Viewpoint: Bullish
Gold feels similar to US stocks, it keeps promising for 24-48 hours but fails to deliver over any longer timeframe as rising bond yields and an extremely strong $US pressure the out of favour precious metal.
The tech based NASDAQ remains similar to the more broad-based S&P500 although its bond yield-inspired swings have been slightly amplified as growth stocks feel the brunt of rising yields i.e. the high Beta interest rate sensitive NASDAQ has corrected -38% whereas the S&P500 has fallen -28%. The index ended last week down another -1.5% and while there…
US stocks now look very capable of making another fresh 2022 low in the coming week (s) but we still believe the market is “looking for a low” and brave buyers will be rewarded through Q4 – we wrote a few times this month that the S&P500 was dragging the chain on the recovery front, and new lows shouldn’t be dismissed, and alas the observation has been on point:
The ASX200 is set to open down around 1.5% this morning following another Friday tumble on Wall Street but unlike its US peers the local index is trading 5.4% above its 2022 low following the RBA’s well-received surprise 0.25% rate hike earlier in the month – MM still believes the local market has found a low and we will be trading comfortably higher around Christmas.
Lastly IGO which we hold in our Flagship Growth Portfolio, the stocks basically reached our $16 target area leaving us contemplating what next comes next i.e. is this going to be yet another “failed pop” as we’ve labelled moves by the likes of NIB Holdings (NHF). We are fans of the companies evolution over the last few years which is enabling the business…
Overnight we saw US stocks stage a dramatic recovery after a stronger than expected US inflation print, not something most people would have expected. Core US inflation rose to a 40-year high almost guaranteeing the Fed will deliver another large rate hike in November but the market like ourselves seemed to shrug its shoulder and say “tell us something we don’t know!” – the markets now looking for two further 0.75% rate hikes by the Fed taking them within a striking distance of 5%.
NAB rallied another +2.4% yesterday extending its 2-week bounce from October lows to an impressive +9.7%, the “Big 4” again stormed higher with an average gain of +2.3% on a day when the market closed slightly in the red. The sector enjoyed a few almost inevitable upgrades after this weeks Bank of Queensland (BOQ) result including NAB being raised to an accumulate by CLSA with a $31.30 price target, we believe they are being too conservative!
The ASX200 tried to rally yesterday but nerves ahead of the pending US CPI crept in after midday and the market surrendered its earlier 40-point advance. There were a couple of fascinating moves within the Resources Sector which could just be the start of some meaningful changes to some entrenched trends of 2022, it smells like “the game is afoot”:
Back in July we saw Microsoft (MSFT US) miss earnings estimates although the stock rallied on positive guidance, revenue and income fell short from Azure and other cloud services, we will be watching future numbers very carefully for signs that these areas are losing momentum. Importantly this was the 1st time in 6-years that MSFT missed earnings – we said…
Google has made fresh 2-year lows over recent weeks but we remind ourselves of what we said back in July – “We like GOOGL with the ideal level to increase our exposure sub $US100 assuming we see another wave of bearishness wash through US stocks.” This company like many strong businesses is still at the mercy of the global economy in terms…
