A few themes playing out in line with the MM script today:
1. After an aggressive early sell-off, we saw growth find a ‘washout’ style low and rally. As suggested in recent notes, we think this area of the market is set up for some reversion of recent trends i.e. growth is a short term buy including technology stocks like Afterpay (APT), Zip Co (Z1P) and Xero (XRO) along with CSL which hit a $242.00 low before rallying to close at $250.16, up 1.69%
2. APT had a low below $100 and rallied ~7% to close at $107.16 & Zip (Z1P) had a low of $8.26 and rallied 6% to close at $8.78
3. If this trend has legs in the short term, it implies that the ‘reflation trade’ will consolidate recent moves as money flows back into growth
4. However, importantly we think this will provide one last opportunity to take breath before the next set rolls in…..a good analogy used by a client today! i.e. this will be a short term move, not a sustainable one.
MM is bullish growth short term.
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