Viewpoint: Bullish
A tepid start to the trading week locally with a small 0.10% gain at the index level courtesy of strength amongst the financial stocks which have enjoyed the onset of higher interest rates, the hope that margin pressure will ease along with some large looming dividends is a hard 1-2 combo to pass up. All the talk this year has been about how hot the Energy & Materials stocks have been and rightly…
Over recent weeks, gold has been quietly gaining strength above US$1900/oz and a re-test of the recent early March high is our preferred scenario. Last week’s advance came despite the $US also rallying implying a greater level of underlying strength in the precious metal. If the $US takes a breather we would expect a pop higher in gold taking gold equities along for the ride.
After an initial bounce from the mid-March low, the Nasdaq ran into selling pressure last week as bond yields continued to march higher. We still believe this is the market that will provide the best shorter-term risk/reward opportunities for investors and while it feels uncomfortable, that is generally a sign that we’re near a point of inflection, a higher low above 14000 is the ideal scenario here.
One of the key global markets that supported our bullish calls over recent weeks has been the FTSE 100 in the UK given its high correlation to the ASX. Strength on Friday saw that market only a few ticks below its all-time high providing a solid road map for the ASX to follow. Their exposure to resources and energy stocks has been the major reason for strength, however, when we take a step back, the index looks…
Last week saw the ASX200 consolidate its recent rally just below all-time highs despite the growing chorus for the RBA to act sooner rather than later and commence the inevitable interest rate tightening cycle, joining the US & Canada who raised by 0.25% in March and New Zealand who have now pushed through three rate increases taking the official cash rate to 1%. When the RBA cut…
This week saw Warren Buffett’s Berkshire Hathaway reveal a $4.2bn investment in PC and printmaker HP making it the company’s 2nd largest tech holding after Apple Inc (AAPL US). The stocks certainly not trading at deep value as it made fresh highs following the news of the purchase but the company’s cycle now has it in a capital return phase with a low-single-digit growth profile i.e. far more up Buffett’s alley than…
US stocks recoverd some of the earlier weeks losses overnight with the S&P500 finally closing up +0.4%, nothing really new to report as it takes a breather following major volatility during Q1 of 2022. Overall we felt the performance from equities was solid considering the continued strength in bond yields and we believe fund managers having already ramped up their cash holdings to a 2-year high is going to be supportive…
The local market endured a bad day at the office yesterday falling -0.6% as we followed the US futures lower through both their day session and again during our day time / their overnight session. Over 70% of the mainboards stocks slid on Thursday but it was again the growth stocks that weighed the most on the ASX with all members closing lower leaving the overall sector down -3.5%, ultimately it was a fairly…
Elon Musk’s Tesla has experienced a volatile week after he announced taking a 9.2% stake in Twitter – the surprise investment has already gained him a seat on the board! The pullback after surging 50% from its March low is not major and understandable considering the combination of the Feds hawkish comments plus concerns as to where Musk’s energies will now be focused.
US stocks drifted overnight and like our own market they look to have gone into a holding pattern following a strong rally in the 2nd half of March – normal market price action and its easy to make an argument that stocks are performing very strongly in the face of a hawkish Fed.
