Australian Stock Market Report – Vocus, Steadfast, CSL shares & more

Australian Stock Market Report - Vocus, Steadfast, CSL, Telstra shares

The Market Last Week, Next Week and Stock tips - 16th June 2017

Australian Stock Market Report: Highlights

A Royal Bloodline for CSL in China – Vocus still out of focus but the vision is a bit clearer – Unemployment down - Consumers not “happy chappies” – But business is Cock-a-Hoop – May versus Macron political points even after first encounter – Rates up in the U.S -- but that’s good as its economy is purring

The Market - A purple patchor a false dawn?

Over the four trading days to Wednesday this week the market soared by almost 3%.  Indeed Tuesday’s rise was the best the since last November!  But, all good things do come to an end and the market fell 1.1% yesterday, but up again today..  What we take out of this though, is that June is a bipolar month.  Some investors like to crystalise losses for tax purposes before the end of the financial year, while “scuttlebutt” has it, that some fund managers may like to see share prices move up before the end of June which some detractors call window dressing. 

It’s not powered by elephant juice – it’s just a great stock called CSL

CSL announced this week that it is was buying 80% of a Chinese blood plasma manufacturer for $US352 million.  Significantly, CSL already has a strategic presence in China developed over the last 20 years.  This purchase will be funded through CSL’s internal resources, and the company will not be asking shareholders to contribute any money.

My View: Reserved for clients

It’s not an old tram conductor – but insurance broker Steadfast still clips tickets

Steadfast is an insurance broking business, which provides a comprehensive range of services to several hundred insurance brokers both in Australia and overseas.  Although Steadfast only listed on the exchange 4 years ago, it has shown itself to be a strong share market performer and pays a full franked dividend of 2.20%, and its outlook is positive. 

My View: Reserved for clients. 

The Jekyll and Hyde of the economy – business and consumers

The National Bank’s survey of business confidence and conditions shows that this sector of the economy is doing reasonably well.  Indeed business conditions according to the survey are more buoyant than confidence.  On the other hand, consumer confidence is wilting, probably related to the fact that incomes according to official figures are fairly stagnant.  However if the government’s program of infrastructure spending gets underway in earnest, this can be beneficial to overall activity and conducive to subsequent wage and income growth.

Vocus – is the focus sharpening a bit?

In its presentation this week Vocus provided updated, and reasonably upbeat information on its current situation, and that is pleasant relief for suffering shareholders.  Moreover Vocus have confirmed their profit guidance for this financial year.

My view: Reserved for clients 

U.S. Economy comes up Trumps - so interest rates get tweaked upwards

The U.S. Central Bank this week touched up interest rates by 0.25% to a range of 1%-1.25%.  Accompanying this decision were forecasts over the next few years of key economic indicators, and these were all quite positive.  In particular over the period to 2019 - it is expected that GDP growth will be moving upwards at a rate of about 2% p.a., inflation averaging about 2% p.a. and the unemployment rate at an industrialised  world best level of just 4.2%, over the next 3  years.

Conclusion

As we accelerate towards the end of the financial year, we can expect some mild turbulence in the share market for reasons already outlined.  But also the later part of June and early July are periods when dividend seeking investors tend buy up shares of major dividend payers including (CBA; Telstra; ASX; among others).  These companies will be making reports in early – mid August with associated dividend announcements.  Accordingly investors who buy those shares in the near future will receive 3 dividends in the space of about 15 months.

Stock Tips

Reserved for clients 

australian stock market report

Looking ahead in Australia

Australian Stock Market Report Michael Heffernan Phillip Capital

Looking ahead in the US

Home sales figures, jobless figures and manufacturing data.

 

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About Michael Heffernan

+61 (3) 8633 9925 Email Profile

Michael Heffernan has over 30 years’ experience in the finance and securities industry and is currently a Senior Client Advisor and Economist with a leading Australian Sharebroker Phillip Capital after having been Chief Economist/Lawyer with the Australian Stock Exchange for 13 years, and an Economist with Commonwealth Department of Employment and Industrial Relations for 11 years.

Most recently Michael topped the poll of the Australian Newspaper's Criterion column of his expert tipsters for 2014 with an average increase of 26% over the year. Also Michael was named Stock Picker of the year 2013 and 2016 at the Australian Stockbrokers Foundation Annual Awards Charity Dinner.

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