Local investors will take their cue from new highs in US stock indices and a positive session for oil and most industrial metals. This will deliver a positive start for the ASX 200 this morning. Market historian and Macquarie Group shareholders will be watching with interest to see whether today will be the day the stock finally joins the $100 club after looking likely to do so in 2007.
While US indices inched into new high ground last night, be a key question for the remainder of the week will be whether this can be parlayed into a decisive move higher. Current high valuations and the Thanksgiving holiday may yet prove barriers to a major risk on move at this stage.
CYBG continued its good progress after being spun off from National Australia Bank. Management is doing a good job on improving productivity, with a significant drop in the banks’ cost to income ratio delivering a consensus beating 33% gain in underlying profit. However, investors may be a little underwhelmed by the token return to dividends in the form of a 1 penny payment. Concerns about the impact of Brexit on the UK economy and recent softness in the Greater London housing market which makes up more than 30% of CYB’s mortgage portfolio are also likely to constrain valuations.
CYBG has an interesting chart pattern with price confined to an upward sloping trend channel and recently showing bearish divergence with the RSI. In these circumstances, a typical chart based strategy would be to sell if price rises to and again rejects the channel resistance.
Stronger metal prices saw a positive session for Aussie Dollar. Market focus will now be on this morning’s Construction Work Done data with a forecast downturn in construction data over the next year being seen by many as one of the key variables for the Australian economy