Viewpoint: Bullish
PPS +15.32%: a strong rally for the investment platform today, bouncing back from recent weakness thanks to a decent funds under administration (FUA) update. The company noted total FUA fell in the 3 months to March to $47.7b, however softer international markets and currency moves weighed while net inflows topped $700m. We hosted CEO Anthony Wamsteker and new CFO David Coulter today. Here are some of the key takeaways:
HUB +2.04%: 3Q22 update out this morning with the investment platform recording net flows of $2.6bn which was up +36% YoY. This was a better outcome than Netwealth (NWL) reported last Thursday with FUA +16% YoY. There was a lot of uncertainty during the period – global conflicts, rising rates, central banks tightening policy etc so in that context we’ve got to applaud HUB for delivering in such a challenging…
US equities continued to underperform our own last week given technology accounts for ~28% of the S&P 500, however, given our wider views around relative performance if the appreciation in bond yields pause, we would expect some performance catch-up in the short term. i.e. US stocks to outperform Australian stocks for the remainder of Q2.
Firstly, I hope you all had a great Easter break, a beautiful 4 days in Sydney where the sun was certainly appreciated. The ASX 200 added +0.61% for the shortened week with Gold & Travel-related stocks populating the leader board. We’re now 19 days into the market’s 2nd strongest month of the year with a gain of just 0.32% to speak of. The ‘old world’ is smashing the new with Utilities up 5.44% while the Information Technology sector…
Overnight, US stocks shrugged off surging energy prices and applauded a reduction in bond yields, and rallied, led by the tech-heavy Nasdaq. In the short term, we remain bullish US stocks and technology in particular holding the view that a pause in bond yields will see money come back into higher valuation growth. We are not expecting new highs but a ~10% bounce feels like a strong possibility.
TWE has had its challenges over the past few years, largely a result of its reliance on the Chinese market that saw the company caught up in a diplomatic spat that quickly whipped ~60% off its share price. In February they reported improved trends, particularly in America while their high margin, premium brand business did particularly well. Since then, the market has lost some interest however…
After years of COVID-induced lockdowns and grounded fleets, Airlines are now dealing with surging Oil prices and a lack of trained labour to process passengers – certainly a tough business to run! However, results from American Airlines overnight showed improvement in terms of both demand and pricing. Sales over the quarter were ‘only’ 16% below levels seen pre-pandemic which was a touch better…
Since hitting a high of 7573 on the 5th of April, the ASX200 has drifted lower as it consolidates the gains achieved in the best March since 2009. The patience of the bulls is being tested however in MM’s view it remains just a matter of time before new highs are achieved for local stocks. Bond yields had a rest yesterday which relieved some pressure on sectors that cower at their ongoing advance while the resources & energy stocks continued to enjoy strength in their underlying commodity prices.
EML +10.53%: news reports started to come through overnight that a private equity outfit was looking at a takeover of EML. EML confirmed Bain Capital was eyeing a buyout of the prepaid cards business earlier in the year, to the point the company gave them an exclusive look at the books. That period wrapped up last month without a deal being struck and Bain has walked from the table at this point. It was seemingly…
