Viewpoint: Bullish
Bond yields in the US continued to grind higher from their early August low even as the Delta Strain slowed the economic recovery, we believe it’s influence has been weighing on expectations for most of the year and looking into 2022 the picture is far more encouraging.
Last week saw the RBA reiterate their goal & belief that interest rates won’t need to be hiked until 2024, the shorter dated 3-years drifted slightly but the 10-years rallied illustrating the markets far from convinced the local central bank can achieve its objective.
Chinese equities have been on a roller-coaster ride in 2021 with aggressive regulatory moves out of Beijing smacking the likes of Alibaba (BABA US) and Tencent (700 HK), now investors’ attention has switched to the troubles surrounding property empire China Evergrande (3333 HK). Mr Xu has seen the shares in one of Chinas largest property group…
Similarly US stocks have drifted over 2.5% from their high earlier in the month, there have been no major standouts just some classic seasonal “wobbles” with the Delta Strain & Chinese Property bubble concerns cited by many as reasons to migrate away from risk assets, and towards the safety of cash. Considering the advance enjoyed by stocks over the last…
Equities have experienced some classic September weakness which has been amplified within the ASX due to the impact of iron ore as touched on earlier. This month is already the first since February that has traded under the low of the previous month, not a calamity but a clear indication that momentum has waned. We have been looking for some weakness…
While HUB has made a fresh all-time high in late August to us it has a very different look & feel to the previous examples with the potential exception to CTD. We saw in June the stock make a fresh all-time high, dip and then rally again, we see no reason to believe this path won’t be repeated.
NAB has outperformed in the Banking Sector over the last 3-months rallying 4.4% compared to say ANZ Bank (ANZ) which has fallen 4.6%. At MM we are hoping to increase our exposure to the sector via VUK at lower levels and while a pullback in NAB wouldn’t surprise after this month’s fresh multi-year high we have no interest in risking losing our position here, especially with a healthy dividend due in November.
IGO is successfully transforming itself to a business 100% focused on clean energy mining and battery storage putting it into the in vogue ESG category. Although IGO is clearly correlated to lithium names we own it making it particularly important to MM:
MM’s investing mantra through much of 2021 has been “Buy the dip and fade the pop” i.e. the emphasis being very much on the buy side of the ledger due to our bullish outlook for equities into 2022. The ASX200 has already advanced over 70% from its COVID low but MM sees no reason to fight this aggressive rally which we still see testing the psychological 8000 area into 2022.
US stocks had a relatively quiet / choppy session overnight but as we keep saying the uptrend remains intact, our stance has not changed for months – “buy the dips and fade the pops”. The “Big Tech” end of town has led the advance and while another 10-15% pullback wouldn’t surprise all of the surprises / risks remain on the upside with this impressive bull trend.
