Capio Capital Market Overview and Trade Ideas Asian markets are taking the cue from Wall Street and are trading mostly in the black with the exception of China and Hong Kong. The Australian market is seeing modest gains with contributions from all sectors, BHP Billiton is up +2.6% and +1%. In Japan, stock are benefitting due to a weaker yen. Chinese stocks tumbled led by banks as regulators curb on geared trading. The major US indexes snapped a 5 day losing streak to end the day firmly in the black. Bargain hunting, higher oil and commodity prices and upbeat economic data all spurred markets higher. US CPI fell by -0.4% in December, this index was flat if you excluded energy and food prices. For December, industrial production came in lower than expected and consumer confidence increased. Corporate earnings expected this week include American Express, Morgan Stanley, General Electric, IBM, Johnson & Johnson and McDonald. Bargain hunting was the order of the day as commodity prices and Brent crude had bounced from the lows. The majority of European markets closed positively with the exception of the Swiss market which sunk further after the abolishment of the currency cap and rate cut. Eurozone CPI came in lower for December but in line with expectations, Germany CPI rose by +0.2% and Eurozone new car sales improved. Uncertainty prevailed as the market closed a volatile trading session relatively flat; the Top40 was down -0.2%. Resources gained +2.9% on the day, clawing its way back from heavy losses earlier during the week to end the week -0.16%, financials fell -0.3% with gains in insures offsetting losses in banks and Industrials lost -1.15% as the stock performance was a mixed bag. Foschini withdraw their cautionary after announcing they purchased a controlling stake in an international fashion retailer for R2.5 billion. The value traded was R16.6 billion and the rand was hovering around 11.59 to the US dollar at the close. Trading Ideas 1) Long SHP from R172, the stock has confirmed support at R172 six times and has formed a inverse head and shoulders formation. We believe this stock will move much higher in the short term. 2) Long MTN from below R200, some buyers have been coming in below R200, we believe MTN represents great value at these levels.
Posted on: Mon, 19 Jan 2015 07:16:08 +0000