Australian Stock Market Report – Tabcorp, RIO, Commbank shares & more
Market Commentary and Stock Tips - 2nd February 2018
It’s great to be back after a nice little break and looking forward to all the excitement that 2018 and can bring.
“After the New Year’s revelry comes the hangover?
Indeedsome market watchers my well opine that “We started the year with a proverbial bang and ended with a proverbial whimper. We said farewell to 2017 in a blaze of market glory with our share market full of Christmas cheer, brimming over about 4% during November and December. But alas all that effervescence was to peter out in the first month of the New Year”. However this opinion may be a bit unfair as the market only dropped slightly in January and on the first day of February we recovered all the ground lost in January!
But its expectations that drive the market isn’t it?
Astute market watchers know that the market is powered by expectations, and I agree. Over the next few weeks we have one of the two signature events of the share market year when the over 2,000 companies listed on the ASX make their half yearly and yearly reports. Specifically, the December half yearly reports start in earnest next week with the Commonwealth Bank and RIO on Wednesday, and Tabcorp and REA Group on Thursday and Friday. I wouldn’t be surprised to see a robust CBA result and their dividend touched up a bit.
Question of the week - Why is the Commonwealth Bank, like President Kennedy
Those with a keen sense of history will know that John Fitzgerald Kennedy (JFK) was aged 42 when he took the mantle of President of the United States in January 1961. Over his short time in the job he made an indelible mark on the psyche of the American and indeed world populations. Facing off Nikita Khrushchev over the Cuban missile crisis of 1962, and his vision to have a man on the moon by the end of the wild 60’s decade was achieved in 1969 when Neil Armstrong placed his boot on the surface of the moon.
So what’s then the link to the Commonwealth Bank? Answer:-This week we saw the ‘new kid on the block’, Matt Comyn appointed as chief teller (CEO), and he is only 42 years of age. So that’s why the CBA is like JFK.
Had a glass of Grange lately? – Americans love it
Treasury Wines Estate is the company that makes of Penfolds and other premium labels. This week it delivered a scintillating report with profit up 37% and its outlook is continuing to be robust. It’s a stock which may whet the whistle of discerning investors.
Have you bought something on lay-by lately? - Is it the dinosaur of retailing?
A new upstart company called After Pay Touch has taken the retail sector by storm. It’s focused on replacing the tried and true lay-by system by reinventing the system. It enables customers to buy and get the goods now from retailers, and pay later. The retailer then provides After Pay Touch with a commission. Simple, but risky to APT you say – but APT have designed the system so that non payments by customers are minimal. Please ring me if you would like more details.
Stock Tips - Reserved for clients – contact Michael at Phillip Capital on 03 8633 9925 if you would like access to his advice
As I said on previous occasions I don’t foresee any major storm clouds on the horizon, as world economies are continuing on the upward trajectory. Accordingly I believe that we are in for a pretty good performance this year. In deed we may well reach the highest level ever on our share market, and show an increase of around 12% to eclipse the 2007 high point of 6,851.1.
- Monday: ANZ Job adds, Australian69 Industry Groups services survey
- Tuesday: Retail sales and Reserve Bank decision on interest rates – no change
- Wednesday: Australian Industry Groups construction services survey
- Thursday: NAB business confidence
- Friday: Reserve bank statement of monetary policy
In the U.S.
A range of data mainly on the non-manufacturing and services sector.
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