We’ve had similar questions over the last few weeks and our view has remained unwavering i.e. we are bullish towards the Resources sector over the next 6-months. This weeks US CPI has moved the markets anticipated path for both inflation and FED rate hikes which has seen the $US make fresh multi-month lows – a bullish read through for commodities and the Resources Sector.
However, if we get the much anticipated stimulus out of Beijing it could really set the miners alight but similarly if it’s less than expected they’re likely to struggle – we’ve said a few times in July that MM believes China will pull the stimulus levers when its good and ready, as opposed to when global markets hope – in other words be patient, we believe it will come.
MM is long and bullish BHP in our Active Income and Flagship Growth Portfolios with no plans to take profit in either. We like BHP more than FMG & RIO, and would therefore be more inclined to sell FMG & RIO into further strength, while keeping a position in BHP. We think Copper has a better outlook than Iron Ore.