Uncertainty remains, presenting opportunity for discount buys
August 27th, 2010 by Patrick Pecci
Closing Data
| Current | Change | % | |
|---|---|---|---|
| Dow Jones | 9,985.81 | -74.25 | -0.7% |
| NASDAQ | 2,118.69 | -22.85 | -1.1% |
| S P 500 | 1,047.22 | -8.11 | -0.8% |
| FTSE 100 | 5,155.84 | 46.44 | 0.9% |
| Nikkei 225 | 8,906.48 | 61.09 | 0.7% |
| ASX 200 | 4,356.00 | 35.9 | 0.8% |
| COMEX Gold - Dec 09 | 1237.7 | -3.6 | -0.3% |
| COMEX Silver - Sep 09 | 19.022 | -0.05 | -0.3% |
| COMEX Copper - Sep 09 | 330.45 | 9.35 | 2.9% |
| WTI Spot | 73.36 | 0.84 | 1.2% |
| AUD-USD | 0.886 | -0.0007 | -0.1% |
| Aluminium | 2,027.25 | 35 | 1.8% |
| Copper | 7,116.25 | 35.5 | 0.5% |
| Lead | 1,985.90 | 51.9 | 2.7% |
| Nickel | 20,541.40 | 510.4 | 2.5% |
| Tin | 20,420.75 | 55.75 | 0.3% |
| Zinc | 1,960.41 | 28.41 | 1.5% |
Good afternoon investors and traders,
Yesterday’s options expiry saw the XJO finishing on its day high, up 36 points @ 4356. A weak second half of August has seen the market shed over 6%, led by the banks and BHP, on continued fears of a double dip recession out of US, the world’s largest economy. Uncertainty surrounding our Federal election has also dampened the market’s mood.
Mining giant BHP reported on Wednesday with a US$12.5B profit and a US45c dividend to be paid next week, in line with analyst estimates. The company reported that, although the short-term outlook for the global economy is somewhat uncertain, they continue to expect strong growth in demand for commodities over the medium and long term. They also expect China’s GDP growth, their biggest customer, to slow to a more sustainable level of about 8% from 2011.
Technically, we would like to see 4320 on the XJO hold, with a potential reverse head and shoulders formation in play if we rally from current levels. In any case, the recent pullback has given investors and excellent opportunity to enter into blue chip stocks at a discount to future price targets. We like AWC, BHP, BSL, FMG, LEI, MQG, OSH, QBE, STO, WBC, RIO and WPL at current levels.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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