Daily Report

The market quickly turned its focus back on the escalating US China trade war today following a twitter spat from Trump overnight. The US market fell 2% from their intraday high to close around 1% lower on the session and the local market followed suit. The ASX opened lower, and spent the rest of the day in the red with resources copping the brunt of the selling. We did manage to outperform the American sell off – fundies are holding high cash levels and are clearly prepared to buy any dips.

For the most part stocks that were hit hardest early saw some recovery as the session went on, closing some way from their lows. Yield plays continue to see support as more money is forced out of the low yield bond market into high yielding stocks – historically defensive sectors like telcos and REITS held up well. Energy was hit hard with the oil markets selling off into global growth fears. Gold was a standout today with Saracens (SAR) and Resolute (RSG) both up +10%, while Newcrest rallied by 7.19% to close at $36.66.

It was certainly a wild ride for the market this week, which saw volatility spike. From an index perspective new all-time highs were made before failing to hold, a short-term negative indicator. On a stock level, plenty of stocks fell substantially as we head into reporting season. Graincorp (GNC) was the latest casualty today, but shareholders of the grain trader can count themselves lucky given the stock fell just 5% on a 50% miss to EBITDA expectations.

Overall today, the ASX 200 closed down -20 points or -0.30% to 6768. Dow Futures are trading down -13 points or -0.05%.

ASX 200 Chart

ASX 200 Chart

CATCHING OUR EYE:

Sectors this week:

Stocks this week:

Broker Moves; Ansell (ANN) -3.70%: Shares in personal health and safety goods manufacturer Ansell slumped today on a downbeat broker outlook heading into their result. JP Morgan noted the risk heading into the result, and in particular the company’s outlook which could come in worse than expected given the soft economic conditions and their impact on sales. Shares gave back the gains of the last week today, falling 3.7% on the back of the note. The blow was softened on the falling Aussie dollar, which plumbed new recent lows.

Ansell (ANN) Chart

Elsewhere…

· Sydney Airport Upgraded to Neutral at UBS; PT A$8.50

· Transurban Downgraded to Neutral at UBS; PT A$15.10

· Altium Rated New Underperform at Macquarie; PT A$34

· Xero Upgraded to Outperform at Macquarie; PT A$76.50

· Westpac Upgraded to Equal-weight at Morgan Stanley; PT A$26.60

· NAB Downgraded to Equal-weight at Morgan Stanley; PT A$26.40

· Janus Henderson GDRs Upgraded to Hold at Baillieu Ltd; PT A$29

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