Commonwealth Bank (CBA) is the largest company listed on the Australian stock market (ASX 200) with a market cap just over AUD $123 Billion.

Being the largest company on the ASX it is a widely held stock among investors directly as shareholders and indirectly via managed funds and super funds both domestically and internationally.

Similar to Woolworths that was recently reviewed on this blog see: Has woolworths wow turned a corner?
CBA had experienced strong and consistent share price gains over a number of decades and has been a very popular stock for that very reason.

Below you can see that CBA has joined a great run from the $5.80 a share range back in 1992 to the more recent highs achieved in March 2015 of just over $96 a share.

More recently CBA has been struggling to reach new highs in its share price. Since touching the $96 level last year the stock has been in a downtrend and bouncing off the $70 a share range to form a strong support level.

Below on the weekly chart you can see the level marked with a black line labelled - $70 strong support level, has so far not been breached, as CBA is currently trading just under the $72 a share level today.

If CBA was to break the $70 support level the next support area would be around the $64 a share range shown below with the black line labelled - $64 next level of support.

Zooming in on the stock you can clearly see since October last year that CBA has been bouncing off the $70 a share level a number of times and is close to approaching the $70 level for the 4th time in 12 months.

CBA just recently reported its earnings last month and based on the market's response sending the share price from around $78 a share when they announced their profit result to just under the $72 a share today the market believes the profit results were underwhelming for the largest bank and company in Australia.

Disclaimer: This post was for educational purposes only and all the information contained within this post is not to be considered as advice or a recommendation of any kind. If you require advice or assistance please seek a licensed professional who can provide those services.

Australian gold mining company Resolute Mining has come up with a novel approach to reward its shareholders and quite possibly a world's first.

After unveiling a bumper record profit of AUD $213 Million and re-introducing dividends to shareholders with a 1.7c a share dividend. The company has decided to offer gold bullion as an option instead of collecting cash for their recent dividend.

If shareholders elect to receive their dividends in Gold it will be stored at the Perth Mint on their behalf and can be converted to cash or physical gold bullion at the request of the shareholders .

Shareholders will be offered the option  to receive Gold Bullion in lieu of their dividends provided they own 5000 or more shares in the company.

For the full story see:

The Australian - Subscription required

International Business Times

The S&P 500 has been in a strong bullish uptrend for the last 7 years. Since hitting the multi year lows back in 2009 during the financial crisis where it reached a low of 666, the S&P 500 has climbed to an all time record high of 2193 on August 15th.

Over the last 15 months or so an interesting trend has been developing with corporate profits and the S&P 500. Corporate profits have fallen for a consecutive 5 quarters, which has not happened since the 2008 - 2009 financial crisis. Yet the S&P 500 has experienced two short and brief corrections over the same period on its way to making new all time highs.

Eventually this trend will correct itself similar to the period between 2006 - 2008. Either corporate profits will start growing again in the US and correlate with the S&P 500 trend, or the S&P 500 will correct and reconnect with the falling corporate profits trend.

Bonus Chart:

US 2016 GDP expectations have been slowly falling since the middle of last year recently making new lows around the same time as the S&P 500 reached a new record high.

The US effective federal funds rate has been sitting close to zero since late 2008, and rose ever so slightly at the end of last year when the FED surprised everyone and increased interest rates by 25 basis points (0.25%).

After raising them in December 2015 the FED told the market back then that they were going to raise rates another 4 times in 2016. In a few days time we are going to roll into September and we have still not had 1 of the 4 forecasted interest rate rises.

With the US recovery from the 2008 recession at the slowest GDP growth rate in US history, its no wonder confidence in the FED has been falling since Alan Greenspan was FED chairman.

As interest rates have not returned to 2007 highs above 5% in the US and sit below 0.35% what will the FED do the next time the US falls back into recession, which normally occurs every 5 - 7 years?

Australia has had an infatuation with real estate for a number of decades now, as many Australians have generated significant wealth through real estate as the local market has been rising steadily since the  early 1980's.

Among a number of industries that have done very well from the popularity and boom of real estate prices has been real estate agents who typically charge around 2% plus marketing costs to vendors wanting to sell their real estate. Based on the median price property in Australia of just over $600,000 nationally the typical cost charged by agents averages around $12,000 plus marketing cost which can range but usually are around $2,500 bringing the total to around $14,500.

This where a new entrant to the Australian market comes in, based in the UK and has just expanded to Australia, Purplebricks is launching and is bringing a new low cost fixed fee disrupting listing model to the Australian real estate market.

By tapping into the latest digital media technology Purplebricks can lower the cost to sell real estate and is offering their service for a fixed fee of $4,500 per property. This includes all marketing costs including advertising on popular local online real estate sites like realestate.com.au.

Having listed in the UK and with a decent starting marketing budget of $17.2 million Purplebricks are looking to make a big impact in Australia as they look take market share from the local competitor real estate agency's.

For further information visit:
 
http://www.news.com.au
http://www.afr.com - Subscription required

Since Oil fell from over US $100 a barrel back in June of 2014 to a low of below US $30 a barrel in February this year, many oil companies globally have cut back on capex oil exploration, reduced or eliminated dividends as they look to conserve cash and improve cash flows as oil companies revenues fell sharply over the last 2 years.

Companies in Australia like Woodside, Santos, Origin Energy have been slashing capex and dividends as they bunker down and conserve cash and attempt to ride out the oil slump that is effecting their business models and profits.

However over in the US, the big 4 major oil companies are taking a completely different path. The oil majors have continued to spend big on capex oil exploration, keep dividends at similar levels or even raising them whist their revenues are collapsing due to oil prices below US$ 50 a barrel level.

So how are these Big 4 US Oil companies funding all this spending as their cash flows are being squeezed? 

Simply by growing their debt levels to all time high of US $184 B.

Since the biggest US oil companies are continuing to spend large amount on looking for new oil reserves, and oil demand is falling domestically  oil inventory levels are also at the highest level in US history.

The first question I would want to know if I was shareholder of these oil companies is:

Q1 - Is the board of these oil companies paying attention to the above chart.

Followed up with:

Q2 - What happens to the future of these company if oil prices don't recover to 2014 levels of over US $ 100 a barrel.

For the full story :

www.zerohedge.com

Based on the chart the S&P 500 is running through a 6 month cycle

Woolworths has long been a favorite stock to own for investors who had enjoyed several years of rising profits and dividends growing consistently year after year for over a decade.  This consistent growth has assisted investors as they watched the share price climb from below $3.00 a share back in 1996 to just under $39.00 in 2014 delivering over 1300% return in share price gains.

Since 2014 it has been a difficult journey for Woolworths and its investors as the share price has fallen from as high as $38.92 to a low of $$20.30 in July of this year as intense price war competition from Aldi, Metcash and Coles took its toll on Woolworths, as well as the failed Hardware expansion with the introduction of Masters Chain costing investors and shareholders millions in losses.

Shareholders and investors of Woolworths are now hoping the two year downtrend has ended, and share price gains that occurred from 1996 to 2014 starts all over again.

Disclaimer: This post was for educational purposes only and all the information contained within this post is not to be considered as advice or a recommendation of any kind. If you require advice or assistance please seek a licensed professional who can provide those services.

US pension funds are looking for new ways to generate yield in a zero interest and negative interest rate world for their members / investors.

Similar to 2006 they have decided to  sell insurance on the US stock market in the form of put options on the US stock market to collect option premiums, when the market is at all time highs.

Selling put options is great to generate monthly premiums, however if there is a sudden sharp correction in the US stock market these pension funds are in for large losses.  

For the full story:

www.zerohedge.com

In this short video Satyajit Das, gives a frank and dim assessment on the future outlook of Australia and their prospects for jobs, income levels and life in retirement.