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The Good Morning Report

Posted on February 16, 2023

The latest market news, commentary and strategy by Adrian Rowney 

5 Things that Grabbed my Attention

1.  CBA announced it wrote off $586mil of bad debts as higher rates start squeezing some of its customers....The nasty cycle has started. AVOID FINANCIALS

2. Warren Buffet sold $5.5bn worth of bank stocks last quarter....another red flag.

3. Property prices in some of those regional areas that took off during the FauciFlu, have come back to earth somewhat....Corelogic reported that prices over the past 12 months in Byron have fallen 26.1%, Mullumbimby off 28.2% and Ocean Shores down 24.9%....I can't remember property EVER being this volatile.

4. Macquarie and Credit Suisse think the Star Group (SGR) need to raise around $400 mil to fix its balance sheet.....And I think it could even be more if the pending AUSTRAC fine is a monster from the deep!

5. The FTSE (UK stock market) cracked 8000 points for the first time ever overnight....Investors were happy that inflation came in @ a lower than expected rate of 10.1%....10.1% = average joe is getting screwed. 

ASX Market Update

ASX 200 down 78 points to 7352

Our banks got a decent touchup as CBA officially kicked off the inevitable cycle of bad debts with $586 mil worth of write downs.....I really don't see the need to be invested in the sector; sure a bank like CBA is solid, but you are paying around 19 times earnings -  so it's definitely in the expensive territory, plus we are likely to see some chaos in the global financial system this year which means the cost of bank funding could spike....AVOID FINANCIALS. 

Random Observation

An excellent quote from one of the greatest investors of all time....

The Day Ahead

Reporting today: AMP, DHG, EVN, GMG, IPL, NAB, MFG, NCM, SHL, SUL, WHC, TLS, SUL

  • Our SPI is up 29 points
  • Bitcoin up 4.9% to $23,294

Movements affecting our resource stocks today (USD)

  • BHP in the US down 0.54%
  • Gold down 0.9% to $1848
  • Paper Silver down 1% to $21.65
  • Copper down 1.2% to $4.02
  • Brent Crude FLAT @ $85.69
  • Iron ore up 0.8% to $123.45

Asian Market Update

China down 0.39%, Hong Kong fell 1.4%, Japan dipped 0.37%

Alibaba and JD.com are in the BETASHARES ASIA Technology Tigers ETF which trades on the ASX under the code - ASIA. BUY

Global Market Update

US Market

DOW up 38 points to 34,128

We saw a positive session on Wall Street as US retail sales grew at 3% in January, which was way higher than the expected 1.9%....Tesla shares continue to gain, adding another 2.4% - the shorts have been getting murdered on this one.

European Markets

Brits up 0.55%, Germans put on 0.82% and Frenchies rallied 1.2%

10.1% inflation in the UK - what a shocking situation as STAGFLATION (rising prices plus weak economy) takes hold.

Key Market Summary

General Advice Warning
The information provided in this post is general information only. Unless otherwise stated the information is not designed for the purpose of providing personal, financial or investment advice. Any examples are presented for illustration purposes and past performance is not a reliable indicator of future performance. The information provided does not take into account your particular investment objectives, financial situation or investment needs.

Without limiting the generality of the above paragraph no person, persons or organisation should invest monies or take action on the reliance of the material contained in this post, but instead should satisfy themselves independently (whether by expert advice or otherwise) of the appropriateness of any such action. Unless otherwise stated the information presented is not a recommendation to invest in any investments, securities or financial products.

This service, like all other financial services, is subject to market forces and unpredictable events that may adversely affect its future performance. Whilst all care has been taken in compiling information in this post, and is provided in good faith, it is not to be relied upon as a substitute for professional advice. The views expressed are commentary only and the writer accepts no responsibility for the accuracy, completeness or timeliness of the information.

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