Viewpoint: Bullish
LYC +10.58%: the standout in the top 200 was Lynas which crashed through all-time highs following a strong quarterly update. The company saw total sales climb to $US137m for the 3 months, up around 20% from the first quarter.
Australia’s largest bank has enjoyed a strong recovery from the markets panic sell-off in early 2020. Although the move is fairly mature we believe the next 10% is up which strongly implies both the value stocks and ASX are well positioned into Christmas.
The US VIX Index, or “Fear Index” spiked higher last week only to again fail in the mid-20 region as stocks recovered. The pattern remains the same with 7 sharp rallies over the last 12-months failing as investors buy the dip in stocks, the odds are steadily increasing that we will see a spike…
The crypto currency recovered strongly after dipping under $US30,000 last week, we believe a +20% rally is now imminent with good risk / reward on offer in this volatile beast.
The $US is slowly grinding towards our targeted 93-94 area implying the last few months outperformance by the tech sector, especially in the US, has a little further to unfold although bond yields appear to have again taken over as the main driver of equities – their rightful position!
Backwardation is the term used to describe a commodity whose future price is lower than todays while Contango is the term used to describe the inverse condition. Obviously there are a number of moving parts which determine how markets are trading months and years ahead but supply & demand are front and centre in the equation with the latter being largely driven by future economic forecasts.
A volatile week which ultimately delivered no real change with many US indices posting fresh all-time highs on Friday, totally reversing a fairly savage sell off on Monday – “buy the dips” reigns supreme helped by 87% of S&P500 companies that have reported so far this season exceeding analysts’ expectations.
Australian short and longer dated bond yields continued to slide lower last week as the Delta strain dampened economic optimism with many small businesses doing it really tough as the Sydney lockdown is being touted to last into September.
The ASX200 is poised to make fresh all-time highs this morning with good old fashioned corporate performance dictating the markets trend as opposed to short-term panic around COVID-19 and the subsequent deteriorating sentiment towards the global economic recovery. When we stand back and look at the local market since this impressive post GFC bull market started way back in March 2009 the rally by equities has been steady with a few interesting characteristics catching our eye:
New Hope Corporation Limited is an Australia-based diversified energy company. The Company’s principal activities include development and operation of coal mines, port handling and logistics, agriculture and oil and gas development and production. The Company operates through three segments: Coal Mining in Queensland, Coal Mining in New South Wales, and Other. The Coal Mining in Queensland segment, including mining related production, processing, transportation, port operations, coal exploration and marketing. The Coal Mining in New South Wales segment, including mining-related production, processing, transportation, and marketing. The Other segment, including coal exploration, oil and gas-related exploration, development, production and processing, pastoral operations, and administration. The Company has two open cut coal mines, one in the Darling Downs and one in the Hunter Valley: New Acland, north of Oakey in Queensland, and Bengalla, west of Newcastle in New South Wales.
