The Match Out: Market slides as growth disappoints

A risk-off session today particularly on the close with some big sell-orders hitting the tape knocking the ASX 200 ~30 points in the match, tearing up what was a solid fightback from midday lows – the intra-day chart below highlighting the move well. It seems the ‘worm might have turned’ in relation to short-term sentiment, big market on close (MOC) orders are indicative of that so we’re now taking a more cautious stance, looking to reduce some market exposure after a solid run by local stocks.

• The ASX 200 finished down -61pts/ -0.85% at 7291
• The Material sector was best on ground (+0.22%) and the only sector to rise while Healthcare (-0.74%) outperformed a weak market – but not by much.
• IT (-3.29%) and Energy (-2.02%) the weakest links with the Oil price now down ~40% from recent highs.
• Lead Portfolio Manager James Gerrish was on Ausbiz this morning talking about our portfolio positioning with specific reference to Energy following Crude Oils correction – Watch Here
• We held a webinar at midday today with Analysts Jono Higgins & James Bisinella – thanks to all those who attended, plenty of interest in the topic - 5 growth stocks that won’t die wondering. Subscribers will be sent a recording of the webinar tomorrow.
• Australian GDP missed expectations today, up 0.6% in the September quarter from the previous three months and climbed 5.9% over the past year – below 6.3% expected.
• The front end of Australia’s yield curve inverted for the first time in 21 months - the cash rate at 3.10% while the three-year yield is at 3.07% implying weaker growth ahead.
• We talked about Copper in a Webinar last week with Resource Analyst Peter O’Connor – Watch Here – today Goldman’s painted a more positive near-term picture for Copper saying prices will rocket to record levels in the next 12 months as a looming supply shortage coincides with growing demand.
• Rocky was more subdued in the near term outlook for Copper, although remains a medium term bull.
• Iron Ore remained well supported in Asia today, with Fortescue (ASX: FMG) up +2.27% as a result.
• Coal prices continue to recover, January Futures out of Newcastle back up above $US400/tonne (they were sub $US300).
• Gold edged higher to ~US$1773 at our close.
• Asian stocks were mixed Hong Kong up +1.21%, Japan -0.54% while China was up +0.26%
• US Futures are all up, around +0.20%

ASX 200 Chart

ASX 200 Chart – Weekly Chart

Broker Moves

• GUD Holdings Raised to Buy at Citi; PT A$10
• IPH Rated New Neutral at JPMorgan; PT A$8.70
• Adbri Rated New Underweight at Barrenjoey; PT A$1.60
• Dicker Data Rated New Neutral at Barrenjoey; PT A$11.50
• Beach Energy Cut to Neutral at JPMorgan; PT A$1.90

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