Capio Capital Market Overview and Trade Ideas Asian markets have pared early gains this morning after a surprise fall in Chinese trade figures has reigned in the positive sentiment. Chinese exports sank by 6.6% in March extending the February drop and missing a forecast gain of 4.8%. In Australia the unemployment rate fell after the country added more jobs than forecast and South Korea kept rates on hold while boosting its economic growth outlook. Adding to the news flow is inconclusive election results in Indonesia which is weighing heavily on its markets (-3.5%). BIL -1.2%; RIO -2% US markets rose last night led by a rebound in technology stocks as they recovered some footing after a heavy bout of selling. Also helping the mood was commentary in the Federal reserve minutes where it was stated that the market was too aggressive in its perception of the speed and timing of interest rate increases. Alcoa jumped 3.5% after results beat the street and investors remain firmly focused on the quality of earnings this season. JP Morgan and Wells Fargo are two of the heavyweight names which report on Friday. Amongst the markets top gainers on the day was Facebook (+7%) and biotech stocks which rallied by over 4%. Oil also touched a 1 month high. European markets were hanging onto gains at our close after US markets opened in positive territory. Investor speculation that the ECB would use asset purchases to help sustain the global economic recovery helped buoy the mood. Greece’s central bank chief alluded to the regional bank reflecting on a design of a QE program during an interview. Several broker recommendation changes across the region impacted specific stock prices which resulted in moves greater than the average for the likes of Kingfisher, IMI, Volkswagen, Porsche & Deutsche Wohnen. The local bourse ended higher yesterday, gaining roughly 0.5%, in line with global markets which seemed to find some stability after a pretty volatile week. In the news were Woolworths (-7.5%) which sank on huge volume after announcing the acquisition of David Jones in Australia for R21bn – a rights issue was also announced to part fund it. Famous brands gained after alluding to expansion plans for its Wimpy, Steers and Debonairs brands in the middle east and Telkom rallied on a story that it would look to cut R1bn a year in costs out of the business over the next 5yrs. On the whole it was a fairly strong day though with most sectors on the up – it was just the banking stocks which really felt some selling pressure – the sector gave up 1.5%, retail fell on the Woolworths story with Foschini, Steinhoff and Mr. Price amongst the other notable sliders in that space. Value traded at the close was around R19bn with the ZAR hovering at R10.46 to the US Dollar. Trade Ideas 1) Rang Trade: Long CFR off R100. Stock has been trading in a range from R100 to R104. If it breaks R104, the next target price is at R112.
Posted on: Thu, 10 Apr 2014 07:07:51 +0000
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