Viewpoint: Bullish
LYC is a stock which many Australian speculators like to play but it has fallen -19% year-to-date although there have been some major swings in both directions through the year. A few months ago the company had some issues with the water supply for its Malaysian operations but these problems appear to be improving plus importantly the company…
The Australian Materials Sector includes a diverse group of companies from the major miners to gold stocks, building companies, lithium names plus a few others. Because of this diversity there tends to be a large cross section of stock performances within this broad basket, meaning more than most sectors looking too closely at the main index itself is not overly beneficial.
US stocks experienced an extremely volatile night following the Fed’s decision and hawkish comments, the 4000 area has acted like a magnet over the last few weeks and we’re still there after a deluge of news. At this stage, we are giving the bullish view the benefit of the doubt but it’s a fairly close call.
I have briefly mentioned WHC this morning as its volatility persists plus it’s a standout favourite for Saturday’s Q&A report – although we feel this coal producers’ rally since early 2021 is maturing our preference remains for fresh highs into/through Q1 of 2023.
MQG rallied +0.8% yesterday ignoring a relatively heavy session for the Banking Sector with only CBA from the “Big 4” managing to close in positive territory. With no dividend due until May the only reason to buy MQG short-term is for capital gain and the risk/reward looks good on this front over the coming weeks. We hold a large 7% exposure…
The ASX200 rallied strongly on Wednesday following the positive lead from the better-than-expected US CPI inflation print, we believe bond yields have peaked for now although the Fed have work to do even if the worst of US inflation may have passed. Stocks/sectors are taking some heart from recent Fed comments and Tuesday’s benign CPI…
We started to fade bond yields a touch too early across our portfolios but things have slowly started to move in our direction and last night’s market friendly US inflation print has reinforced our view that bonds go higher/yields lower into 2023 i.e. overnight US 2-year yields fell 0.15% to close at 4.22%. While the Feds still lurking in the wings this week we believe it’s time to squeeze the crowded short bond trade.
This week a new Gold company was announced (pending shareholder approval) called Hoover House (HHL) formed via a merger between St Barbara (SBM) which we own in the Emerging Companies Portfolio and Genesis (GMD) to consolidate their assets in the Leonora region of WA. Key points as follows:
US indices experienced a very volatile session overnight, opening with a bang on the upside only to taper off as the session wore on, eventually closing less than 1% higher. The reaction in bonds prompted aggressive early buying in equities on the expectation that the US Federal Reserve is close to being done on rates, although the momentum of that view lost some steam as the day progressed.
US stocks enjoyed a better session overnight with the broad-based S&P500 finally closing up +1.4% supported by a strong Energy and Tech Sector as traders squared their books off ahead of the US CPI and Fed decision over the coming days i.e. they feel too bearish!
