The Match Out: Market little changed ahead of Thanksgiving, Gold stocks find some love

James Gerrish

Market Matters

The ASX pushed up early this morning hitting a high of 7264 before sellers got the upper hand and the market sold off into the close. Gold stocks the stand out on the upside while Coal stocks fell on China stimulus & company-specific influences. All in all, a positive session however it feels like the market is losing some steam, Thanksgiving holiday in the US tonight wouldn’t have helped.

  • The ASX 200 finished up +10pts/ +0.14% at 7241
  • The IT sector was best on ground (+1.25%) while Real-Estate (+1.21%) & Materials (+0.93%) were also strong.
  • Energy (-1.81%) and Staples (-0.64%) the weakest links.
  • Portfolio Manager Harry Watt was on Ausbiz this morning talking Kogan (ASX: KGN), Bapcor (ASX: BAP) & Sandfire Resources (ASX: SFR)Click here to watch
  • China’s State Council has pledged support for the economy, things like cutting banks’ reserve requirement ratio are on the table however we suspect they’ll also make moves to ramp production of key commodities, Coal being one of them.
  • A reason why coal stocks were lower today but a couple of them also had their own issues…
  • Whitehaven Coal (ASX: WHC) -6.65% CEO/MD Paul Flynn sold 900k shares – that spooked investors and is never a positive sign. That said, the fate of WHC will come down to the Coal price and while Paul still holds 1.07 million shares, 449,884 vested performance rights & 2.5 million performance rights, so remains well invested, the obvious question remains, does he know something we don’t?
  • New Hope Coal (ASX: NHC) -8.77% was the worst of the bunch on softer production results.
  • Gold stocks rallied, Evolution (ASX: EVN) +6.61% a standout as they held their AGM while Newcrest (ASX: NCM) +2.59% was also strong.
  • Kogan (ASX: KGN) +7.87% said sales were down 38% from July to the end of October compared with the same time a year ago – although they said things were looking better now.
  • But chief executive and founder Ruslan Kogan says things are starting to turn as it rids itself of the excess inventory in warehouses which built up last year,
  • Harvey Norman (ASX: HVN) -1.42% said consumer spending was holding up despite higher interest rates – as it revealed plans to open more than 50 stores in Malaysia over the next 6 years.
  • Nick Scali (ASX: NCK) +9.53% rallied on a very good trading update – in the four months to the end of October, sales revenue was $194 million, was +74% on PCP, the doom and gloom in retail is yet to materialise it seems
  • Iron Ore was ~1.5% higher in Asia today.
  • Gold was up overnight to ~US$1750 and added another US$5 today settling $US1755 at our close.
  • Asian stocks were okay Hong Kong down -0.39%%, Japan +1.17% while China was up +0.21%
  • US markets are closed tonight for Thanksgiving

ASX 200 Chart

Broker Moves

  • Qantas Cut to Accumulate at CLSA; PT A$7.10
  • Pilbara Minerals Rated New Buy at CLSA; PT A$6
  • Allkem Rated New Accumulate at CLSA; PT A$16.25
  • 29Metals Cut to Underperform at Jefferies; PT A$2.10
  • Strike Energy Rated New Overweight at Barrenjoey
  • Norwest Energy NL Rated New Hold at Barrenjoey
  • SmartGroup Cut to Neutral at Macquarie; PT A$4.75
  • Sonic Healthcare Cut to Hold at Jefferies; PT A$34.20
  • Perenti Ltd Cut to Hold at Jefferies; PT A$1.20
  • Viva Energy Rated New Sector Perform at RBC; PT A$3.25

Major Movers Today

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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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