Viewpoint: Bullish
The ASX200 endured a tough start to this week finally closing down 62-points although it was a fair bit worse mid-morning with the index nudging the psychological negative 100-points level at its worst. Losses were relatively broad based with 76% of stocks closing in the red but it was still encouraging to see the market grind higher after its initial savage sell off.
WZR +1.89%: an impressive quarterly from the personal lending business Wisr. Their 4th quarter loan originations came in at $123m which is almost triple that of the 4th quarter FY20, and 27% more than the 3rd quarter this year.
ALU -3.78%: A volatile session for ALU today with the stock down as much as ~14% early due to a report in The Australian suggesting that AutoDesk had walked from their $38.50 takeover offer. The AFR followed that up with an article saying that AutoDesk had tested the waters at $40 a share and that too was rebuffed by ALU.
The US banking stocks has followed the same path as our own over recent weeks with the S&P500 Banking Index already having retraced 12% as bond yields drift lower. We see further downside as a buying opportunity in the sector with our ideal area the 350-360 area, or ~7% lower.
The US VIX Index, or “Fear Index” drifted higher last week even as stocks again registered fresh all-time highs, the combination of US reporting season and rising COVID numbers was probably the cause of the markets increased uncertainty.
No major change in the crypto currency, we’re bullish at current levels looking for at least another 15-20% upside i.e. buy dips towards $US30,000 but don’t be afraid to sell strong rallies.
No change, the $US appears to be consolidating before an assault on our targeted 93-94 area implying the last few months outperformance by the tech sector, especially in the US, has further to unfold over the coming months.
Longer dated US bond yields have also drifted lower although not to the same degree as our own over the last fortnight as they don’t face stifling new lockdowns, thousands of people in Sydney and Melbourne are waking up late this morning simply wondering when they can go back to work.
The PBOC surprised financial markets earlier this month by announcing further economic stimulus, they are effectively unleashing up to 1 trillion yuan (over $A200b) into their economy just as things were starting to slowdown.
This week we intend to focus on bond yields identifying the bottom of economic worries as opposed to discussing the nuances of the current outbreak across Australia and overseas. Three things are front and centre in mind at present:
