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What a week…markets cave in ~10%

James Gerrish

Market Matters

Wow, what a week, it started on the back foot on Monday morning as the market came under significant pressure with the spread of the coronavirus outside of China, a void of buyers turned into a capitulation style move across the market today – simply all stocks were dumped as traders liquidated positions ahead of the weekend. For the week the ASX 200 dropped 9.77%, the total decline from the 7197 high set last Thursday has been -757pts / -10.5%, many stocks were down multiples of that number on the week, unsurprisingly headed by the travel stocks + the high beta IT style stocks which have taken a real bath. That said, there hasn’t really been anywhere to hide, gold stocks have even been hit hard with just 4 stocks out of the ASX 200 closing up on the week led by funeral provider Invocare, hardly a good omen!

It was end of month today and it’s hard to remember a more volatile start to a year, the ASX200 up +4.85% in January and now down -8.21% in February.

Overall, the ASX 200 closed down -216pts or -3.25% today to 6441, Dow Futures are trading down -277pts/-1.08%.

ASX 200 Chart

ASX 200 Chart

CATCHING MY EYE;

Simply a week of red, the aggressive nature of the selling was extreme, with the volatility index ticking up to 39 overnight.

Volatility Index (VIX) Chart

Sectors this week:

Stocks this week:

BROKER MOVES;

· AP Eagers Cut to Neutral at Macquarie; PT A$9.40

· AP Eagers Raised to Overweight at JPMorgan; PT A$10.50

· Ainsworth Game Raised to Outperform at Macquarie

· Bank of Queensland Raised to Buy at Bell Potter; PT A$8.30

· Bank of Queensland Raised to Equal-Weight at Morgan Stanley

· Bank of Queensland Raised to Hold at Shaw and Partners

· Ramsay Health Cut to Neutral at Citi; PT A$75

· Afterpay Cut to Neutral at Goldman; PT A$37.70

· NZ Refining Raised to Outperform at Jarden Securities

· PolyNovo Cut to Market-Weight at Wilsons; PT A$2.25

· Healius Cut to Hold at Morningstar; PT A$3.36

· Domain Holdings Raised to Hold at Morningstar

· Qube Raised to Hold at Morningstar

· Metcash Raised to Hold at Morningstar

· OZ Minerals Raised to Buy at Morningstar

· Link Administration Raised to Outperform at Credit Suisse

· Woolworths Group Raised to Hold at Shaw and Partners

· Auswide Bank Cut to Hold at Bell Potter; PT A$6.90

· Stanmore Coal Raised to Buy at Bell Potter; PT A$1.15

· Pendal Group Raised to Neutral at Evans & Partners Pty Ltd

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Any advice provided is of a general nature only.

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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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