Australian Investment Blog

With two young kids this coming Sunday is not surprisingly the topic de jour in my house but we should not forget that stock markets are in their seasonally strongest fortnight and we anticipate some activity shortly. US stocks are continuing to digest the Fed's forecast of 3 not 2 interest rate hikes in 2017 in a bullish manor. The S&P500 remains only 0.7% below its all-time high and we are still expecting a 2-3% rally before we all start singing "Auld Lang Syne" in twelve days time.

US S&P500 Daily Chart

Yesterday the local market surprised many by rallying strongly, after opening in the red, to be up over 40-points for most of the day prior to closing up 29-points (0.53%). This was a classic "Santa rally" day with an absence of selling allowing the market to advance strongly.We continue to target a break of the 5611 high for 2016 over next fortnight.

ASX200 Daily Chart

Importantly now moving onto the specific stocks within our MM portfolio to ensure subscribers have their fingers clearly on the pulse of our thoughts over the coming trading days.

Banks

CBA - likely to maintain / reduce this position with the next dividend looming in February.

MQG - Looking to take profit ~$90 region.

WBC - Looking to take profit ~$33.

Yield Play

TCL - Looking to take profit ~$10.80.

WFD - Looking to take profit over $9.50.

Insurance

QBE - Likely to hold QBE with a medium term target ~$15.

SUN - Likely to hold QBE with a medium term target over $15.50

Healthcare

HSO - We are likely to hold this position and add closer to $2.

CSL - We like CSL but not our entry level, we are buyers under $90 but will reduce ~$105.

Tourism

MTR - We like tourism over the medium term but given our more cautious stance will consider selling MTR closer to $3.50.

Telco

VOC - Our disaster for 2016, fortunately unlike many we only experienced the one. We are looking for an opportunity to exit

Energy

ORG - We are looking to take profit ~$7.

Short-term

VTG - We are looking to take profit ~$3.40.

Summary

We remain short-term bullish stocks but are still planning to reduce exposure over the next fortnight.

** Please watch for alerts**

Overnight Market Matters Wrap

• A consolidation continues across Europe and the US as investors wind down ahead of Christmas and New Years’ break.
• Both the Dow and S&P 500 closed marginally higher, up 0.2% at 19,883 and 2,263 respectively.
• The major miners are expected to underperform the broader market, with BHP ending its US session down to an equivalent of $24.77 (-1.3%) from Australia’s previous close.
• The December SPI Futures is indicating the ASX 200 to open marginally higher, testing the 5,570 level.

Disclosure

Market Matters may hold stocks mentioned in this report. Subscribers can view a full list of holdings on the website by clicking here. Positions are updated each Friday.

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