Australian Stock Market Report - Navitas, Wesfarmers shares & more

Australian Stock Market Report Navitas Wesfarmers shares more

A brief Market Brief and Stock Tips - 12 October 2018

Highlights

What a week we’ve had – Dow gets a drubbing – we cop the backlash – but reality does eventually sink in – our economy is still OK – and the US economy is still flying – the sun will still come up tomorrow and the trams are still running up Collins Street!

So – Is the market’s love affair with the Donald over – or is it just a lovers tiff?

As Galileo discovered, and Blood Sweat and Tears warbled in 1969 ‘What goes up must come down’. Fact is since the Donald got elected in November 2016 the Dow Jones was up 49% at its high this year. And simply put that cannot go on forever – even though the Dow got a 5% stagger this week.

It would now seem that the market’s flirtation with the Donald’s wild card policies of tariff hikes (price rises for imports which in the end adversely affect most Americans), maybe getting near a denouement. The US election is due in about a month’s time and that may put an end to the Donald’s tariff flutter and curb his more wild card policies.

So we can now have a cold shower

As usual we out do our American brothers on the road downhill. Our market has fallen about 5% in the wake of the American downdraught, and they, the architects of the downdraught have fallen about 4%. But sometimes we need to have a cold shower, reality bites and we realise that things are not really that bad.

So consumer confidence for example is doing particularly well with more optimists than pessimists – National Bank business confidence and conditions surveys similarly show a positive outlook and Job advertisements remain robust.

Pre University Education a sought after commodity

Education provider Navitas has seen a boom in share price following a takeover offer from private equity business called BGH Australia.

Wesfarmers provides details of the dates of its demerger from Coles (finalization expected in December) with all Wesfarmers shareholders getting one share in Coles for each Wesfarmers shares. My view both companies should perform better now that they are both respectively masters of their own destinies and can concentrate on their own knitting.

Stock Tips - Please contact Michael on 03 8633 9925 if you would like to discuss

australian stock market weekly report 

Next Week

In Australia:

  • Wednesday: Westpac Leading Index.
  • Thursday: Employment/Unemployment.

In the U.S.A:

Usual range of data: - on manufacturing, retail sales, industrial production, and building permits.

 

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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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