US Interest Rates

Posted on | by Leon Hinde

The US Federal Reserve Fed funds rate is currently between zero and 0.25 per cent. QE is being reduced from $US120 billion to $US105 billion a month and then a further reduction to $US90 billion from Jan onwards.

Current market expectations are for the Fed to raise its cash rate from the record low 0.1 per cent level in 2023.

Iron Ore Trades @ $102.75

Posted on | by Leon Hinde

The price of iron ore rose 2.9 per cent to $US102.75. A relaxation of curbs on Chinese property developers, rising margins for steel producers, and signs that Chinese authorities will add fiscal and monetary support look positive for the commodity.

Woodside – Algo Buy

Posted on | by Leon Hinde

Woodside Petroleum is under Algo Engine buy conditions and is a current holding in our ASX 100 model.

Woodside is expected to issue almost 1 billion new shares to pay for the acquisition of BHP’s petroleum business under the $41bn merger deal. BHP shareholders will receive shares in WPL and we may see some overhang of selling for the market to absorb, however, we view the deal as a vote of confidence in the new merged entity, given BHP’s decision to merge their energy assets rather than pursue a cash deal.

  • Woodside will acquire BHP’s oil and gas business in a proposed $41 billion merger deal
  • The merger will relieve pressure on Woodside whose existing assets are depleting

Our Pexa Trade Rallies 19%

Posted on | by Leon Hinde

Pexa Group has helped transform conveyancing from a clunky paper-based process into a digital one. PXA was recently listed on the ASX with a market cap of $3bn.

FY21 underlying earnings doubled to $110 million and analysts are forecasting a further 20% increase in FY22.

CBA & Link are major shareholders.

23/11 update: Our Pexa trade has been closed, generating a 19% return.

Crown – Our Trade Rallies 25%+

Posted on | by Leon Hinde

The current weakness in the Crown share price could be a buying opportunity. It’s unlikely that the current COVID-related operational impacts are going to deter the interested parties who have put forward takeover offers.

Continue to track the CWN share price and wait for a cross above the 10-day average.

12/8 update: CWN is now trading above the 10 day average.

18/10 update: Crown recovery continues, buy with a stop loss below $8.75

1/11 update: The recent move back down to $10 is likely to find renewed buying interest. We remain long CWN shares.

22/11 update: Crown has now rallied 25%+ since the trade was opened. As anticipated, Blackstone has pitched a new offer at $12.50 a share in cash, up from its previous bid of $12.30 in May.