NZ/Aus
The Australian market fell (ASX200 Index, -1.2%) as fears of further tightening weighed down on the market, with all sectors in the red.
BHP was a major contributor down 5.2% after trading ex-dividend coupled with weakness in the iron ore price, with futures in Singapore down more than 2 percent to $US113.70 a tonne amid weak demand for the steel-making ingredient at Chinese steel mills. Looks like good buying for Scales bang on $3.00 — pet food business is going well and the cyclone affected less orchards than thought — not a ‘fashionable’ stock but hard to argue the value here.
US and Intl’
Apple has now lost ~$300bn of market value over the last week — seems like a lot but when your company is worth ~$2.7tn, it ‘tis but a scratch — in our view a correction is due for tech — we see tech as broadly overvalued and are underweight, while we see consumer cyclicals and defensives as fair value, and we think entertainment looks “cheap” (WBD, DIS, PARA) if you are willing to wait it out for a couple of years. We also continue to prefer European exposure — CDI, BOL and EXO offer good value while Diageo (DGE) is obvious value in the UK.
Good piece in the FT on Li Liu – the investor who was seeded by Charlie Munger and who has had a remarkable life. Link. The Pinault family, which controls Gucci-owner Kering, has purchased a controlling interest in talent agency CAA via its holding company Artémis. The move puts luxury and talent very close and we’re interest what synergies, if any, the move will bring. Kering continues to sit in the uncomfortable spot of relying too much on revenues from Gucci — looks attractively priced at 16x earnings vs peers, but is it a value trap?
Losing leverage — credit card delinquencies tick up…
