Tabcorp And Tatts

Posted on | by Todd | Leave a Comment on Tabcorp And Tatts

Shares of Tabcorp have had a good week and are pushing up against the $4.50 level in early trade.

Before the open yesterday, the ACCC, Australia’s competition watchdog committee, gave an upbeat report that some of the “red-light” issues facing Tabcorp and Tatts‘ proposed $11 billion merger can be easily resolved.

However, the ACCC did say that the merger details would require more time to get the rubber stamp.

One of these hurdles could be overcome by Tabcorp selling its Queensland electronic gaming monitoring business, Odyssey Gaming.

As a defensive name, we have been buying Tabcorp for client accounts in the $4.20 to $4.50 range since early February.

Chart – TAH

US Payroll Preview

Posted on | by Todd | Leave a Comment on US Payroll Preview

The  US Non-Farm Payroll (NFP) report, scheduled for 12:30 am Sydney time tonight, could have a significant impact on global financial markets.

In a speech last Friday, FED Chief Janet Yellen was very clear that steady employment growth and rising inflation were the key indicators guiding US interest rate policy.

Tonight’s report will reflect both the number of new jobs created in the month of February and the pace of wages growth.

Wednesday’s release of the ADP private sector job’s report printed much higher at 298,000 on expectations of 184,000. And while the ADP data is far from a foolproof indicator of the NFP report, it would be a big surprise if the headline jobs number printed much below the 200,000 consensus forecast.

Against this backdrop of an imminent FED rate hike, US 10-yr bond yields have reached a three year high of 2.64%, Gold has dropped below $1200.00, Crude Oil has fallen more than 8.5% this week and Copper has lost more than 6% over the last 10 trading sessions.

It’s likely that a NFP print of  230,000, or more, will be bullish for the US Dollar and negative for Global equity markets.

Crude Dump Pushes Oil Search Lower

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The price of West Texas Crude Oil fell over 5% last night as the US Energy Information Administration (EIA) reported an 8.2 million barrel increase in domestic crude supplies. This lifted the total crude inventories to a new record of 528.4 million barrels in storage.

The front-month April contract broke the recent consolidation pattern to trade down to a 3-month low of $50.05, just above the important $50.00 support level.

A corrective bounce higher after such a large 1-day move is likely. However, with storage at all-time highs, more supply coming online and consumption numbers falling, a $48.00 price handle looks more probable than a $52.00 handle over the medium-term.

Shares of Oil Search have held above the recent low of $6.80, but look vulnerable to further downside.

The Investor Signals Algo Engine triggered a short signal at $7.72 on October 10th.

Technical studies suggest a break of the $6.75 level will see the stock revisit the November lows near $6.20.

Chart – OSH