Morning Note - Australia continues to underperform the region

by James Gerrish

** 10/03/11  - 9.28am  -  by James Gerrish** 
 
  • The market closed flat last night with the DOW JONES off -1 point to settle at 12213.
  • This came on the back of a negative trading session on the local market yesterday that saw the S&P/ASX 200 drop more than 40 points and close below that 4800 support level we've been harping on about. 
  • I think if we had of seen further weakness in the US last night, this break of technical support would have prompted some fund liquidation today. 
  • This didn't happen and as you can see from the chart above of the DOW, the US market remains in consolidation
 
  • It was an interesting session yesterday with Australia significantly underperforming other regional markets. 
  • We had consumer confidence data that came in below expectations and its seemed there was a clear move out of the resource space into the banks
 
  • Goldman Sachs lists the banks in order of preference - NAB (1), ANZ (2), CBA (3), WBC (4)
  • NABs obviously there on a valuation perspective and potential upside from higher levels of exposure in Europe. This was out of favour last year but signs of improving European conditions lead by  Germany is likely to benefit NAB. 
  • On the market today, FUTURES are pricing in a marginally positive open matching +2 points higher
James Gerrish 
(02) 9375 0117

Disclaimer

James Gerrish is an Authorised Representative (Rep No. 352904) of Shaw Stockbroking Limited ("Shaw Stockbroking"). Shaw Stockbroking is a holder of Australian Financial Services Licence No 236048. Shaw Stockbroking, its directors, officers, associates and employees each declare that they, from time to time, may hold interests in financial products and/or earn brokerage, commission, fees or other benefits from financial products mentioned in this e-mail or attached documents. Unless specifically stated within this page or an attached document, any information communicated by this e-mail constitutes unsolicited general financial product advice which has been compiled without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you need to consider the appropriateness of this information having regard to your individual objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance or relate to a future matter.
 

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