Viewpoint: Bullish
AGL +10.61% Rallied strongly today following a takeover tilt from a Brookfield / Mike Cannon-Brookes consortium that proposed buying AGL for $7.50, a miniscule ~5% premium to the last close and completely unrealistic for a change of control transaction, however we do support their rationale for winding up coal powered generation and using AGL’s footprint to expediate the transition to renewables. We think they’ll be more to play out with this.
ALU -5.92%: A weak session today for Altium despite upgrading their revenue guidance for FY22 with the stock down ~10% at the worst before recovering to close down a more modest 6%. The issue came around margins which has been a common theme for tech stocks this reporting period. 1H22 revenue came in at $102.2m inline with expectations while FY22…
Precious metals have enjoyed a resurgence over recent weeks helped by the trifecta of rising geopolitical tensions in the Ukraine, a weakish $US and investors being underweight the sector. At this stage we see no reason not to believe gold will be trading above $US2,000 at some stage in 2022 – lets hope the gold stocks can follow suit!
Crude oil has been following the MM roadmap perfectly through 2021 and into 2022, the easy money appears behind us but the trends up and another 5-8% upside feels very possible. Brent Crude hasn’t traded above $US90/barrel since 2014 but with supply / demand pushing prices higher plus escalating worries around the Ukraine it still feels likely that dips will be bought – we still believe the stars are aligning for a spike high above $US100/barrel in the coming weeks / months.
The Canadian Dollar (or Loonie as its referred to in FX land) has remained firm over the last 3 quarters which is an encouraging read through for the Resources Sector due to the CAD’s dependency on raw materials, just like Australia.
The ASX200 looks set to open back under 7200 this morning following a poor Friday night close on Wall Street, considering the ongoing geopolitical escalation between Russia and the rest of the world it’s hard to imagine any meaningful buying emerging before tonight’s holiday in the US for Washingtons Birthday i.e. valuations aren’t compelling enough to for people to risk being long through an invasion.
MM is a firm believer that electric vehicles and battery storage more generally is the future, Origin Energy’s announcement yesterday to wind up the country’s biggest coal fired power station early and replace it with a huge battery is testament to that, but we only have to look at Elon Musk’s Tesla Inc (TSLA US) to realise that with new technology comes significant volatility on the…
Safe havens are one pocket of the market which have benefitted from the current geopolitical uncertainties, gold has broken back above $US1900/oz and remains on track to start testing its 2021 highs – lets hope that the local Gold Sector can finally regain its “mojo”, last time precious metals were trading at current levels Newcrest Mining (NCM) like most of the sector was trading over 20% higher.
