates as soon as November. The German market gave back nearly all of the gains from the prior session and resumed its weakness of the past four sessions, after Germany´s key ZEW survey of investor sentiment fell for a seventh straight month.

For the session the German DAX 30 closed down -1.0% at 9,719, the UK the FTSE 100 closed down -0.5% at 6,710, the French CAC 40 closed down -0.6% at 4,305, while the Spanish market closed down -1.2% at 10,475.

Asian Markets

Asian stock markets rose for a second session yesterday after an upbeat overnight session in the US, but expect weakness today ahead of growth data from China.

The MSCI Asia Pacific Index rose another 0.4% for the session. Across the all ten industry groups finished in the green. The improved risk sentiment was evident in a softer yen, as the US dollar pushed higher against the safe haven currency.

The Chinese market rose following the biggest gain in a month, as the government pledged to buy alternative energy cars targeting 30% of the fleet to be electric car. Today’s report on Chinese second quarter growth data, is expected to come out at 7.4% on year, in line with the level of growth seen in the first quarter. In corporate earnings, analysts are forecasting earnings will rise 10.6% in the 1H14 (compared to 8.1% growth in the first quarter) in the consumer staples and utilities sectors, according to Bloomberg. Traders also speculated that the government will loosen property restrictions in order to stimulate the economy. The index is still down around -3% for the year.

The Japanese market rose on the back of a weaker yen which supported the export stocks, as the BoJ kept its stimulus steady and left rates on hold. In Hong Kong the market continued to recover from its biggest weekly fall (of 1.3%) in two months.

For the session the Shenzhen Composite closed up another 0.5% at 2,182, the Hong Kong Hang Seng closed up 0.5% at 23,459, and the Japanese Nikkei closed up 0.9% at 15,359, while the South Korean KOSPI closed up 0.9% at 2,012.

Commodities

The Dollar Index edged higher to 80.39 on a lower Euro, and the Aussie Dollar eased to US93.7c, edging back from its highest level since November last week. Commodities prices edged lower.

Overnight the COMEX WTI Crude for AUG14 delivery fell at -1.2% $US99.96, the COMEX Copper for AUG14 delivery closed eased -0.1% to 3.25, the COMEX Gold for AUG14 delivery close slumped -0.5% at $US1,297.10.

ASX News

ALL – Aristocrat is benefiting from the from the positive sentiment from Aussie punters who kept bookmakers busy during the World Cup, placing over $287 million in the month long tournament.

BIG_4 – The Big four banking shares have dropped as investors digest the implications of the interim Murray report.

BRU – Buru Energy reported an operational update which was disappointing as key catalysts were delayed. Ungani ramp production ramp-up challenges and management uncertainty, have resulted in DB downgrading it fo a Hold with its price target -45% (to $1.30).

BPT – Woodside Petroleum will take a majority stake in Beach Energy’s exploration project in western Tanzania.

DJS – DJs shareholders have voted in favour of a $2.2 billion takeover offer from South African retailer Woolworths Holdings.

FMG – Fortescue Metals says it has produced at a record 160 million tonne a year rate during June quarter, as it continues its large volumes despite a weaker iron ore price.

GNC – GrainCorp the grains marketer has bought a 10% in one of its largest customers, an Egyptian flour miller.

OZL – OZ Minerals raised its full year copper production target but warned its gold output may be at the bottom of its forecast range.

SPN – SP AusNet and other parties agreed to settle a class action yesterday morning, granting survivors of Victoria’s Black Saturday bushfires will receive nearly $500 million in the largest class action settlement in Australian history.

WES – Wesfarmer the owner of the supermarket chain Coles, is taking on the big four banks by offering customers loans and other personal finance products at the same time as they buy their groceries.

SFR – Sandfire Resources will benefit from a strong copper price and market outlook, and is UBS’s preferred copper play, citing themes of low inventories, recovering demand and supply tightness driving copper back above four month highs.

TCL – Transurban the toll road owner has raised revenue by over 13%, thanks to strong growth on its Sydney network.

WHC – Whitehaven the NSW miner pleased investors with news it had sold 22% more coal in 2013/14 than the previous year and reached record production levels.

Market Summary

ASX – to open lower
US & UK/Europe – lower

ANZ -1.7%, NAB -0.4%, NWS 0.4%
AWC -0.6%, BHP 0.3%, RIO 1.2%, NEM -2.5%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Stock Market Analysis: Stocks Rise As US Earnings Season Begins

July 15th, 20140

* US stock markets rebounded on the back of the start of corporate earnings, paring the worst weekly losses since April. Goldmans has raised its S&P500 forecast target to 2050 for 2014 (up from 1900), citing rising earning s and faster economic growth.
* European stock markets recovered overnight, after their biggest weekly fall since March, as geopolitical concerns and Portuguese debt issues were set aside, with traders turning to corporate earnings.
* Asian stock markets rose yesterday after recording their first weekly loss in nine weeks.
* Commodities prices eased, Gold prices slumped to $US1,308, while crude-oil held at $US101. Copper rose to US3.25c and Iron Ore prices held around $US96.00.

The Australian share market continued to edge higher yesterday, towards the top end of its monthly trading range, as the ASX200 index rose 0.5% to 5511. The RBA meeting minutes and New Car Sales figures will be relaeased today. Production figures are due out from the big miners in the next week.

The “buy on the dip” strategy is being rewarded again this week, as dividends from the banks need to be redeployed near term as the major banks paid their shareholders.

The SPI 200 futures are up 0.4% at 5491, giving another positive lead for the ASX market today, as US traders started on a positive note as the corporate earnings season gets underway. The Australian dollar last traded higher to US93.9c. The 5530 level is key near-term for the ASX200, as the markets across Europe and the US continued higher. Look to gold stocks to be a focus again today, after the precious metal slumped overnight.

temp
Silver prices are at key levels, closing above the 50 day resistance level for the first time in eighteen months.

US Markets

US stock markets rebounded on the back of the start of corporate earnings, paring the worst weekly losses since April. Goldmans has raised its S&P500 forecast target to 2050 for 2014 (up from 1900), citing rising earning s and faster economic growth.

The three benchmark indexes all finished the session up another 0.6%. The Dow Jones touched an all-time high after recovering from its biggest drop in three months last week. The S&P500 continued its run of trading within a 1% range as it has done for the past 60 sessions, the longest such stretch since 1995. The S&P500 has not had a -10% fall for over two years. The Russell 2000 Small Cap index recovered after falling -4% last week, the worst such fall in two years.

Eight of the ten S&P500 sectors finished in the green, led by gains in the Energy sector up 1.0%, the Tech, Financials and Industrials sectors rose over 0.6%, other sectors rice around 0.3%, while the Utilities sector closed down -1.2% and the Materials sector closed down -0.1%. The CBOE VIX eased to 11.8, after rising 20% last week trading up from its lowest level since February 2007. Citigroup jumped 3% after reporting better-than-expected trading revenues, lower credit costs and profits.

The US earnings seasons is underway with reports from banking majors including JPMorgan Chase and Goldman Sachs, as well as Johnson & Johnson, Yahoo, Intel, IBM and General Electric, 40% of the S&P500 financial stocks will have reported by the end of this week. Analysts expect S&P500 stocks to report profits up 5% and sales up 3% in the June quarter. Over 130 stocks are due to report earnings in the next two weeks. Analysts are forecasting earnings in the past quarter have risen 5%, according to Bloomberg.

The Gold prices slumped overnight, but Gold is seasonally strong in the July to end-October, with the Gold price having risen 11 of the past 13 years at an average of 6%, while Gold Miners have made double digit moves in 9 of the past 13 years.

Fed Chair Janet Yellen will speak to the Congress later this week. The US economy is recovering with May Core Inflation at 2%, Unemployment at 6.1% and 10 Year Yields at 2.55%.

For the session Dow Jones closed up 0.7% at 17,055, the S&P500 closed up 0.4% at 1,977 and the NASDAQ closed up 0.6% at 4,440, while on 10-year Treasury notes were closed rose to 2.55%.

European Markets

European stock markets recovered overnight, after their biggest weekly fall since March, as geopolitical concerns and concerns over Portuguese debt issues were set aside, with traders turning to corporate earnings.

The Stoxx Europe 600 Index rose 0.9% for the session, paring the loses of last week of -3.2%, the biggest drop since March, when it closed at the lowest level since mid-May. Traders are speculating the problems with Portuguese banks will not lead to a systemic failure in the banking system. Across the region all 19 industry groups finished in the green, led by the Chemicals and Banking sectors.

Investors also speculated that the ECB could extend their plans for offering cheap money to the eurozone’s lender. Eurozone industrial production contracted -1.1% in May, less than expected, while output rose a revised 0.7% in April.

The London market rose the most in two weeks on the back of the industrial production figures, paring last week’s -2.6% of losses, the largest weekly loss since March. The German market has closed higher after having traded lower three of the past four sessions.

For the session the German DAX 30 closed up 1.2% at 9,783, the UK the FTSE 100 closed up 0.8% at 6,746, the French CAC 40 closed up 0.8% at 4,350, while the Spanish market closed up 0.6% at 10,606.

Asian Markets

Asian stock markets rose yesterday after recording their first weekly loss in nine weeks. The MSCI Asia Pacific Index rose 0.4% for the session, recovering from last week’s -1.1% loss. Across the region the gains were led by the Telecom and Healthcare sectors, as all ten industry groups finished in the green.

In commodity news Gold prices slumped overnight, Copper is up 13% from the March lows and China the world’s largest copper consumer, has the government taking measures to avoid a “hard landing” in that economy.

The Chinese market rose the most in a month, as the government pledged to buy alternative energy cars targeting 30% of the fleet to be electric cars, consumer staples and utilities stocks gained on speculation of improved upcoming earnings, as analysts are forecast earnings will rise 10.6% in the 1H14 (compared to 8.1% growth in the first quarter). Traders speculated that the government will loosen property restrictions in order to stimulate the economy. The index is around -3% for the year. China will report 2Q GDP figures tomorrow.

In Japan the market traded back towards five month highs, recovering half of last week’s losses of -2.3%, after the yen hit one and a half month highs. In Hong Kong the market recovered from its biggest weekly fall (of 1.3%) in two months.

For the session the Shenzhen Composite closed up 1.1% at 2,171, the Hong Kong Hang Seng closed up 0.5% at 23,346, and the Japanese Nikkei closed up 0.9% at 15,296, while the South Korean KOSPI closed up 0.3% at 1,994.

Commodities

The Dollar Index edged lower to 80.17 on a higher Euro, and the Aussie Dollar rose to US93.9c, edging towards its highest level since November last week. Commodities prices edged lower.

Overnight the COMEX WTI Crude for AUG14 delivery held at $US101.00, the COMEX Copper for AUG14 delivery closed up 0.1% to 3.25, the COMEX Gold for AUG14 delivery close slumped -2.2% at $US1,307.40.

ASX News

BPT – Woodside Petroleum will take a majority stake in Beach Energy’s exploration project in western Tanzania.

DJS – DJs shareholders have voted in favour of a $2.2 billion takeover offer from South African retailer Woolworths Holdings.

FMG – Fortescue Metals says it has produced at a record 160 million tonne a year rate during June quarter, as it continues its large volumes despite a weaker iron ore price.

GNC – GrainCorp the grains marketer has bought a 10% in one of its largest customers, an Egyptian flour miller.

KRS – Kresta Australia’s biggest blind and curtain maker is in a trading halt ahead of an expected announcement from a Chinese sunshade manufacturer about its 23c per share takeover offer.
KAR – Karoon has played down media reports suggesting it is about to launch a share buyback.

SFR – Sandfire Resources will benefit from a strong copper price and market outlook, and is UBS’s preferred copper play, citing themes of low inventories, recovering demand and supply tightness driving copper back above four month highs.

SPL- Starpharma says the Food and Drug Administration (FDA) in the US has paved the way for the company to carry out two key phase 3 clinical trial of its world-first VivaGel treatment for bacterial vaginosis.

SRX – Sirtex Medical which makes liver cancer treatments, rose after UBS raised its price target to A$19.00 after the company reported a 27% jump in 4Q dose sales of its particle technology treatment, which involves injecting “microspheres” with radioactive material into the bloodstream to attack tumors.

TCL – Transurban the toll road owner has raised revenue by over 13%, thanks to strong growth on its Sydney network.

WSA – Western Areas may also benefit from new battery technology because 40% of these batteries is made of nickel and cobalt-rich materials.

Market Summary

ASX – to open higher
US & UK/Europe – higher

ANZ 0.7%, NAB 0.9%, NWS -0.1%
AWC 1.4%, BHP 1.1%, RIO 1.0%, NEM -2.4%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.

Stock Market Analysis: Focus Turns To US Earnings Season As Portuguese Debt Fears Ease

July 14th, 20140

* US stock markets pared losses for the week, after recording it their worst week since April, ahead of the earnings season.
* European stock markets finished the last session of the week flat after falling for five straight sessions, with falls led by the financials on Portugal debt concerns.
* Asian stock markets recorded their first weekly loss in nine weeks, snapping their longest winning streak in two years, after recording the largest declines in two months.
* Commodities prices eased, Gold prices held at $US1,337, while crude-oil resumed its ten day losing streak down to $US100. Copper rose to US3.292c and is up 13% from the March lows and Iron Ore prices held around $US96.00.

The Australian sharemarket closed near the top end of the trading range last week as the ASX200 index rose 0.4% to 5486. The ABS will reported figures on the lending finance and credit for May this week, while DJs shareholders will vote on their takeover offer. The “buy on the dip” strategy was tested again last week and dividends from the banks will need to be redeployed near term as the major banks pay their shareholders.

The SPI 200 futures are up 0.2% at 5466, giving positive lead for the ASX market today, as US traders awaited the corporate earnings season. The Australian dollar last traded lower to US93.8c. The 5500 level is key near-term for the ASX200, as the markets across Europe and the US edged higher. Look to gold stocks again today, after the precious metal jumped last week.

temp
Gold prices are at key levels.

US Markets

US stock markets pared losses for the week, after recording it their worst week since April, ahead of the earnings season.

The three benchmark indexes all finished the session up 0.2%. The Dow Jones had its biggest drop in three months. The S&P500 continued its run of trading within a 1% range as it has done for the past 60 sessions, the longest such stretch since 1995. The S&P500 has not had a -10% fall for over two years. The Russell 2000 Small Cap index has fallen -4% last week, the worst such fall in two years.

Eight of the ten S&P500 sectors finished in the green, led by gains in the Tech and Industrials sectors up 0.6%, Healthcare, Financials and Discretionary sectors rose 0.2%, while the Energy sector fell -0.8%. The CBOE VIX jumped 12.1 up 20% for the week trading up from its lowest level since February 2007.

The US earnings seasons begins with reports from banking majors including JPMorgan Chase and Goldman Sachs, as well as Johnson & Johnson, Yahoo, Intel, IBM and General Electric, 40% of the S&P500 financial stocks will have reported by the end of this week. Analysts expect S&P500 stocks to report profits up 5% and sales up 3% in the June quarter. Over 130 stocks are due to report earnings in the next two weeks. Analysts are forecasting earnings in the past quarter have risen 5%, according to Bloomberg.

Investors went looking for bargains, as they set aside concerns over Portugal and comments from the Fed meeting that traders may be becoming overly complacent on the economic outlook and the Fed will be monitoring signs of excessive risk taking.

For the session Dow Jones closed up 0.2% at 16,943, the S&P500 closed up 0.2% at 1,967 and the NASDAQ closed up 0.4% at 4,415, while on 10-year Treasury notes were closed down again at 2.52%.

European Markets

European stock markets finished the last session of the week flat after falling for five straight sessions, as the falls were led by the financials on Portugal debt concerns.

The Stoxx Europe 600 Index rose 0.2% for the session, paring earlier gains of 0.5%. The index slumped -3.2% for the week, the most since March and closed at the lowest level since mid-May. Across the region the Tobacco companies rose on M&A activity, while financials were under pressure, as banks in Portugal, Italy and Spain sold down.

The German market has closed flat after trading lower three of the past four sessions. The London market rose paring the weekly losses to -2.6%, the largest weekly loss since March, as house price growth slowed in June, due to new mortgage regulations. UK equities valuations finished June at their highest levels since 2009. The BoE left its rates at record lows of 0.5%.

For the session the German DAX 30 closed up 0.1% at 9,666, the UK the FTSE 100 closed up 0.3% at 6,690, the French CAC 40 closed up 0.4% at 4,361, while the Spanish market closed up 0.1% at 10,538.

Asian Markets

Asian stock markets recorded their first weekly loss in nine weeks, snapping their longest winning streak in two years, after recording the largest declines in two months.

The MSCI Asia Pacific Index eased -0.3% for the session, down -1.1% for the week, edging off its six year highs, as seven of the ten industry groups finished in the red.

In economic news Copper is up 13% from the March lows and China which is the world’s largest copper consumer, recently reported its manufacturing sector grew at the fastest pace in six months, a sign that the government is successfully avoid a “hard landing” in the economy.

The Chinese market edged higher, paring the week’s losses, as traders speculated that the government will loosen property restrictions in order to stimulate the economy. The index is nearly -4% for the year, on fears that corporate profit growth may slow to 6% in the second quarter.

In Japan the market continued to ease back from five month highs, but was down -2.3% for the week, after the yen hit one and a half month highs. In Hong Kong the market dropped -1.3% last week its biggest weekly fall in two months.

For the session the Shenzhen Composite closed up 0.2% at 2,148, the Hong Kong Hang Seng closed flat at 23,233, and the Japanese Nikkei closed down -0.3% at 15,164, while the South Korean KOSPI closed down -0.7% at 1,988.

Commodities

The Dollar Index edged higher to 80.19 on a lower Euro, and the Aussie Dollar fell to US93.8c, backing off its highest level since November last week. Commodities prices edged lower.

Overnight the COMEX WTI Crude for AUG14 delivery down -2.1% to $US100.80, the COMEX Copper for AUG14 delivery closed up 0.7% to 3.292, the COMEX Gold for AUG14 delivery close down -0.1% at $US1,337.40.

ASX News

ALZ – The planned foreign takeover of property group Australand is one step closer, after Australian authorities approved the $2.6 billion deal.

CBA – Retired High Court judge Ian Callinan will chair a review set up by the Commonwealth Bank to deal with the scandal surrounding its financial advisers.

ERA – Energy Resources of Australia shares have fallen after the miner revealed it produced no uranium during the recent June quarter.

FMG – Fortescue Metals says it has produced at a record 160 million tonne a year rate during June quarter, as it continues its large volumes despite a weaker iron ore price.

GNC – GrainCorp the grains marketer has bought a 10% in one of its largest customers, an Egyptian flour miller.

PRR – Prima Biomed the cancer drug developer, has appointed Marc Voigt as its new chief executive.

SRX – Sirtex Medical which makes liver cancer treatments, rose after UBS raised its price target to A$19.00 after the company reported a 27% jump in 4Q dose sales of its particle technology treatment, which involves injecting “microspheres” with radioactive material into the bloodstream to attack tumors.

SYR – Syrah Resources shares jumped after a note from Credit Suisse noted it has potential because its high-quality graphite could be used to improve the performance and price of lithium-ion batteries, and its vanadium for bulk energy storage in vanadium redox flow batteries.

TCL – Transurban the toll road owner has raised revenue by over 13%, thanks to strong growth on its Sydney network.

WSA – Western Areas may also benefit from new battery technology because 40% of these batteries is made of nickel and cobalt-rich materials.

Market Summary

ASX – to open higher
US & UK/Europe – subdued

ANZ 1.0%, NAB 0.8%, NWS 0.3%
AWC 1.7%, BHP 1.3%, RIO 0.8%, NEM 1.9%

By Michael Hevern D2MX Investment Advisor For trade ideas and recommendations on how to trade in this market, sign up for a free trial of the D2MX Daily Trading Report, call 1300 610 024 or email advisory@d2mx.com.au.