Trader’s Edge

Daily Note – Thursday, 11 February 2016

Global Markets

*Iress

Australian Companies Traded in the U.S.

*Iress

Market Wrap

In , the market on Wednesday suffered another heavy fall, wiping almost $20 billion from its value and taking investors into bear territory…But it could have been much worse. By lunchtime on Wednesday the ASX200 had dropped 125 points, and looked set to record back-to-back 100+ point falls. An afternoon rally restored some confidence, and sent the ASX200 back to 4775.68, down 56.4 points, or 1.17% at the close.

Asian stocks retreated as concerns about the world’s banks, particularly in Europe, pushed investors towards safe haven assets. Japan’s Nikkei 225 dropped 2.31%, and brings the declines over the past two trading sessions to 7.6%.

European stocks advanced early, rebounding from three consecutive lower sessions. The early strength was curtailed after Federal Reserve Chair Janet Yellen said the Fed should be able to gradually adjust monetary policy thanks to strength in the US economy, despite growing concerns over global growth.

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In London, the benchmark FTSE100 index advanced 0.71%, with the CAC40 up 1.59% in Paris, and the DAX30 rising 1.55% in Frankfurt.

Stocks in the US eased after comments from Federal Reserve Chair Janet Yellen acknowledged tightening financial conditions and uncertainty over Chinese growth posed risks for the US economy. After a positive start, the selling set in, with each of the major indices giving up the early gains.

At the close the Dow Jones Industrial Average dropped just a tick under 100 points (-0.62%), with the broad-based S&P500 closing flat, and the tech-rich Nasdaq Composite Index managing to hang onto small gains as the final bell sounded.

The Australian market looks set to open marginally higher on Thursday despite a late sell-off stateside. March share price index futures contracts are 20 points higher at 4730.

In equities news, is slated to post full year results while Cochlear, Suncorp, , , ASX, Group and are all expected to release half year results.

With the ASX200 down 9.82% early in 2016, now is the time to look for opportunities. Give us a call and speak with your adviser to discuss ways to take advantage of the current market weakness.

Companies in the Press

 AGL Energy: AGL Energy has stepped up its push into green energy with a $20 million stake in a US battery maker and a new fund to develop large scale renewable projects.

: The future looks bright for Boral, with a string of major road and infrastructure projects on the horizon as the building products maker benefits from the residential construction boom in NSW.

 Carsales.com: Online car seller Carsales.com has raced to a record first half net profit, but expects the brakes to be applied to growth in the next six months.

: Commonwealth Bank shares opened up more than three per cent on Wednesday as investors react warmly to its record $4.8 billion first half profit.

: Shares in investor services company Computershare have fallen seven per cent after it warned of softening operating conditions.

 Cimic: Construction and contract mining group CIMIC is set for a solid 2016 after lifting its underlying annual profit by 20 per cent.

 Falcon Minerals: Minerals explorer Falcon Minerals, which intends to change its business to 3D printers, says sales of 3D printers that will be part of its product portfolio are booming.

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 Nearmap: Photomapping company Nearmap lifted its first half revenue by 21 per cent but swung into the red with a $3.3 million loss following its expansion into the United States.

 Oz Minerals: OZ Minerals has boosted its dividend and says it will continue to reward shareholders ahead of a large capital expenditure program.

: Property giant Stockland is on track to increase its earnings despite cooling house price growth in Sydney and Melbourne.

 ASX: Higher trading activity during the recent spate of volatility on financial markets has helped boost first half profit for the Australian Securities Exchange. The ASX lifted its net profit 7.3 per cent to $213.1 million in the half year to December 31, up from $198.6 million a year earlier.

 Cochlear: Cochlear is slate to release half-year results.

 Goodman Group: raised its full-year earnings and distribution forecasts after sharply higher valuations of its property assets drove a 79% increase in first-half net profit. Goodman said its net profit for the six months through June totalled 919.3 million Australian dollars (US$653.2 million), up from A$512.7 million a year earlier. In mid-December, Goodman had signalled that property valuation gains of more than A$600 million would boost its half-year result.

 Mirvac Group: Property developer Mirvac has lifted half year profit 69 per cent, helped by revaluation gains in its portfolio. The company reported net profit of $472.7 million for the six months ended December 31, up from $279 million a year ago and aided by the property boom in Sydney and Melbourne.

 Rio Tinto: Rio Tinto investors will keep a close eye on the mining giant's dividend policy when it reports its full year financial results on Thursday. Analysts expect Rio to report full year underlying profit between $US4.6 billion to $US5.0 billion, well down on the company's $US9.3 billion profit a year ago. Rio is looking to preserve its financial strength as the prolonged slump in commodities prices sparks fears of weaker demand from China and excess supply.

 Suncorp: Suncorp's first half profit has dropped 16 per cent to $530 million due to the cost of insurance claims from natural disasters. The Brisbane-based insurer says net profit for the six months to December 31 was down on the $631 million for the prior corresponding period due to the previously flagged hit from settling natural disaster claims in NSW and Queensland. Underlying insurance trading ratio (ITR), a key measure of profitability, dropped from 14.8 per cent to 10.1 per cent, but chief executive Michael Cameron says the company is still targeting a full year underlying ITR of at least 12 per cent.

 Transurban: Transurban is expected to post half-year results on Thursday.

 Tassle: Tassal is slated to release half-year results on Thursday. (AAP)

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By the Numbers

*Data Source – Iress. *Trend based on simple moving average crossover (50,200). I.e. Upward trend = 50 period MA > 200 period MA

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Global Economic Calendar

*fxstreet.com, http://www.iinvestsecurities.com/economic-calendar/

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