Viewpoint: Bullish
The ASX200 pushed up to test its June highs this morning, an impressive +13% rise from October’s panic low, it’s now surprisingly only 5.3% below its all-time peak – it certainly doesn’t feel like it in some pockets of the market. Heavyweights such as Commonwealth Bank (CBA) and BHP Group (BHP) have rallied strongly over recent weeks but numerous stocks remain in the “naughty corner” so far this quarter, and in 2022:
The COPX ETF not surprisingly is mirroring the underlying copper price although at the moment it’s outperforming the industrial metal i.e. stocks are in a relatively bullish phase. Clearly, the macro backdrop of China fixating on its Covid-zero policy and the Fed tightening the screws on the global economy is a headwind for copper but we can see surprises more likely on the upside from both of these areas which could see the industrial metal appreciate sharply.
We recently added Walt Disney (DIS US) to the International Equities Portfolio around current levels backing a turnaround in fortunes following a slide of ~37% this year alone. While we think there are numerous ways to unlock value in this owner of iconic media assets, they need the right captain at the helm. Disney famously rejected the now iconic…
One we own in both the Flagship Growth and Emerging Companies Portfolios, the copper company came out with a surprise $200m capital raise last week, with shareholders able to participate in the non-renounceable entitlement offer at $4.30/sh on a 1-for-8.8 share basis. Shares have held up well since the announcement, currently…
They say never buy a resource stock for yield however yesterday we did, adding a 3% position in NHC to the Income Portfolio. Coal & Coal stocks have surprised many on the upside, including MM, and while we positioned early for the theme in our Growth Portfolio, we got off the train too early. However, NHC is now a compelling income opportunity, albeit with…
US indices rallied overnight led by “Big Tech” as the market appears to get used to hawkish noises from Fed members, sentiment was also helped overnight by some upbeat company earnings. Bond yields drifted lower taking the $US along for the ride and the S&P500 finally closed up +1.4%, we feel a break of this month’s high is almost inevitable over the coming week (s).
The ASX200 rallied +0.6% yesterday taking it within a few points of the psychological 7200 area, over 60% of the main board advanced, and when that’s combined with CBA, BHP, and CSL rallying it’s always likely to be a positive day for the local index. An indication of how open-minded we all must be towards today’s market was provided by the…
BAP -0.58%: the aftermarket auto parts business hosted an investor day today, with shares falling on weaker commentary. While they have seen strong revenue growth so far this year, margins have been squeezed by higher costs from labour, supply chain and general inflation. They do expect to pass these costs on to customers and margins will revert, however, there…
US stocks withstood ongoing hawkish comments from the Fed with the Dow only slipping -0.1% and it almost managed to close positive. Similar to our own index there are buyers of dips but not of strength.
SFR rallied +1.48% yesterday to close at $4.81, well above last week’s $200mn capital raise at $4.30, a bargain for shareholders at this point who will have the opportunity to buy 1 new share for every 8.8 shares held at the discounted price. Clearly, an excellent read-through for SFR over the coming weeks/months if it can rally after a discounted capital raise.
