Viewpoint: Bullish
Today I have relegated bond yields within the report but we still cannot ignore them at the moment:
The ASX200 surrendered early gains on Tuesday to end the day marginally lower as some of the large miners weighed on the index e.g. BHP Group (BHP) -2% and RIO Tinto (RIO) -3.25%. The RBA released its “minutes” at 11.30am on Tuesday, the unveiling of Philip Lowe & Co’s thoughts at their most recent policy meeting 2-weeks ago took some of the puff out of the hawks…
NST -0.11%: it’s been a busy few months for gold miner Northern Star and it looks to have taken some focus off their production to kick off FY22. With a new CEO in place & a big dream of 2moz/yr in his 5 year plan, plenty of little deals have been taking place but gold production fell in the first quarter. A total of 386koz of gold was sold at an average…
BHP -2.04%: a maintenance heavy first quarter weighed on the headline numbers today, however the stock held up well, falling in line with iron ore peers. BHP saw Copper production fall 9% YoY to 377kt, iron ore down marginally to 63mt and coal production, both met & energy, fall around 10% in the September quarter. Petroleum was the only area…
Earlier we looked at how MM expects the NASDAQ to make fresh highs into Christmas and similarly we like the local sector over the coming months. This has been an explosive trend since early 2020 and moves such as these often take time to roil over and at the moment most major names are largely ignoring the moves in bond markets. MM…
Any doubters of the ongoing appetite for “risk assets” only have to cast their eyes to the volatile crypto space as Bitcoin re-test its all-time high, after more than doubling from its June low. If investors / punters still have the confidence to drive the price of Bitcoin higher the read through for boring old equities is positive i.e. crypto currencies have been…
Overnight US stocks saw a recovery in the tech space which flags some reversion to yesterday’s fairly aggressive sector rotation. We still see the US tech space testing fresh highs i.e. rallying at least 5% into Christmas – some alarm bells might be ringing for nervous investors but MM remains happy to stay aboard the risk train into 2022.
I was a touch disappointed by AWC’s performance yesterday, the 1.3% advance was significantly less than I anticipated after the strong report and rally by Alcoa (AA US) on Friday night, I thought $2.50 was a strong possibility. However we remain bullish for a couple of reasons:
Building products business CSR has been struggling over the last month but it really enjoyed a bid-tone yesterday rallying over 3%, testing its 3-week high in the process. We still like the sector which is holding up well under the weight of the China Evergrande collapse and spiraling bond yields.
Both IGO & OZL rallied well over 4% on Monday entrenching themselves in the indexes top 5 performers, at this rate we will be making plans to cut / reduce our positions into fresh 2021 highs – or a “pop” as I’ve been describing it over recent months. Both stocks are now within 7-9% of our respective target areas. This morning might see a slight pullback by resources early on but we believe the dials turned.
