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END OF DAY REPORT

What happened today?

       

The ASX 200 closed up 59.6 points today

  • The bulls are back in town. Sprinting out of the gates today after a strong US market and short covering pre the FOMC meeting results tonight.

pic 1

  • Huge volatility today with a range between 2650c and 2750c for Woolworths (WOW) -0.15% as the shock departure of its CEO, Grant O’ Brien, first buoyed the stock then sellers emerged after the briefing. O’Brien had only been in the job for the last four years and fell on his sword after a disastrous run in the grocery business and the much publicised debacle of Masters. Sad really that after his departure, profit downgrade and news that 1200 staff are following him into his after life, the stock rallied then fell back again as analysts rushed for their sell button as it appears he is in no hurry to leave, with a November departure cited. It remains to be seen if this is a turning point but at least long suffering shareholders may have some light at the end of the tunnel.
  • Financials continued to glow green after moves from Warren Buffet yesterday, although Insurance Group Australia (IAG) -1.03% eased slightly and Challenger Financial (CGF) + 4.47% posted a solid gain after the recent Investor Day. Telstra (TLS) +1.49% continued its recent bounce whilst BHP+1.5% rose on better oil prices despite the Iron Ore price falling heavily yesterday. Fortescue Metals (FMG) – 4.3% were the big loser in the space. Sandfire Resources (SFR) +8.8% announced some positive drill results and joint venture partners Talisman Mining (TLM) + 105.8% were the standout showing the potential of the resource sector when good results come through.
  • Energy stocks were back in the bulls spotlight as oil moved slightly higher Woodside (WPL) +0.71%, Oilsearch (OSH) + 3.02%, Santos (STO) + 2.13% and Origin (ORG) + 2.44%.
  • Healthcare stocks were one of the few red spots as CSL – 1.1% continued to feel unloved despite an upcoming health conference where there will be presenting findings on their new haemophilia treatments.
  • In the small cap space Yowie (YOW) + 23.6 % was a surprise sprinter as news that they were cleared to sell their chocolate eggs through the US giant Wal Mart boosting their share price.

The case for the bulls is further strengthened with Exhibit 1

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  • New float today Adairs (ADH) +10.4 % started life with a good stag profit which should encourage the IPO pipeline after the recent series of disappointments.
  • Property prices in capital cities have been a huge focus in the media and government circles but bear in mind that a Chinese buyer is paying the same amount in Yuan today as they paid back in 2012.
  • Big night tonight though as Fed Chief Yellen announces the deliberations of the two day meeting. Hopefully we will get some clarification on the timing of any rate rise with September still the slight favourite. Is this the end of free money? We shall see.
  • The government today signed the long anticipated Free Trade Agreement with China. A momentous day for both countries allowing the Chinese better access to beef and red wine apparently.
  • China’s stocks are heading for their biggest three-day loss in a month on concern a world-beating rally has gone too far, too fast. The Shanghai Composite Index has slumped 0.8 %, extending a two day, 5.4 % decline.

Expect more insults to fly tonight as Greece teeters on the brink of a ‘Grexit’ and perhaps capital controls as early as this weekend. FOMC the other big event. Exciting times.

Have a great evening

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