What Mattered Today

The tune has yet to change with the pattern of investors happy to bid up stocks fairly strongly in early trade, finally breaking the 6000 level, before some selling eventuated after North Korea announced its nuclear program is now complete and that its intercontinental ballistic missile could now reach the US. At this stage, it has brought some interest to the market with the ASX200 losing ~15 points after the announcement. Despite this, the 6000 level was held, and today represented the biggest move by the market in 5 trading days, despite moving less than 0.5%.

With just one day left in November, the seasonal weakness has failed to play out, adding around 1.7% for the month so far. IT and energy have been the most supportive sectors this month, while, as expected, financials lagged on the back of some healthy dividends being paid for 3 of the big 4 banks.

On the mkt today, most buying remained focused in the Utilities sector, led by AGL continuing its strong run, while the Industrials underperformed. – A range on the mkt today of +/-  47 points, a high of 6031, a low of 5984 and a close of 6011, up +26pts or +0.45%.

ASX 200 Intraday Chart

ASX 200 Daily Chart

TOP MOVERS

1. Galaxy Resources (GXY) – today GXY signed a long term offtake agreement we multiple clients, and the company rallied 6.96% to close at $3.90.  The gold and lithium coy is up around 50% this financial year and over 3000% from its lows in 2015, now targeting fresh highs above $4.08. We've spoken a lot about lithium and it’s risks and today’s move by GXY is a smart play to de-risk the business.

Galaxy Resources (GXY) Daily Chart

2. South32 (S32)  – rallied about 1% higher to $3.35 as investors welcomed its AGM today. S32 is currently trading a p/e multiple of 11.96x with today’s trading volume on par with its 20-day average. Watch for this space, as most of analysts’ consensus has either a hold or sell recommendation with a short interest of around 83 million shares (3 average days needed to buy back this short position). With short interest so large, any positive news flow will see a sizable move in the price.

South32 (S32) Daily Chart

3. Seek (SEK)  – the biggest loser in the top 200 index today, SEK fell 3.6%, giving back some of the strong rally it commenced in October. The fall came after re-confirming guidance at today’s AGM which fell short of expectations as many were predicting upgrades. The stock did briefly make all-time highs above $19 in the mornings trade before a significant reversal in fortunes saw the it close almost 6% from its intraday high. On a PE of 30x, this is a classic example of the market asking a lot in terms of performance and it appears reconfirming guidance is not good enough.

Seek (SEK) Monthly Chart

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Have a great night
James & The Market Matters Team

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Prices as at 29/11/2017