Viewpoint: Bullish
US stocks enjoyed another strong session overnight which has altered the short-term technical picture as both the NASDAQ and S&P500 posted fresh all-time highs.
The banks have taken the gloss off of the ASX in recent weeks as the yield curve contraction sparked by the Fed last week appears to have removed a major sector tailwind from the macro backdrop.
The ASX200 finished a choppy session slightly lower yesterday dragged into the red predominantly by some weakness in the banks and healthcare stocks but considering the escalating Sydney COVID outbreak it was a fairly lacklustre affair.
APT +6.18%: BNPL stocks generally rallied today, however Afterpay was the standout after announcing it would launch a virtual card to ‘select customers’ in the US.
MM has been looking to buy the Bank of Queensland (BOQ) into a pullback but if we see accelerated selling in UK facing VUK it may become a better alternative.
MQG is well and truly involved in the UK across a number of different areas. If MQG gets caught up in any bank and / or UK facing selling the risk / reward will start to look attractive under $140.
IRE has been in the news of late with huge volumes leading to anticipation of corporate activity and in today’s active M&A environment it feels like this might be another case of there’s no smoke without fire.
MM recently allocated 4% of our Flagship Growth Portfolio into this recovery business which has clearly endured a very tough few years.
The ASX is highly correlated to the UK FTSE and at this stage there appears nothing to worry about although we don’t see any reason to chase a market close to its 2021 highs and we feel is complacently assuming that the pandemic is under control – the logical technical target to again start buying this index is in the 6700 region, or 5% lower.
Again no change to US stocks which have basically gone nowhere on the index level for around 2-months, similar to the ASX sector rotation continues to dominate proceedings, the Dow Jones still remains within 3% of its all-time high as it bounces strongly from sharp weakness last week.
