RIO and BHP Are Close To Support

Posted on | by Todd | Leave a Comment on RIO and BHP Are Close To Support

The share prices of  RIO and BHP are both approaching key support levels which could create investment opportunities.

The are both trading below their 30-day moving averages but are close to support $58.80 and $23.50, respectfully.

The attached charts show that these support line have held and became good buying levels for a move higher over the last six months.

However, we are mindful of the importance of exports to China for both of these companies. Overnight, China’s five largest banks reported earnings which showed steady results but increases in the  percentage of non-performing loans tied to real estate.

It’s worth noting that Chins’a top five banks are considered the largest in the world in terms of assets. A sharp contraction in any of those five could trigger weakness in RIO and BHP

Chart – BHP
Chart – RIO

 

ASX – Stocks to Watch

Posted on | by Leon Hinde | Leave a Comment on ASX – Stocks to Watch

A number of stocks within the ASX top 50 appear to be setting up medium term short signals.

We’re mindful of the upward bias in equity indexes, however, much of this is driven by broad inflows into index funds and valuations are becoming stretched, even if Q1 earnings in the US hit their target.

Here is a list of the names that are worth taking a closer look at….

AMP, LLC, SGP, CPU, JHX,  & AGL.

Chart – AMP
Chart – CPU

 

 

 

 

 

US 10YR Yields & TCL

Posted on | by Leon Hinde | Leave a Comment on US 10YR Yields & TCL

The chart below shows the yield on the US 10YR bonds retracing from a high of 2.62% to now trading at 2.39%. We find this interesting given the positive commentary around US growth and market expectations for further rate rises in 2017.

The by-product of the lower US yield story has manifested in domestic yield sensitive names such as Transurban being among the best performing stocks within the ASX50.

Chart – US 10YR
Chart – TCL

RBA Preview

Posted on | by Todd | Leave a Comment on RBA Preview

There has been plenty of Central Bank action on interest rates around the world but none of it coming from the RBA.

That trend is very likely to continue at tomorrow’s RBA board meeting where the official cash rate is expected to remain at 1.5%.

Australian monetary policy is currently stuck between underlying inflation, which is below target,  and accelerating house prices.

The market may move on comments about the Aussie Dollar or the banks recent out-of-cycle rate rises, and that APRA has again slightly tightened the terms on investor lending.

As such, real estate names will be in focus after the announcement.

Chart – YANK
Chart – MVA (Aust Property ETF)