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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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.
Why not sign up for a free trial? Get access to expert insights and independent research and become a better investor.
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*PLEASE NOTE: Transcripts are autogenerated and may contain errors, especially Stock Codes and Names.
SPEAKERS
Tom Wegner, Ben O'Leary, Henry Jennings, Layton Membrey
Ben O'Leary 00:14
Morning ever on Monday the 16th of May a good session in the US on Friday night is rolling into a positive open to the week for us locally, the Dow was up 466 points just shy of a percent and a half. It never traded in negative territory and it rallied all the way into the close at best, it was up 546 points and at worst it was up 132 s&p 500 was up 2.39% and the NASDAQ was the best smashing out of the park of the 3.82% rise make up a bit of ground that's lost over the last couple of weeks. European markets were all stronger and the market commentary noted that the few safe havens around and lack of better options has basically led to investors staying the course largely in stocks. Outside of that we saw some commentary from Fed Chair Powell who warned the ability of the Fed to engineer a soft landing may be beyond its control. He reiterated his support is for 50 basis point hikes plays into that growth first inflation conversation and fears that we've been talking about a bit lately. Marx has a bit on that Saturday if you missed it. In other news, Shanghai officials said the goal is to have no community spread of COVID by mid May and they are looking to expand the number of businesses allowed to operate and Cleveland read President mess started at the Fed must be resolute in confronting inflation and added that growth could slow more than expected again that inflation versus growth conversation us import prices called in April after a sharp gain the previous three months University of Michigan's consumer sentiment rating fell to 59.1 in May or April reading of 65.2 significant because it is the lowest level in more than 10 years expectations were 460 4.1 so significantly below that showing the consumer sentiment is not there at the moment treasuries were weak our 30 year yield moved firmly back above 3% US Dollar was stronger against the yen weaker against the euro and the Sterling gold was down 0.7% Bitcoin was up 5% It's of course been sold off around 50% from its high in the latest little sell off and WTI crude was up 4.1% That's the wrap for the weekend. Tom what is happening locally today?
Tom Wegner 02:15
Thank you, Ben. Well, as you pointed out the markets off to a good start to the week ahead of what the futures have predicted industrials and miners leading the market higher lithium names outperforming mineral resources at 3.2%. And all cam a K up almost 4% healthcare is the only sector in negative territory brambles is up 9% After confirming a potential bid and infomedia I fm up 28% On a bid from ta associates calyx and baarle both improving after winning government funding as part of government's carbon capture programme and Goodman group has reaffirmed guidance, nothing on the economic front RBA minutes tomorrow will be one of the key events this week and quarry down 2.2% trading ex dividend and in other news, Saudi Aramco, which is a state owned oil company saw profit of 82% to $57 billion. And to put that into context that is 460% more than what CBI makes is a lot a lot of oil money.
Ben O'Leary 03:14
Thank you, Tom interesting that healthcare is the only laggard there was a bit of a thought that healthcare was a bit of a market beta for a while there particularly and CSL was so big and got thrown around the market. But the data does tell us Chris and I have been going through with the portfolios over the last 12 months, that healthcare sector in general is very tuned in to GDP numbers. So that's a pretty clear indication that this turn is the growth verse inflation worries about growth, thinking that inflation will get under control good for most of the market, but that growth GDP numbers does hurt healthcare.
Tom Wegner 03:46
And we should see that reaffirmed in the RBA minutes tomorrow as well. They put out in their statement on monetary policy not that long ago, that growth was expected to moderate next year to about 2% from 4.3 or something like that. So yeah, these growth concerns are out there.
Ben O'Leary 04:01
Interesting. See what what gets hit by that because we've seen what gets hit by the inflation interest rate concerns and then it's the other side of the ledger. So keep an eye on that Layton. What do you got out of the brokers today for us?
Layton Membrey 04:10
Thanks, Ben. And welcome back to the office. Good to have you back in here. Thank you just got a few to go through this morning. It's pretty quiet, but I've got an upgrade for Premier investments that's PMV. at Citi, the broker that maintains a positive view on the retail sector, despite the depressed expectations and target price has fallen slightly to $29. But it's still implying a 26% upside and Breville group Macquarie has looked at its peers results which it says reaffirm positive trends for the segment inquiry has retained its outperform recommendation with a target price of $34.80 which implies a 58% Upside one more zero. There was a lot of commentary on Friday that came through that I wrote up in the newsletter, just another positive update there from Citi who anticipates strong growth in the UK and they've got a buy recommendation and a target price of $108 which implies just above a 28 turned upside and I think they're up about 5% already this morning.
Ben O'Leary 05:03
Very nice. Thank you Layton. Henry, good morning. What do you got for us today?
Henry Jennings 05:06
Good morning guys just in Henry's take today, just the usual Monday morning kind of stuff in terms of the US update and fear and greed indices from not only equities, but also in crypto as well. And the Fed GDP now from the Atlanta Fed as well. Also, I was asked on Friday about putting together a basket of a few stocks that would benefit from the bounce, which we have underway at the moment. And I put together a six stock basket there some are more commodity plays where there's one commodity play, which is actually a gold stocks are going against the trend there one's a travel play ones are retail one is a platform, the other is a more prosaic GMG, which is the logistics provider and one also is in the banking sector, the investment banking sector. So if you've got any interest in looking at those six stocks, I'll put together the prices just the monitoring. This is a short term kind of bouncing basket, I guess at that had been very oversold markets doing well this morning, although it's not exactly massively convincing in terms of volume, but I guess we'll take whatever we can after the turbulence we have had just over a billion dollars worth of volume at how past tense and not exactly huge. Also, just a few things have had a positive announcement this morning or they've got some government funding and JMS Jupiter mining has had front page write up in the AFR as well, just a little bit on strategy to just talking about the market and the potential for this bounce and that it may be short and sharp. This is what we get in bounces and this is pretty much still with elevated cash levels in the small cap portfolio. I haven't sold anything it's silly levels was cashing out before Easter and we'll obviously the market does a decent baseline a few things but so far I'm happy to wait and watch for the time being seeing how things going because there are some big bargains around but also there's some shockers as well step one, which was the undies from Facebook, the guy selling bamboo underwear on Facebook, which at one stage I think was valued around 250 million bucks fallen 53% today with a sales update now valued at about 20 million bucks. So it just show some of the falls into these more speculative stocks are huge. So that's about it for me today are happy with the rally.
Ben O'Leary 07:12
Great stuff. As always, thank you, Henry. And Chris can't be with us today. He is resting up with COVID. But he has put in his manic Monday with a focus on the question that is plaguing investors at the moment. When is it safe to start buying stocks? Again, he's taking a look at what data some professional investors look for signs of the bottom with and what the data is telling us now. And finally, Tom, back to you. What have you got for strategy today?
Tom Wegner 07:34
Thank you, Ben, look at the bull and bear points that are driving the market at the moment. As you pointed out growth concerns lingering we're seeing bond yields start to top out encouraging though to see there is still some support from the bulls we've got although the path of least resistance remains to the downside. The ASX 200 is still in a slightly negative two sideways trading range plus a look at which stocks are likely to turn first. When the market does we're seeing some of that happened today. And what the bond market is telling us. So all the juicy details in strategy today, Ben.
Ben O'Leary 08:07
Great stuff. Thank you, Thomas. And our question of the day to day, are you buying this dip? And if so where are you looking Layton?
Layton Membrey 08:15
If I was cashed up, I would be buying the dip, I think but I would be looking at more of the value stocks. I know like bhp and stuff have come off the top a little bit so I'd be looking bit more long term investment strategy I think.
Tom Wegner 08:27
Very nice. Tom?
Tom Wegner 08:27
Similar to late one that stands out to me is Macquarie that's come off the top they had results we know that have conservative guidance, and there is a bit of technical support. They always seem to know how to make money and do well regardless of the environment. So that is my peak as a market today favourite we talked about a lot, but also just in the value space. Again, that's going to be that theme that's going to be underscoring a lot of the behaviour of the market for the next for the foreseeable future. So value stocks that have been sold off for my my tips.
Ben O'Leary 08:56
Very nice. Thank you, Tom Henry's had to run off to do a podcast so no answer there, but I'm sure we can get one from him later, I would probably reiterate your sentiment a bit there, Tom, I be cautiously maybe dipping the toe in the water on a very long term horizon. We know the data tells us that significant pullbacks 10 20% Or a long term perspective, it's typically not bad times to top up not everything back in but to top up in maybe even some passive things and ETFs look at what's max out a list of what's been sold off hard stuff in there that has a good long term story. So you want to be careful of the ritzy stuff as you said, but could be an opportunity to just top up a little bit. And with that, we'll wrap it up. Thanks guys.