Viewpoint: Bullish
US stocks bounced strongly overnight as bond yields eased and oil plunged over 6% in a very one way session for commodities. The tech based NASDAQ has now corrected 22% from last Novembers high, we are looking for a strong corrective rally over the coming weeks with the overnight advance hopefully just the initial leg higher.
UK based JHG has followed a similar sector path over the last few months although it feels like its “looking for a low” around the $40 area. The stocks now trading on a P/E of 9x and estimated yield of 4.7% – the risk reward looks interesting into further weakness after the stocks shown how easily it can rally 15%.
PTM has lost over half of its value in less than 12-months as market confidence in active fund managers has drifted, the Ukraine invasion has just compounded a deteriorating picture, however we would argue that as the macro picture becomes more complex, the time is nigh for active managers, particularly those with a value bias such as Platinum.
US stocks struggled overnight as rising bond yields weighed on the broad market, our preferred scenario remains we see the S&P500 dip towards 4100 before recovering strongly i.e. so far so good.
As we touched on earlier MM likes the banks as a number of them trade into their dividends e.g. ANZ is forecast to pay a 75c fully franked dividend on the 10th of May which puts the stock on a projected 5.7% yield. We are looking for 12-15% upside in the stock over the coming weeks hence MM is considering allocating 5% of our Flagship Growth Portfolio into ANZ looking to fund the purchase with our…
The ASX200 rallied strongly yesterday to close +1.2% with exactly 80% of the market closing up on the day, the Financials were again the standout rallying +2.5% while the resources continued to look a touch tired although not down and out at this stage. Historically the banks simply love this time of year with 3 of the “Big Four” trading ex-dividend over the coming weeks however…
The war in Ukraine and especially the recent attacks near Poland are likely to rattle investors today but Russia’s lack of progress might also encourage some brave fund mangers
US stocks endured another tough Friday, & week, and the news that Russia is now bombing Ukraine military bases near the Polish border could rattle investors further this morning. Our preferred scenario is we see a dip below 4100 by the S&P500 early this week before some bargain hunters take stocks up 10-15% – we feel too many people are short / underweight hence in our opinion a short squeeze, unfolding sooner rather than later, is the path of most pain.
The ASX200 outperformed most global indices last week slipping less than 1% courtesy of a 2.2% rally by the Australian banks, conversely the Materials Index fell 3.4% i.e. an extremely different finish come Friday compared to Mondays opening. The SPI futures are pointing to a firm opening by the ASX today as they look poised to follow European indices higher, as opposed to the US which saw the S&P500 index slip another 1.3%.
While the awful humanitarian news continues to flow out of the Ukraine last week saw financial markets focus on the potential risks towards commodities markets and by definition global inflation if we see a prolonged conflict / economic stalemate. History tells us that higher inflation leads to rising interest rates which is a significant headwind for equities, and risk assets generally. Petrol prices have already gone crazy in..
