Viewpoint: Bullish
Copper stood out on the downside overnight falling -2.8% as investors disembarked the recovery story, a drop MM is looking to fade ideally below the psychological $US400/lb area – at this stage our preferred vehicle to increase our exposure to this industrial metal is OZ Minerals (OZL) who report this morning to make things interesting!
The $US appears to be getting a safety bid this week as the coronavirus picture deteriorates with the largely regarded recovery proxy the “Aussie” falling to fresh lows for 2021. At MM we are looking for a time to fade this migration away from the recovery / reflation trade and a test of our targeted 70c area by the $A will certainly put us on notice that a turnaround in sentiment could be close at hand.
The ASX200 experienced it’s worst day in 2 months yesterday finally closing down 71-points as the banks and resources again fell as confidence continues to wane towards the global economy. The RBA echoed the markets concern that the Delta Variant might push Australia back into a recession as they considered further stimulus during their August board meeting…
1H21 result: The result was a strong one this morning at the profit line around ~14% ahead of expectations as a result of lower corporate overheads – always nice to see the fat cats giving up a few perks although the main focus is always on the operational aspects, at they came in line with expectations. The H1 dividend of US5.5c was a surprise given their…
A number of larger Australian miners are understandably looking to embrace the ESG theme with IGO one that’s caught my attention as its shifted from a primarily nickel / gold business to one with focus on energy storage. The shares have undoubtedly run hard but we like the risk / reward around $9 although this is likely to be a more active play into Christmas considering the optimism already built into the stock.
The aggressive advance by this WA based lithium business illustrates both how hot and volatile the sector has become in 2021. We like PLS but because of its huge appreciation so far this year we would currently only advocate accumulating in the $2.25-$2 region and considering the stock / sectors volatility this is not an unreasonable target area.
Apple Inc (AAPL US) similar to US indices continues to nudge new highs and we both own and like the stock but the risk reward short term around $US150 remains uncompelling which ties in with a potential pullback towards June lows, again one to buy in our opinion. i.e. a potential case of “Fade the rallies and BUY the dips” but I reiterate weren’t not sellers.
Yesterday afternoon we discussed the +12% rally in A2M courtesy of a story in the Australian Newspaper suggesting Swiss goliath Nestlé was interested in taking over the dairy and baby formula business. The NZ based stock has certainly seen better days having plunged 75% in just 14-months but the combination of a substantial short position, uncertainty around its…
The ASX200 struggled yesterday as the two most influential sectors fell in tandem, Bendigo Bank (BEN) -9.9% led the Banking Sector lower while OZ Minerals (OZL) -3.9% took line honours for the major miners. The index itself fell only -0.6% although the selling felt more aggressive with 11 companies falling by over 4% while only one rallied by the same degree.
