Viewpoint: Bullish
After mentioning ANZ and NAB yesterday it made sense today to look at MM’s other banking exposure in our Flagship Growth Portfolio i.e. MQG. A month ago we trimmed our MQG position from 7% to 5% in the $191 region, we are considering tweaking the exposure back up into further weakness but we are in no hurry.
“The “Big Australian” rallied the most in 15 weeks yesterday as the market appeared to say enough is enough i.e. the stock had fallen over 11% following last month’s result which we thought was solid – had it been sold off further towards $40 the plan was to increase our exposure across portfolio (s). Subscribers should remember we are medium to long-term bullish towards the resources hence we are reticent to reduce our exposure too far while importantly being buyers into weakness.
US stocks drifted lower overnight following strength in bond yields i.e. the same playbook as the last 12 months. The catalyst last night was a gauge for manufacturing improving for the 1st time in 6-months plus we saw measurements of prices paid also rising i.e. not indicators the Fed are hoping for.
A different reporting cycle, however, as a refresh, we own Metcash due to 1. Relative valuation trading on 13x forward while yielding 6.14% FF
As touched on earlier ALU result was a slight miss but nothing dramatic, especially in the volatile tech space. This is a profitable Australian tech stock that pays a dividend which is one of the reasons it should only be sold into strength in our opinion
US stocks experienced another choppy session overnight recovering from their session lows as investors appeared to accept rates would be higher for longer i.e. nothing new at this stage although gains were dented by one Fed governor reiterating the central bank’s 2% inflation goal. US 2-year yield slipped back under 4.8% which saw the $US trade back below 105.
S32 outperformed most of its peers yesterday only slipping -2.7%, the metals/bulks miner has already transitioned to a 75:25 ratio today as it migrates towards its 85:15 goal (of metals to bulks) making a more attractive ESG play than many of its peers.
PPS +7.53%: a strong move higher against a weak session for the market, the investment platform impressed at their HY results. Revenue margins increased 9bps.
ABB -1.02%: 1H results for the telco today were mixed, however, the beats largely outweighed the misses. Revenue fell short of expectations, and FY guidance was cut there to $780-800m, down ~4%.
RPL -1.26%: full-year results for the fund manager today, shares closed slightly lower on a volatile session. The numbers were solid, if not a little messy given the acquisition of VGI Partners in the middle of the year. FUM ticked higher, seeing $0.7b of net inflows, partly offset by $0.2b of negative performance in the second half.
