Clearly, this share market is having difficulties coming to grips with total non-performance for substantial sections of the ASX, including energy and mining stocks and their contractors, while financials, yield stocks and structural growth stocks seem limited by valuation concerns. Maybe the unexpected rate cut by the People's Bank of China can put some oomph in the non-performing parts of this market that might last longer than a day or two?
No surprise, the lion share of recommendation downgrades involves industrial companies, particularly those involved in servicing the mining industry, as the likes of Programmed Maintenance and Seven Group continue to indicate this downturn hasn't ended just yet.
In the good books
BlueScope Steel (BSL) was upgraded to Neutral from Underperform by Macquarie. It's probably time the BHP spin-off twins, flat steel Bluescope and long steel Arrium (ARI), got together to talk about how they might restructure the domestic steel market. There are many options the two could explore to the benefit of shareholders. Meanwhile, the broker has marked commodity prices and the Aussie dollar to new forecasts, which leads to a drop in its BSL target to $5.39 from $5.52. But given BSL's underperformance since its FY14 result, the broker upgrades to Neutral.