Investment Matters

What matters this week

It is getting quite ridiculous out there. The happy juice keeps pumping up the markets, especially in the US, with trickle through to Australia.

The Dow Jones (US large cap concentrated index) and the S&P500 (less concentrated US index) both closed at record highs on their Monday. Then again on Tuesday. An then again on Wednesday.

An enforced breather was taken on Thursday, as US markets were closed for Thanksgiving.

It certainly feels like a big fat reality check is coning in relation to a Trump governed US – but then again who knows. (Remember the apocalyptic pre-election predictions of what would happen to the markets if Trump were to win…)

More specifically this week:

Boral announced a transformative (aka huge, at ~AU$3.5bill) acquisition of the US-based company Headwaters. Boral’s US operations will more than double in size, increasing scale in both fly ash (an ingredient in concrete), and building products. A sizable capital raising was conducted to assist funding the acquisition. The price is on the high side, but with significant synergies by combining the operations, the effective price is more tolerable.

Woolworths held their AGM. Nice overtones were pronounced, but there was a lack of disclose regarding turnaround plans for Big W (following the hasty departure last week of division’s CEO, who only became CEO in January). Other matters such as the current ACCC case and the Lowes / Masters matters were nicely glossed over.

On the positive news side, Baby Bunting announced a positive trading update, with strong like-for-like sales growth. Babies are good for business.