THE MARCUS TODAY MORNING MEETING - Friday 29th April

Anyone who has been in broking will tell you that the Morning Meeting is how all brokers start the day.  The format is to have a quick look at the overnight markets, consider what's coming up in the day ahead, hear from the analysts, share ideas and get set up for the day's stock market activity

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Transcript

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Marcus Today offers information that is only general in nature. It does not take into account your personal financial situation, needs or objectives. Nor does it take into account the financial needs of any specific person. You should consider your own personal financial situation and needs or seek financial advice before making any decisions based on this information. For more information please see our Financial Services Guide.

*PLEASE NOTE: Transcripts are autogenerated and may contain errors, especially Stock Codes and Names.

SPEAKERS

Henry Jennings, Tom Wegner, Chris Conway, Layton Membrey, TEAM, Ben O'Leary

Ben O'Leary  00:00

Good morning everyone, Friday April the 29th session in the US last night Chris what happened?

Chris Conway  00:18

Thank you Ben the Dow was up 614 points the best part of 1.9% some uncertainty earlier that gave way to a rally in the back half of the session at worst down 53 at best up to 753. So obviously closing towards the upper end of that range by futures were up 50 points this morning we just had a little lull the index is actually up 63 points and for all the volatility this week and craziness and thinking it's a bearish week and it certainly feels like a very bearish week with those 60 Odd points. The market is now down around the 50 points for the week it was down I think 200 at one point so um, has come ripping back quite nicely still doesn't escape the fact that we're probably likely to close down for the second consecutive week in a row NASDAQ was up 3% overnight, Facebook up 18% We've seen some mixed earnings after the bell so Apple was down 3% Despite an earnings beat, they're talking about billions of dollars in added costs, supply chain issues or whatnot. And Amazon this was the big one down 9% earnings slammed by Rivian and forecasts coming up short Intel another big tech stock down 5% as well. So post the bells and tech names on the nose.

Ben O'Leary  01:25

Just on Rivian might probably worth noting because I had to look it up to actually make sense maker. Yeah. So to the electric carmaker Amazon has quite large stake in them. And over the course of this year that sticks down around 40 or 50%. So there you go. Yeah, that's the explanation behind that.

Chris Conway  01:39

Yeah, the other moving part overnight was the GDP numbers in the US they missed and they missed by a mile. So coming in negative a contraction of 1.4% annualised expectations with a growth of 1% are some analysts did expect this though, so it's not completely out of left field. And the decline was due primarily to record international trade deficit for the US was lower government spending and declining inventories as well. Because of higher costs. businesses aren't restocking. By the same token or on the other side of the coin, I should say the market probably looked past the raid, because the deeper analysis showed that consumer spending was robust, that's 70% of the US economy and business investment was also strong. So we know that GDP is C plus I plus G plus x minus M for anyone who's done economics 101, and half of those elements were bad. And the other side of those elements were good.

Ben O'Leary  02:26

There could be a little bit of bad news is good news from an interest rate perspective as well, because a weaker growth kind of forecast and environment is gonna make it much harder to go as aggressively as the Fed have been talking.

Chris Conway  02:36

Spot on. And the final thing worth noting is that now just north of 40% of s&p companies have reported and beat rates are lagging in recent quarters. That's hardly a surprise. It was certainly to be expected. Some of the notable themes reopening momentum, consumer strength and input and supply chain rushes as well as the geopolitical uncertainty which is an ongoing moving faced. That's it for me.

Ben O'Leary  02:57

Great stuff, thank you, Chris. Tom, we're going to start today?

Tom Wegner  02:59

Thank you, Ben. Well, as Chris alluded to our market doing a little bit better than what the futures had indicated. It will be interesting to see if we can hold on to this optimism. We have a massive week next week. I'll get to that all sectors are in positive territory tech and energy stocks outperforming health care is being weighed down by some poorly received results from resume miners are underperforming a bit with both BHP and Rio down although we are seeing some lithium stocks push higher a lot of trading updates from the smaller to mid cap companies on the ASX. So check out the announcement table for all the reactions we have pointsbet Blue bid and bid makers all firming on updates. So good day to be in gambling stocks, Cogan, was down 10% initially on its update and again raise mid suffering on its numbers there on the economic front producer prices are expected to provide another window into cost pressures and we also have private sector credit do as well. Thank you, Ben.

Ben O'Leary  03:58

Thank you, Tom. While, we've got you, strategy today?

Tom Wegner  04:00

Strategy today. Look, we are hoping for a positive into the week although as Chris said, we are looking like we will finish in negative territory for the week, which would be two down weeks on the trot rather and I'm looking at the correlation between the Aussie vix volatility index and the market bottoms as well as what to look out for next week, which I did say before it's gonna be huge. I'll just run through some of the key events may three we have an RBA decision. There are expectations that we might actually see a hike so that they have been building that is building from the hotter than expected CPI data on Wednesday, May 4 May the Fourth be with you as Chris was trying to make a joke before we have an FOMC meeting and an Zed half year results. So we're moving into the bank results season net interest margins, mortgage competition and expenses are gonna be in focus there. On May five we have a bank of England policy meeting the US also has weekly unemployment and on May 6, We have an RBA statement on monetary policy, we're likely to see some revisions to the economic outlook as well. And that could emphasising things like slowdown in economic growth cost pressures. And the US also has unemployment data and that is expected to remain steady at 3.6%. So a lot on next week is going to be very interesting for markets Ben.

Ben O'Leary  05:22

Very good. Thank you, Tom Layton, what have you got for us from the brokers? 

Layton Membrey  05:26

Thanks, Ben. It's all about the miners this morning. I've got Nickel Mines. The results were really well received from the brokers they got two upgrades from Macquarie and Credit Suisse. But to outperform they both got target prices of $1.50 which implies a 22% upside and so Nickel Mines is still down around 25% from that high before the nickel market short and it seems like all of that negative sentiment is the major shareholder that had the big short against nickel is still there, but maybe turning around now so there could be a bit of upside in the share price to look for Pilbara minerals also had some well received results. I think they're up over 4% this morning, their cash costs were lower than expected and spa German pricing was in line with expectations and Credit Suisse has upgraded to an outperform them Macquarie has retained its outperform recommendation and average target price is $3.89 Which implies 44 and a half percent upside and Fortescue Metals despite some good results, their shipments beat expectations and pricing was in line with expectations. The brokers are saying too much downside risk and the recommendations there are all neutral or underweight. The average target price implies a 20% downside. Thanks, Ben.

Ben O'Leary  06:42

Interesting stuff. Thank you Layton. Henry. How are you going? What are you writing about today?

Henry Jennings  06:46

I'm going all right, thanks. Ben voice is a bit croaky still. But getting there as far as the COVID goes, borrows my stuff today goes just looking at all the cordeliers that are coming out as Leighton was saying Cobra was out yesterday also having a good rally today in points back which makes a change because it has been dog of the year. I think it also points out another few dogs of the year things like satire and step one possibly that's attire was over five bucks at one stage and is now 66 cents. So there has been a complete collapse in some of these high priced tech stocks, high priced internet consumer stocks as well. So that's interesting, just also working on the Straw Hats in winter kind of routine and looking at lithium because that certainly people talk about that as a bubble. But certainly when you listen to the CEO, Pilbara, he's talking about 50% increase in Spa do you mean prices in the next quarter, which would be another extraordinary move for them or the other one, I'm adding a small position today in AML payments, the stock did get crucified to say the least on its downgrade, which came in the midst of a whole technical and sector downgrade as well but just looks a little bit interesting on the bounce. It has bounced nearly 7% this morning. So that is a good move from them. They did reply to an ASX query which has cleared the air a little bit but there is certainly a lot of credibility at stake. But don't forget that it was only a few weeks ago, they talked about media speculation that private equity was interested in them. And they had had talks of Bain Capital last year but they were broken off we can see why they were broken off. But there's possibility of course somebody might come back for this one. It is complicated, but it does have an attractions at some price. So maybe this is starting to find a bottom but apart from that, that's about it for me.

Ben O'Leary  08:24

Thank you, Henry. Chris, fresh off TV staring at me very intently. What have you got in your trading section today?

Chris Conway  08:29

A little bit on this morning. I was just looking over a couple of things from earlier in the week. The White Haven idea that I laid out yesterday is completed today it's hit the target I was talking about students anyone who jumped on that Aurora from Tuesday as well as chart of the day is also broken higher is looking quite nice vivre energy is the stock of the day or sorry chart of the day I should say, and along with ample doing really well. And as one would expect, given they have oil refining capability here in Australia. And of course, they have the retail arm as well, which has bounced back x pandemic x COVID, of course. And then finally there will be a trade at 1145. Today, limb 45. For anyone who doesn't know at the time that I release any new trades there will be one today to stock that I've traded before. It's the stuff that I like quite a lot. It's in the material space. That's all the clues I can give them a break till it goes live and everyone can see it. So keep an eye out for that if you're interested in leaving a cliffhanger, pretty easy to figure out. But anyway.

Ben O'Leary  09:19

 Very good. Thank you, Chris. And our question of the day alternative investments do you have any time? No, I don't. Ben, thank you, Tom. Chris, I'll get to you because I know you have some...

Chris Conway  09:28

Especially as  posed this is the potential question of the day. Bit worried if I didn't have something to say about it. I've talked about this before on our podcast. I'm a collector of rubbish my wife would say but various things that I really enjoy. One of them is Legos. The two of them is basketball cards and 40 cards old 40 cards I love and increasingly a collection of Air Jordan shoes so like I said there's a bit of rubbish in there but the footy cards and the basketball cards you know that market has gone crazy. I'd like to be a collector of prestige vehicles because that market has gone crazy as well but that's a bit beyond me at this stage. But Lego as well brand new in box Lego that is untouched and opened. He can go crazy, just have a look online at some of the escalation in some of the prices and got a few of those sets tcuked away.

Ben O'Leary  10:11

You're the adult it every kid thinks they're going to turn out to be when they're like when I grow up. I'm going to buy all the Legos and all the 40 cards and eight Maccas everyday.

Chris Conway  10:25

Well, who wants to grow up? You know, I love it. I love all that stuff from when I was a kid and I never really had the money to have you know, I'd certainly had some of it but never had the money to have all that I wanted. And now I've got some more money, so I'll buy those things. So yeah.

Chris Conway  10:37

What's the saying small things amuse small minds?

Chris Conway  10:39

Wouldn't know Tom.

Ben O'Leary  10:43

Very fun. Thank you, Chris. Layton,

Layton Membrey  10:45

I jumped on the crypto bandwagon at the start. So I've got pretty small holding cryptocurrency and I've also got a few NF T's as well that I sort of just forget about that I even have I don't even know what they're selling for at the moment. Oh, really? He had like some early profits. Okay, cool. I haven't looked at the secondary market. so yeah.

Ben O'Leary  11:04

Very good. 

Tom Wegner  11:05

And you've Ben?

Ben O'Leary  11:06

I have kind of similar a couple of things that I bought in crypto space that just sit in the computer somewhere and hopefully I'll turn the computer on in 20 years and they're, they're gonna be with some zeros most likely or a lot more. It's unlikely it'll be worth what they are now. And I've also looked into a little bit of the equity crowdfunding base which unlisted companies looking to especially early stage capital stuff but for retail because normally that is left to private equity or big family offices to be able to get access to unlisted companies so had a bit of fun referring to that virtual is the easiest way that I've seen into getting into that and Henry?

Chris Conway  11:40

Wine collection Henry? 

Henry Jennings  11:41

No, used to play that game with Macquarie days but drank it all.

TEAM  11:45

Laughter!

Chris Conway  11:47

Well done. 

Henry Jennings  11:48

And sold bunch of Grange and bought my wife actually bought my daughter, a horse many years ago, cars would be my thing. If I was going to collect anything. I have a bit of a passion for older cars. That's my thing, but also alternative investment wise, it's more unlisted private companies that I have some investments in mainly backing nest and friends with their businesses, which one day will IPO no doubt though, hopefully, that will come to fruition. But apart from that, pretty boring. I do have my father's cigarette cars from the 1930s in a great album, which you would think would be worth something, wouldn't you? But when you look at the prices on eBay, they're basically just bits of paper. 

Chris Conway  12:29

Still very cool, though. That's an awesome thing to have.

Ben O'Leary  12:33

And if we say one day and Henry doesn't show up to work, we'll know it was one of his mates. 

Henry Jennings  12:35

You will.

Ben O'Leary  12:35

We'll Very good. Thanks, guys. Have a good weekend. We'll see you next week. Thanks, everyone.

TEAM  12:44

Thanks