Viewpoint: Bullish
US stocks experienced another volatile session overnight as a rate hike by the ECB sent bond yields higher, the US 2 years closed back above 4.15% but ongoing rescue packages supported equities i.e. the “Fed Put” is getting busier by the day. The Dow rallied +370 points but the tech-heavy NASDAQ again led the market closing up +2.7% even as bets increased that the Fed would hike rates again next week.
In a similar fashion to REA Group, GMG is a growth company exposed to property, and although it’s not managed to advance over the last fortnight, unchanged is a great result considering the ASX200 has fallen over 300 points.
REA is arguably our favourite position in the MM Flagship Growth Portfolio at this moment in time, with the stock rallying +3.6% this week even as the broad market fell badly plus it paid a 75c fully franked dividend this time last week.
We are adding Mineral Resources (MIN) to the portfolio following its correction, in line with our bullish medium term view on value stocks.
S32 has been in our Hitlist through 2023 and its finally retreating down toward our optimum buy zone, a time to remain focused as opposed to being stuck in the headlights.
In US markets overnight we saw the Materials Sector fall -3.3% as economic growth forecasts were challenged by the current banking worries, a change to the recent fixation with interest rates, ironically the very cause of today’s banking woes.
This morning will demonstrate whether the internal strength of SFR is improving following the industrial metals drop to fresh 10-week lows overnight i.e. stocks usually bottom before the underlying commodity.
US stocks experienced another volatile session overnight as investors switched their focus to European banks as Credit Suisse plunged -24% although encouragingly the S&P500 remains above this week’s low, unlike the ASX which is suffering more due to its high composition of banking stocks. While the authorities continue to support financial institutions that are struggling following the rate hikes we believe calm will return over the following weeks and equities can return to trading around more traditional metrics of valuation.
Packaging business ORA delivered an stronger than expected earnings report last month after a huge shift by consumers to “slim and sleek” cans, much preferred by the millennials and Gen Z market who as we know like a canned drink! The company appears to be both delivering earnings while being ahead of the curve towards R&D, in our opinion an excellent defensive play through 2023/4.
NSR has shirked off a volatile week rallying over 8% from Monday’s low, we are targeting a 15-20% upside move over the next 12 months while the storage REIT is forecast to yield a handy 4.3% over the coming year.
