Viewpoint: Bullish
Gold’s bounced almost 10% from its recent lows as the $US faltered, we can see it squeezing higher into Christmas pretty much in line with stocks and Copper.
The US tech stocks surged higher on Thursday and Friday, ultimately gaining ~9.4% in just 48 hours which would have worried the underweight/cashed-up fund managers – I’m sure some traders covered positions last week but major underweight portfolios take weeks to re-weight i.e. we can see plenty of buyers surfacing into any weakness over the coming weeks.
US stocks have lagged the ASX due to their lack of resources and heavy exposure to tech, the S&P500 remains well below its August high but if it follows the MM playbook the next 6-8% move should be on the upside.
The markets are in a fascinating position with most parts of our roadmap unfolding nicely plus tech now looking likely to become the last piece of the puzzle i.e. we are bullish and looking for growth stocks to start leading the market higher after enduring a very tough year. However, it’s one thing to pick the market and even sectors correctly but if companies fail to deliver on earnings it can still be a frustrating journey as we’ve experienced over the last few weeks e.g. Xero (XRO) and Megaport (MP1).
US stocks surged higher overnight led by tech which soared over 7%, as we’ve alluded to at length fund managers are underweight equities and especially tech, as we saw last night with the NASDAQ surging +7.5% if bond yields continue to slip lower these large positions are simply wrong and will need to buy, and fast!
The ASX200 slipped -0.5% on Thursday as a clear break of the 7000 level continued to be one step too far – until this morning! Selling was fairly broad-based yesterday with 65% of the index closing in the red although weakness was noticeable in the influential Resources, IT, and Banking Sectors. However, considering the US market had fallen over…
SSG +4.23%: the retailer hosted its AGM today, providing a positive trading update that took shares higher. Total sales growth to 6 November was up 13% on FY22, running around $8.5m ahead of last year. Sales growth was running at +19% in the first 7 weeks, with the drop coming as they start to cycle the end of COVID lockdowns last year. The company…
US stocks retreated overnight following inconclusive mid-term results and another savage set of declines across crypto land, the Dow closed down 646 points with weakness across all 11 sectors. The combination of the midterms, crypto weakness and a couple of disappointing earnings reports was enough to see risk sentiment take a back seat ahead of the next set of key inflation data but after 3 strong days, the decline wasn’t anything too scary.
The next logical step for BHP is to increase their offer for OZL towards $30 which is likely to give the big Australian access to the books to fully evaluate its future potential, in the direction of the RIO Tinto (RIO) and Turquoise Hill the numbers appear closer to $40! Obviously, as we’ve seen so often in 2022
RRL surged +12.7% as gold came back into vogue with a flurry although we shouldn’t forget how far it has fallen post-Covid as interest rates surged higher. However, we feel as the $US loses its mojo this under-owned and cheap pocket of the market is set to advance strongly and from a risk-reward perspective RRL, and the gold sector in general, looks great.
