Viewpoint: Bullish
Our view towards US and global bond yields hasn’t changed short-term i.e. the markets got itself very long and a short-term washout to the downside feels a strong possibility, one we remain keen to buy for all the fundamental reasons mentioned above.
The post COVID picture for interest rates is very clear, it’s a case of when not if they are going to start rising.
We only have to cast our eyes to the sub-continent to see how equities / risk assets are looking at macro events through rose coloured glasses i.e. when COVID erupted in India stocks simply consolidated their post March 2020 gains but when glimmers of improvement emerge the bull market has kicked back into gear with fresh all-time highs feeling only days away.
US stocks remained firm overnight with the small caps Russell 2000 index running fairly hot putting on +2% compared to the Dow which closed up less than +0.1%.
Yesterday saw data centres services company NXT rally over +5% as it embraced the increasing momentum of the IT recovery theme.
RHC has forged ahead with its plan to buy UK Spire Healthcare Group for $3.7bn upscaling the Australian business to a major player in the UK & Europe.
IGL +10.89%: The integrated marketing business, which we own in the Income and Emerging Companies portfolios, Ive Group popped to a two-week high today.
MM has avoided oil specific stocks since we sold out of Beach Petroleum (BPT), we are in no hurry yet to jump back in but STO is slowly becoming interesting as its slips below $7.
The ASX is highly correlated to the US small cap Russell 2000 index which has given us zero leads since February as its consolidated the strong post COVID gains
