The Monday Report – 9 Sep 2019

Daily Market Reports | Sep 09 2019

By Greg Peel

The ASX200 closed the week on a strong note, kicking on from positive developments earlier in the week, for what they’re worth – withdrawal of the bill in Hong Kong, although clearly this hasn’t appeased the protesters, a Brexit no-deal being voted down, amidst what is still a complete mess, and trade talks to resume, which at best is better than not resuming.

The PBoC cut its bank reserve ratio requirement (RRR) on Friday but that had already been flagged.

We also had a weak GDP result last week which further cemented expectations of another RBA rate cut next month.

Closing around 6650 on Friday, the index is now -200 points shy of the all-time high of around 6850 posted at the end of July, and 250 points above the mid-August bottom of around 6400. So we’re more than half way back. But we’re still -3% shy when the S&P500 is only -1.6% shy of its all-time high.

All sectors bar two closed in the green on Friday, those being utilities (-0.1%), which have suffered on a rebound in bond rates, and industrials, which fell -0.15% for reasons unclear. There were no big ex-divs in the sector on the day and no industrial stock made the top five losers’ board.

Maybe it was due to the currency, which has rebounded over a cent from its recent low, but then that would typically impact on healthcare, and that sector closed up 0.9%.

IT led the risk-on charge, up 2.2%, while the banks (+0.8%) provided the clout.

On the individual stock front, Speedcast International ((SDA)) again topped the list as it continued to rally back from its near death experience. Cooper Energy ((COE)) gained 6.0% on a new gas discovery.

Pro Medicus ((PME)) fell -12.1% after two of the company’s founders sold one million shares each, and otherwise there were a couple of gold miners in the top five losers as well, as the gold price slipped back.

All in all nothing overly notable as risk-on continued to play out.

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