Sectors: Technology
On-line artist portal RBL has really only fallen in-line with the tech sector as a whole. The company is growing revenue fast, in Q1 of the current financial year growth was close to +120% while margins also rose, a nice combination.
As bond yields awaken from their slumber we believe the tech space definitely needs to reconsidered very carefully as volatility continues to rise.
We’ve touched on APT a few times in recent reports and yesterday it bounced over 7% from its intra-day low, my “Gut Feel” is we’ve now seen a decent swing low and the next 20% for this volatile BNPL stock is up.
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%
NEXTDC (NXT) develops data centers. The Company develops and operates carrier and systems integrator neutral data centers in Australia. NEXTDC’s customers will also be able to use the data centers as connectivity and content hubs.
Cashrewards (CRW) is an Australian cashback reward program. The Company offers program which enables users to get a portion of their cash back when making a purchase online and in retail stores.
Afterpay continues to dominate the market news as the volatility in the BNPL space magnifies even the most dramatic sector moves. Over the last 4-weeks APT has corrected 26% into our identified major technical support area
If we are correct and bond yields are due for a decent pullback and US tech’s “looking for a short-term low” this by definition impacts a few positions in our MM Growth Portfolio with 2 at the centre of my thoughts at this point in time:
One stock feeling the full brunt of selling overnight was The Trade Desk (TTD US) which has been the leading stock in our international equities portfolio up multiples of our entry price, the ~12% decline overnight highlighting how influential yields are on previously hot momentum type stocks.
Apple’s been underperforming in recent weeks and although we still expect fresh all-time highs from the S&P500 in the relative short-term AAPL might have already done its dash.
