US Equities & Bonds

Posted on | by Leon Hinde | Leave a Comment on US Equities & Bonds

The US 10 YR treasuries  have fallen from 2.62% yield, to now trading at 2.23%. US economic data is deteriorating and the bond market is suggesting that a June rate hike is now less probable.

Lower bond yields make it more difficult for banks to expand their net interest margins.

The following graphs show the recent trends in GE and Goldman Sachs. We’ve been following GE since January as a leading indicator of the headwinds facing global industrial companies.  We’re now seeing this weakness manifest in the beginning of a more broad based equity market sell-off.

Chart – GE
Chart – Goldman Sachs

 

Orica Slips On Lower Earnings

Posted on | by Todd | Leave a Comment on Orica Slips On Lower Earnings

Orica Limited has reported that their 1H17 net profits after tax was $195 million, which beat the expectations of $185 million.

However, ORI shares are down close to 2% at $18.26 as revenues fell and guidance on key Ammonium-Nitrate prices are pointing lower.

An oversupply of Ammonium-Nitrate will likely act as a drag against future earnings and cap the share price below $19.25.

 

BHP Assets Are In Play

Posted on | by Todd | Leave a Comment on BHP Assets Are In Play

Shares of BHP have opened firmly above $24.00 as overnight comments from Andrew Mackenzie confirm the company is likely to spin off some assets in the near-term.

Mackenzie was addressing a major mining conference in Barcelona when he gave the strongest indications yet that BHP might be giving ground to New York hedge fund Elliott Management’s aggressive bid to break up the mining giant.

As such, we see this development as underpinning the stock, even as Crude Oil and Iron ore prices remain in the lower end of their 6-month trading ranges.

The ALGO engine triggered a buy signal for BHP on May 5th at 22.50. Over the last few days, we have suggest taking profits on long positions above $24.00 and looking to re-enter at lower levels.

NAB Shares Still Pointing Lower

Posted on | by Todd | Leave a Comment on NAB Shares Still Pointing Lower

On May 4th, we posted a report that the NAB’s H1 results would likely lead to a sell off back to the January lows of $30.50.

After going ex-dividend today, NAB shares have traded down to $31.65. A combination of the new bank levy and increased bad debt provisions will likely continue to weigh on the stock price.

We maintain our $30.50 target and suggest buying put options into June or selling covered calls to enhance portfolio returns.

 

Property Stocks Under Pressure

Posted on | by Leon Hinde | Leave a Comment on Property Stocks Under Pressure

After the strong rally in SGP, LLC, GPT and MGR, the price action looks to be rolling over, pointing lower, and we’ll watch these names closely. SGP appears to be showing the most selling pressure with the current price action taking out the 4.74 low formed on the 26th of April.

Our Algo Engine generated a buy signal on MVA.AXW (Vaneck Vectors Australian Property ETF) back in November at around $18.40, the ETF traded up to $21.30 and in the last week it’s starting to run into selling pressure.

 

Chart – SGP
Chart – MVA

 

Cyber Security ETF: HACK

Posted on | by Todd | Leave a Comment on Cyber Security ETF: HACK

With a widespread ransomware attack hitting thousands of computer systems over the weekend, we expect increased interest in the cyber security Exchange Traded Fund with the symbol: HACK.

HACK is made up of the leading companies in the global cyber security sector. These stocks include Symantec, Check Point and Cisco Systems.

This ETF started trading in September of last year and offers investors exposure to a diversified portfolio of the world’s largest cyber security companies in a single transaction.

BetaShare ETF: HACK