Viewpoint: Bullish
Heavyweight CBA has led from the front post COVID and while we feel it might be a tough ask to continue bearing the load another test of $110 feels a strong possibility – the stocks forecast to pay a $2 fully franked dividend in mid-February which may see some yield hungry investors start emerge as buyers in the coming weeks.
US banks have also been strong over the last 2-months although they are posting fresh all-time highs along their way. Statistically selling all-time highs is fraught with danger but we are reviewing / monitoring our exposure through Wells Fargo (WFC US) after it’s more than doubled since late 2020.
The Australian banks make up around a quarter of the ASX200 making it an extremely influential sector, a bit akin to the influence of tech stocks in the US. In recent months the local index has rallied nicely after surrendering some of its post COVID gains late in 2021. At this stage we still see another 6-8% upside for the sector but its 2015 all-time…
Overnight we saw US stocks experience a volatile session with early aggressive selling across the board on continued concerns around interest rates although it was encouraging to see some strong buying enter the market after the 5-day sell-off. Investors clearly feel uncomfortable as they digest 4 rate hikes in 2022 and the risks to economic…
Serial underperforming insurance company QBE is one of the businesses that benefits from increasing short term interest rates simply because it holds received premiums on deposit in anticipation of future claims hence higher yields delivers higher revenue. We remain bullish QBE targeting a test of $13 which implies the value section of the market…
The ASX200 drifted marginally lower yesterday with the value names continuing to support the index while the broader index drifted lower under the weight of increasing concerns around rising bond yields and inflation. While the banks were firm the Resources Sector was the standout for MM with influential stocks like BHP Group…
Copper continues to tread water but we find its resilience in the face of the Omicron strain and a strong $US very encouraging. MM remains bullish the industrial metal looking for around 15% upside which again suggests the Resources Sector should enjoy the start of 2022.
Crude oil has been following the MM roadmap perfectly through 2021 and into 2022 although stocks in the Energy Sector have been very disappointing as fossil fuels become persona non grata in many a portfolio as we all become increasingly environmentally conscious. MM is bullish commodities with crude oil leading from the front, another…
The Australian Dollar ($A) has managed to bounce from its early December low although its struggled to gain significant traction as the Omicron variant has understandably questioned investors outlook towards economic expansion. Our preferred scenario is we see the current Omicron numbers follow the South African path which…
The picture in Europe hasn’t changed for a few weeks with its resemblance to the Australian ASX almost mirror like, we remain bullish both looking for around 5% upside which implies US tech should hold together at least short-term, although we anticipate the strength will come from the resources and to a lesser extent the banks.
