Sunset Strip > Trading Day Wrap From Blue Ocean 20170810

Mathan Somasundaram

Local market fell back into negative territory in the afternoon as global investor support for the banks ran out. The local market has gone nowhere in the last 2 months…23 up days and 22 down days. RIO going ex div weighed on the materials sector. Property sector giants in SCG and WFD go ex div tomorrow. US and NK are stuck in a Mexican stand off with no upside to initiating an attack. Geopolitical risk looks to be more bark than bite…but it will persist short term. Commodities remain positive…helped by China rationalizing inefficient local supply, Silk road projects around the world and early 2017 stimulus kick. Spot Gold has a big bounce delivering 2 month high…Aluminium on the move as well as steel…while Copper and Iron Ore have been flying. NAB trading update will be the main play tomorrow. The best performing sectors were Gold, IT and Telecom Services while the worst performers were Utilities, Staples and Health Care. On the sector/stock front….(1) ORA had another solid result and bounced on short covering…headwinds in currency and energy will hit a low yield defensive as bond yields bounce (2) BAL keeps running on better clarity on China regulation (3) WSA back in favour as Nickel recovers on battery outlook…don’t forget the 20% shorts will get squeezed (4) MLX running on nifty update and copper outlook (5) IGO similar to WSA with 15% shorts that will get squeezed (6) CAR continuing after yesterday’s solid result (7) VOC was on the bash list as telecom sector remains in earnings uncertainty (8) AMA running into weaker consumer outlook and ACCC issues (9) CSV falling on substantial shareholder reducing and broker cuts (10) MFG result underwhelms the market.

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Mathan Somasundaram

2017 - Now > Blue Ocean (AUS) > Market Portfolio Strategist 2012 - 2017> Baillieu Holst (AUS) > Head of Strategy, Quant and Data Analytics 2009 - 2012 > Bell Potter / Southern Cross (AUS) > Head of Quant and Data Analytics 2007 - 2009 > LIM...

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