Australian Stock Market Report – Tabcorp, RIO, Commbank shares & more

Australian Stock Market Report - Tabcorp, RIO, Commbank shares

Market Commentary and Stock Tips - 2nd February 2018

Welcome back!

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

australian stock market weekly report

Conclusion

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.

Next Week

In Australia:

  • 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.

 

Disclaimer: This publication has been prepared solely for the information of the particular person to whom it was supplied by Phillip Capital Limited (“PhillipCapital”) AFSL 246827.  This publication contains general financial product advice.  In preparing the advice, PhillipCapital has not taken into account the investment objectives, financial situation and particular needs of any particular person.  Before making an investment decision on the basis of this advice, you need to consider, with or without the assistance of an adviser, whether the advice in this publication is appropriate in light of your particular investment needs, objectives and financial situation.  PhillipCapital and its associates within the meaning of the Corporations Act may hold securities in the companies referred to in this publication.  PhillipCapital believes that the advice and information herein is accurate and reliable, but no warranties of accuracy, reliability or completeness are given (except insofar as liability under any statute cannot be excluded). No responsibility for any errors or omissions or any negligence is accepted by PhillipCapital or any of its directors, employees or agents. This publication must not to be distributed to retail investors outside of Australia. 

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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