Fortescue – FY19 Earnings Result

Fortescue Metals Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.

The FY19 earnings result was solid with underlying EBITDA US$6b, the strong result helped to drive down net debt to US$2.1b which reflects a gearing ratio of 16%.

A final dividend of A$0.24 was declared, lifting the full-year payment to
A$1.14, translating to a yield of 16%.

Volatility in spot iron-ore prices continues to be a key driver of the share price.  Iron ore futures are now trading at their lowest price in more than six months.

Note: RIO at $83 is now on our watchlists and we suggest tracking the short-term indicators for a reversal higher.



NASDAQ – Key to Watch

The NASDAQ remains a key Index to watch as a reference for equity markets. Whilst the index trades below the mid-week high of 8050, investors should be cautious.

Move to an overweight position in defensive sectors such as healthcare, infrastructure and consumer staples. Also, focus on individual companies conducting large scale share buybacks.

Consider hedging using index futures or the inverse ETF BBOZ.

Going forward, track the close in the NASDAQ against the short-term momentum indicators as your hedging reference.