Will Gold Get A Lift From The FOMC?

Posted on | by Todd | Leave a Comment on Will Gold Get A Lift From The FOMC?

The Price of Spot Gold slipped to a 3-week low of $1309.00 as the inverse correlation to the USD strength continues to influence price flows.

By the NY close, the yellow metal had found buyers into the weekend to settle at $1314.00.

With the FOMC expected to raise the FED Funds target on March 22nd, market commentators have noted that the price of Gold has rallied  after the last 5 rates hikes in this cycle.

As illustrated in the chart below, Spot Gold traded at $1240 when the FOMC last raised rates on December 13th. By January 25th, Gold had rallied almost 10% to reach $1350.

Some of the local mining names we are following into the buy zone include NCM, EVN, SBM and SAR.

In addition, investors looking for a “pure play” on Spot Gold can buy the BetaShare Gold ETF with the symbol: QAU

Spot Gold

BetaShare Gold ETF: QAU

 

Property Stocks Find Buying Interest

Posted on | by Leon Hinde | Leave a Comment on Property Stocks Find Buying Interest

As the US yield curve flattens, which is caused by the long-end of the curve no longer increasing at the same rate as the shorter-end, we’ve started to see institutional money flow back into ASX listed yield sensitive names.

Our preference among these, within the property sector is GPT, SGP, and WFD, (based on valuation grounds).

Within Utilities and Infrastructure, we continue to like AGL, SYD and TCL.

 

 

Wesfarmer Plans To Spin off Coles

Posted on | by Todd | Leave a Comment on Wesfarmer Plans To Spin off Coles

Shares of WES have opened over 5% higher to $43.60 as the company announced that it will divest its Coles grocery business into a stand-alone ASX listing.

This new entity will be made up of over 800 supermarkets and bottle shops, 700 gas stations and 88 hotels.

The action will result in WES shareholders being granted shares in the new Coles business after WES retains a 20% equity holding.

This is all pending board, shareholder and regulatory approval.

WES was added to our Top 20 Model Portfolio about 2 years ago at $39.05. We would consider WES a Buy/Write opportunity at current levels.

Wesfarmers

 

FMG Gets A Lift From Higher Ore Prices

Posted on | by Todd | Leave a Comment on FMG Gets A Lift From Higher Ore Prices

Shares of FMG are firming back over $4.80 in early trade as Spot Iron Ore prices rose for the second consecutive day to reach $72.00.

Analysts have pointed to the end of China’s winter curbs on metal production as supporting demand for all grades of Iron Ore over the near-term.

Internal momentum indicators on the daily charts are improving and we see the next resistance level at $5.25 and support at $4.60.

FMG is part of our Top 50 Model portfolio and we suggest that investors can buy the stock at current levels for a move back into the $5.40 area over the medium-term.

Fortescue Metals group

 

 

 

 

ALGO Buy Signal For Oil Search Ltd

Posted on | by Todd | Leave a Comment on ALGO Buy Signal For Oil Search Ltd

Our ALGO engine triggered a buy signal for OSH into the ASX close yesterday at $7.05.

OSH is widely regarded as owning some of the southern hemisphere’s best LNG assets and as such is a favorite stock for retail investors.

The stock’s performance has closely tracked the global energy markets, which have been very active recently.

Technically, we see scope for a upside move to $7.80 and good support near the $6.90 area.

Oil Search

U.S. Retail Sales Weighing On Rates

Posted on | by Leon Hinde | Leave a Comment on U.S. Retail Sales Weighing On Rates

U.S. Retail Sales fell for a third straight month in February as households cut back on purchases of motor vehicles and other big-ticket items, pointing to a slowdown in economic growth in the first quarter.

Consumer spending, which accounts for more than two-thirds of U.S. GDP, appears to have slowed at the start of the year.

The combination of weak consumer spending data and global manufacturing data has been enough to see yields run into resistance.

The peak optimism on synchronized global growth and inflation pick-up, now appears to have passed.

With yields moving lower, we’re likely to see a better environment for the yield sensitive sectors. Telecommunications, Utilities, Consumer Staples and Real-Estate.

Some of the local names in these sectors include: SYD, TCL, AGL, GPT, SCG and WFD.

The chart below illustrates the yield on the 30-yr bonds falling relative to the shorter dated 2-yr bonds. This is typical during a period of slower economic growth.