Markets calm ahead of Fed talks

James Gerrish

Market Matters

The market crept higher to round out a reasonable week of trading. There wasn’t a great deal of direction given from overseas markets with many investors watching for the commentary coming from the Jackson Hole symposium of Federal Reserve members – Chairman Jerome Powell is set to speak tonight. REITs the standout as the search for yield continues along with a number of stocks reporting well today. Healthcare was the worst sector, however it only closed marginally lower. NAB was the only bank to close lower today as ASIC moves against the bank for allegedly using unlicensed and customers were treated dishonestly.

The market added 117pts / 1.8% for the week, rebounding from last weeks sell off.

Overall today, the ASX 200 closed up 21pts or +0.33% to 6523. Dow Futures are trading up +119 points or +0.45%

ASX 200 Chart

ASX 200 Chart


Reporting: More beats than misses today. BWX the stand out closing marginally off the days high.

Costa Group (CGC) - 16.36%: reported their first half numbers today. It was light on, even for their revised guidance from the AGM in May. The company talked to a number of issues continuing to impact earnings such as drought, a raspberry virus and pricing pressure on blueberry’s and mushrooms. They also noted costs continue to edge higher, leading the company’s crop harvest growth plans. The market was most concerned with the outlook with the company saying “trading and forecasting remains challenging with potential further downside risk." We own Costa Group, with more to come in the Weekend report.

Costa Group Holdings (CGC) Chart

Mayne Pharma (MYX) +10.53%; the pharmaceutical developer and distributor saw earnings slide again in the year, however the stock popped despite the miss in today’s FY19. The company has been through a challenging US pharmaceutical market over the past few years, but it looks like we are now seeing the bottom of the cycle and earnings will look to recover from here. The company didn’t give any financial guidance, but did flag increasing demand as well as a number of new products close to launch.

Mayne Pharma (MYX) Chart

Sims Metals (SGM) +9.35%; scrap metal business Sims rallied today on a profit beat. The market was negative Sims heading into the result, however the company managed to do well in tough conditions. Profit was down 14% for the year, but beat expectations. The company didn’t give any financial guidance, but they did talk down any impact from Chinese quotes while also talking down Turkish demand.

Sims Metals (SGM) Chart

Goodman Group (GMG) +4.38%; Goodman, which owns business parks and warehouses, saw operating profit rise 11% in FY19, with earnings in line with expectations. The company talked up the outlook for the industrial real estate space and flagged opportunities in helping customers improving supply chain efficiency. The operating profit for FY20 was flagged as $1.04b, behind expectations however the stock rose on the positive commentary. Dividends are expected to be flat in FY20.

Goodman Group (GMG) Chart

Sectors this week:

Stocks this week:

Broker Moves;

  • NRW Holdings Upgraded to Accumulate at Hartleys Ltd; PT A$2.58
  • Universal Coal GDRs Rated New Buy at Foster Stockbroking
  • Bingo Industries Upgraded to Buy at Goldman; PT A$2.75
  • Qantas Upgraded to Buy at UBS; PT A$6.40
  • Qantas Raised to Speculative Buy at Evans & Partners; PT A$6.68
  • Flight Centre Downgraded to Sell at Morningstar; PT A$39
  • Flight Centre Downgraded to Hold at Bell Potter; PT A$47
  • ERM Power Downgraded to Neutral at Macquarie; PT A$2.47
  • ERM Power Downgraded to Neutral at JPMorgan; PT A$2.45
  • Origin Energy Upgraded to Buy at Citi; PT A$8.17
  • Santos Upgraded to Add at Morgans Financial; PT A$8.05
  • Medibank Private Downgraded to Sell at Morningstar; PT A$3.25
  • Medibank Private Upgraded to Equal-weight at Morgan Stanley
  • Downer EDI Upgraded to Neutral at Credit Suisse; PT A$7.70
  • EBOS Downgraded to Hold at Deutsche Bank; PT Set to NZ$24.10
  • Coca-Cola Amatil Cut to Negative at Evans & Partners; PT A$9.25
  • Pro Medicus Upgraded to Hold at Bell Potter; PT A$29.20
  • Pro Medicus Upgraded to Add at Morgans Financial; PT A$32.79
  • Western Areas Downgraded to Hold at Bell Potter; PT A$2.79
  • Pacific Smiles Upgraded to Buy at Bell Potter; PT A$1.47
  • Coles Group Upgraded to Neutral at Credit Suisse; PT A$13.23
  • Mt Gibson Upgraded to Neutral at Citi
  • IDP Education Upgraded to Add at Morgans Financial; PT A$19.85
  • Auckland Airport Cut to Sell at Deutsche Bank; PT Set to NZ$8.90
  • Sky Network TV Raised to Buy at Deutsche Bank; PT Set to NZ$1.50
  • BHP Group PLC Downgraded to Sell at Liberum; PT 14 Pounds
  • Rio Tinto Downgraded to Sell at Liberum; PT 33 Pounds

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James Gerrish
Portfolio Manager
Market Matters

James is the Lead Portfolio Manager & primary author at Market Matters, a digital advice & investment platform with over 2500 members that offers real market intel & portfolios open for investment. He is also a Senior Portfolio Manager at Shaw and...

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