Daytrading Sep 18 afternoon

  1. 10,296 Posts.
    Thanks Shants and regulars.

    Half-time round-up:

    The share market fell to within a couple of points of a five-month low this morning as investors continued to dump yield stocks and other sectors impacted by a surging US dollar.

    At lunchtime the ASX 200 was 26 points or 0.5% weaker at 5381 after earlier falling as low as 5373, just above the July 1 nadir of 5371. The market has not traded below 5370 since mid-April. A volatile morning for the big banks saw the financial sector rally then plunge to its lowest level since March, lately down 0.6%. Energy +0.2% and property trusts +0.2% were the only sectors to advance. Gold -2.7% and metals & mining -1.5% took the biggest hits.

    Yield stocks remained under pressure after the US Federal Reserve this morning mapped out the likely course of interest rate rises over the next few years, prompting Bell Potter’s Charlie Aitken to warn of significant market ructions ahead:

    "I completely disagree with commentators who think the equity market, but particularly high yield parts of the equity market, will be able to cope with the normalisation of long bond yields and cash rates," he told Fairfax. "There’s absolutely no doubt in my mind that: the USD will rise sharply; long bond yields will rise sharply; high yield equities will under-perform sharply; and volatility will rise sharply. You basically need to turn all the performance charts of the last three years upside down and that tells you what to sell and what to buy."

    Asian markets were mixed. China's Shanghai Composite edged up 0.02%, Hong Kong's Hang Seng lost 0.78% and Japan's Nikkei rose 1%. Dow futures were recently up seven points or less than 0.1%.

    Crude oil futures dropped another 11 cents this morning to US$93.95 a barrel. Spot gold was $1.50 weaker at US$1,223 an ounce. The dollar was buying 89.75 US cents.

    US futures are stable this morning, which is a hopeful sign after last night's wild swings - suggests at least that the market is not having any second thoughts. The XJO, on the other hand, looks awful. Hard to think this isn't a buying opportunity down here, but no one seems very enthusiastic about it. International money leaving Australian yield stocks for the US dollar/bonds? Personally, I had a pretty dismal morning. Had IVR as one of my 'sleepers' and pulled the pin for a small loss when the market thumbed down the latest drilling results. Took as high-risk trade in ACR just before the trading halt and will likely have to hold through the weekend. Also under-researched ARI before going in. Still expect it to come good but may have to wait until the rights offer expires before the share price recovers. Trading report card: F.
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