Viewpoint: Bullish
Westpac (WBC) +4.58%: A frustrating day for MM given we’ve talked about switching from CBA to WBC and that trade today put on 6.48% alone I.e. WBC up 4.58% & CBA down – 1.9%) back to the drawing board!
Corporate Travel (CTD) +4.94%: This is a stock we’re keen on as discussed in recent notes and today they delivered an okay update for the 1H21 given the challenging conditions, however there is a solid improvement in exit-run rate for the period and importantly, they’ve won a lot of new customers over the past 6 months, plus of course invested internationally at a low point.
No change, we remain basically fully invested in our MM Global Macro Portfolio with a cash position of just 4%, the portfolio remains heavily skewed towards “risk” which still feels on point for now, our core macro view of rising inflation hasn’t wavered.
Brunswick Corp (BC US) is a new company for the MM reports, this $US7bn Illinois based business manufacturers outdoor consumer products including marine engines e.g. the popular Mercury outboards.
After selling Visa (V US) we now hold 11% cash in our MM International Portfolio , while MM remains bullish we do feel the air is getting a little thin short-term but the chart below illustrates the acceleration to the upside could easily flow through into 2022, as we say almost at nauseam the surprises usually occur with the trend and there’s no doubt the direction of that is up!
US markets were mixed overnight with most major indices closing basically unchanged. The small cap Russell 2000 has been the clear outperformer but even this runaway train is starting to “feel” a little stretched and in need of a rest.
Overnight BHP surged 8% on the US ADR market to reach levels not enjoyed since 2012, its recent report and large dividend is clearly getting the thumbs up on closer inspection. We remain bullish and will regard any 10-15% pullback as a buying opportunity.
Another stock that reversed higher yesterday was NRW Holdings (NWH) which finally closed up +4.5%, we’ve discussed this engineering business a bit earlier after missing a healthy profit opportunity above $3 but after correcting almost 20% we are now comfortable with the risk / reward again at current levels.
MM has been flagging a potential foray into a2 Milk (A2M) if we saw a failed spike under $10 which is exactly what Tuesday gave with the stock reversing higher on good volume.
