The Match Out: ASX down today, flat for the week, Healthcare & IT top the leader bard

James Gerrish

Market Matters

While the ASX ended lower, the intra-day move mirrored that of Wall Street with a sharp sell-off early on followed by a sustained fightback in the latter part of the session, the ASX 200 down ~116pts at the lows before rallying +68points to close the session down 45. Resource stocks the biggest headwind on broad-based selling of commodities overnight while the defensives did their job today.

  • The ASX 200 finished down -45pts/ -0.68% at 6605
  • The Staples sector was best on ground (+1.02%) while Healthcare (+0.97%) and Property (+0.72%) were also strong.
  • Materials (-3.21%) and Communications (-0.74%) the weakest links.
  • For the week, the ASX was little changed (+0.05%) but a lot of movement under the hood
  • Healthcare +3.42% and IT +2.91% have benefitted from a pullback on bond yields – we covered this thematic on Wednesday Here taking the view that tech will play catch up.
  • Wisetech (WTC) +3.42% rallied after an upgrade, saying revenue will be at the top of their guided range while EBITDA would be $310-$320m, the market was at $290m.
  • Pendal (PDL) -7.84% on the other hand fell on a weak FUM update.
  • Macquarie (MQG) -1.76% fell after JP Morgan posted weaker than expected results overnight, investment banking revenue fell off a cliff.
  • Iron Ore was hit overnight and continued lower in Asia, down 8% dragging Fortescue (FMG) -6.2%.
  • Gold is only going one way, now trading at ~US$1703/oz
  • Asian stocks were mostly lower Hong Kong down -2%, Japan +0.22% while China was off -0.91%
  • US Futures are trading more or less flat.

Pendal (PDL) $3.76

PDL -7.35%: The global fund manager provided an update today with funds under management down ~11% in the quarter to ~$111bn which included $4.2b of net outflows, $13.8bn in marked to market offset by a +$4bn contribution from a weaker AUD. They did say that St James was putting in $4bn shortly, if you recall these are the guys that left Magellan (MFG) a week or so after Hamish Douglas confirmed no institutional investor was concerned about performance! All in all, a weak update, not unsurprising though given their exposure to weak markets, although the ~7% sell-off was disappointing.

Sectors This Week

Stocks This Week

Broker Moves

  • Santos Raised to Buy at Citi
  • Bega Cheese Cut to Neutral at Evans & Partners Pty Ltd
  • Goldman Expects 2Q Guidance Downgrades from Miners; Cuts BHP (1)
  • BHP Cut to Neutral at Goldman
  • IPD Group Rated New Buy at Shaw and Partners; PT A$2.32 

Have a great night,

The Market Matters team.

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James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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