Viewpoint: Bullish
Equity markets remain very comfortable as they maintain their advance to fresh all-time highs however we still believe the risk / reward for volatility remains on the upside
I could have easily looked at Afterpay (APT) this morning but MM already holds a small position in Z1P hence it got the nod.
BSL is excellently positioned for the ongoing global economic expansion and technically it looks excellent for a pop towards $25.
We touched on the breakout by IOOF Holdings (IFL) yesterday, similarly PPT looks good targeting the $45 area as assets / stocks continue to rally – as a sector they’ve been non-believers.
MND is a very similar story to NRW Holdings which is no surprise considering their respective businesses, in true form to many underperformers we feel MND is looking for / found a low and at least the next 20% is up.
In hindsight MM has been too faithful towards mining & construction services business NWH but now it’s halved we believe its displaying some deep value and we are considering an aggressive average of our position.
Last night saw the $US pop +0.6% leading to a sharp sell-off in some commodities.
US and European stocks slipped lower overnight with the tech space the main mover falling over -1%, a decline which was overshadowed by Tesla (TSLA US) which tumbled more than 5%.
Post the GFC US longer dated 30-year bonds were still nudging 5% hence the fact that they are trading sub 2.5% today, as most commodity prices surge to multi-year highs, is a major warning signal to MM that investors aren’t pricing in enough risk of rising interest rates / bond yields in the bigger picture but we feel that’s something to worry about after Christmas, and beyond.
We touched on inflation in yesterdays Afternoon Report and I thought this morning would be an opportune time to add a few points to this critical topic
