Australian Stock Market Report - Banks, Woolworths, Qantas Shares & more
Market Commentary and Stock Tips - 4 May 2018
Banks get their breath back after getting mauled last week – Qantas flies higher with its Dreamliner – The share market delivers for its master the ASX – Retailers still can’t take a trick - except for the fresh food people.
Banks still alive after Right Royal Shellacking last week
After our major banks went a metaphorical 15 rounds with Mike Tyson last week due to the antics of cowboy Financial Planners and their executive masters, the market overall had a cold shower this week. It reflected that financial planners actually represent but a sliver off the banks’ body corporate, they’re not the corpus of the banks themselves. The result: - the banks’ share prices as a whole recovered quite significantly.
ANZ, National and Macquarie all saluted the judge this week and the results were quietly impressive- ANZ profits up 4% and dividend maintained, Macquarie got the gold medal –profits up more than expected and dividend up 14% compared with last yeah. The only laggard was the National Bank but even then its dividend was maintained - we await Westpac on Monday.
CBA goes into the Confessional Box
This week the CBA confessed it sins---- got its penance from APRA ---- and the share market gave it absolution ---the result CBA’s share price soared 2% on the day it left the confessional box. Quite incredible really!
The APRA report castigated the top levels of CBA, as being complacent; its senses dulled; lacking accountability and so it went on. All a little breath-taking really. But a genuinely contrite boss Matt Comyn responded that CBA will make the necessary changes to become a better bank. If this occurs CBA may well retain its premier poll position among Australia’s major banks.
The flying kangaroo just hopped a little higher
Qantas share price this week reached an all-time record high of $6.32. It’s all a far cry from that famous Melbourne’s Derby Day (28 October 2011) when the Chief Flight Controller Alan Joyce locked out his very own pilots, causing consequent airline mayhem! That day was a red letter day-a watershed- for Qantas when nothing could go right.
As if fighting with Virgin wasn’t enough, Alan Joyce got all gloves off with the government as well -and Qantas share price hit the canvas with a thud in 2012 at 96 cents! – But a chastened Qantas then regrouped, stopped fighting with all and sundry, made changes, got rid of old plans brought new ones, stopped the crazy war with Virgin and God smiled and oil prices fell—and time goes by ---- And so it was, by this week Qantas delivered a glowing set of numbers –It will buy 6 new Dreamliner planes which are 20% more fuel efficient than the old Jumbos – and that flows straight through to Qantas bottom line– In short Qantas looks a very attractive proposition.
Woolworths – fresh food people are back in town
Woolies is another stock that has been through the mill in recent years. But after a needed reassessment -- it shook itself up--- dusted itself off ---and got back in the race– apologies to Frank Sinatra. And this week its report showed that overall sales are up 4% over last year – no great shakes you say, but it beats Coles and its showing that it can cut the mustard with the likes of Aldi and Amazon. Moreover it’s not a bad stock to consider for the future given that its dividend yield is likely to be around 3-5%.
- ResMed - A very impressive result and benefits from the weaker $A.
- Seek - Another internationally exposed stock whose future also is positive.
- Wisetech - This IT infrastructure stock has been on the Big Dipper lately but its recent report was a winner.
- ASX - This grand master of the share market saw its share price spiral to a record this week. So long as the economy and share market continue to do well so should ASX.
- Central Banks - Its interest rates Ahoy-- gradually increasing in the US, and Australia likely to get on board later this year with a 0.25% rise.
Stock Tips - reserved for clients
- Monday: Australian Industry group construction; NAB Business confidence
- Tuesday: Morison’s budget and Retail Sales
- Wednesday: Westpac consumer confidence
- Friday: Home loans
In the U.S.A:
- Usual range of data: Inflation, Jobless figures, and consumer sentiment.
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