Viewpoint: Bullish
A number of questions in the past week directed towards the ANZPI, which is the new hybrid security issued by ANZ.
Australian stocks have enjoyed some noticeable outperformance over their US peers in the last 3-months and although the “easy money” from a correlation perspective is behind us MM believes this fairly new trend has further to unfold.
The ASX200 IT Sector has led 3-year bonds in 2021, slipping lower in a rising market before bond yields started rising and then recovering before the same yields started giving up some of their gains for 2021.
MM has called CBA over $100 since I can remember but the picture is getting more bullish both technically and fundamentally almost by the day.
CSL has already recovered ~25% from its March low but we remain bullish and long in our Flagship Growth Portfolio targeting a break to fresh all-time highs, a “call” which has a couple of major implications in our opinion
The ASX200 continues to rally steadily with the index challenging the psychological 7400 area in the early afternoon as the +0.9% gain took Junes advance to +218-points / 3%, and we’re still only half way through the month, although I would caution the bulls that we’ve reached MM’s target for June assuming the markets going to maintain the same momentum of the last 4-months.
ASB -9.01%: The shipbuilder that we recently added to in our Emerging Companies portfolio downgraded today by ~8% and the stock fell a similar amount.
Equity markets remain very comfortable which makes sense as they maintain their advance to fresh all-time highs but since the outbreak of COVID back in 2020 we’ve witnessed a “pop” in volatility on average every 3-months hence we’re bullish into the current complacency / weakness, especially from a risk / reward perspective.
When we dive a little deeper into FX land the dominant Euro still looks very capable of breaking to fresh 3-year highs suggesting there’s no hurry cutting our long $A position which ties in with one more assault on the upside by the Baltic Dry Index, and downside by the $US – remember financial markets are like one large interlocking jigsaw puzzle.
Precious metals have rallied steadily from their early April bottom but as the $US oscillates around its multi-year low volatility is slowly rising.
