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On Sunset Strip > Trading Day Wrap From Blue Ocean 20170912 - December 3, 2017 9:10pm

Economists have been forecasting RBA rate rises since 2014. Funny that it may come true when the property market has started to roll over. Sadly I think RBA is stuck and I can't see them moving till they have to...and that could be longer than most expect as US Fed, ECB and BOJ continue to play currency musical chairs.

On Oz Construction Cycle: The Impact Is Now - September 20, 2017 12:52am

In a tough market, timing is everything...good call. S&P 500 had the first fall over 1% since Oct 2016.

On Technicals - Dow Jones - at same overbought levels as in 2007 and 1999 - March 21, 2017 10:36pm

In a market where bottom up investors have struggled to deliver outperformance, momentum models (like technical analysis) have allowed investors to better time the entry and exit points. I found that an integrated multi-style approach (i.e. including momentum) seems to smooth out big swings in the market. The macro risk in global trade and Euro issues may be the catalyst that drives the profit taking.

On Technicals - Dow Jones - at same overbought levels as in 2007 and 1999 - March 21, 2017 4:13am

Great year guys....you have a tough pcp to beat in 2017!!! Have a Merry Christmas and Happy New Year!!!

On Thank you and all the best for 2017 - December 23, 2016 1:45am

Sure....I think that has played a decent part in their growth. What we are seeing with China is that they realized that they needed to grow the overall growth pie by helping the infrastructure and industrialization boom in all these countries. We are seeing this in large parts of South America and Africa as well as other Asian countries like Singapore, Malaysia, Indonesia, Sri Lanka and even Pakistan of late. The capital investment driven by China is helping these countries to attract more external investment capital to make the next energy, infrastructure and industrialization steps. As we have seen in the past, when these countries make these steps forward, they create bigger middle class which drives more consumption. China's global strategy has moves to growing the pie than taking a bigger slice of a declining pie.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - December 7, 2016 1:46am

Agree....I like gold in the long term portfolio hedge basis, but on the commodity price perspective, we are likely to see oil outperform gold in the next 6 months.

On Grossly Unintelligent! - August 5, 2016 6:07am

Yep...but that effect was also seen in the overall market. The interesting trend is the the average index now outperforming the weighted index. Sustainable Yield is not just with banks!!!

On SHIELD – Sustainable High Yield | Rudderless economy heading to lower growth - April 15, 2016 8:01am

Funnily enough market can get too negative from too positive region after a few sentiment killer articles. Banks are moving mainly on macro factors and they will move as US Fed changes. Banks will come back in favor as the market risk/return mix matches up. If the US Fed flags no rate changes, AUDUSD goes to 80 and RBA cuts rates...then Banks are going to move 10-20% higher. We live in a fickle world where risk and return are a relative measure that can change dramatically within a few days.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - March 29, 2016 12:58pm

I agree. The VIX and the corporate profits are all pointing to market looking for a reason to fall over. FOMC flip flopping seems like a good enough trigger to push this market into another profit taking slide.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - March 29, 2016 10:31am

The new media and outdoor media have had their big runs, but the old media has been ignored for a while. M&A and Election spending should bring them back in fashion. I think APN, PRT and FXJ are really cheap. Never discount the need of Foxtel to acquire to make a float viable.

On Equity Industrial Engineer | Media Sector: Time to cover your Shortens and Turn-bull - March 21, 2016 5:36am

That has been a trend globally with demographic change, but the drop in US has been a lot higher than Australia in the same period. Even if we assume that is the case, then that sets up other issues regarding the sustainability of the US economy and debt with lower workforce. These are issues faced my all the major economies, but US as the shining star is pricing in too much optimism. US is growing, but likely to grow slower than what the market is expecting for the next year or two. This will put real pressure on US Fed to stay on the sidelines in 2016.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - February 22, 2016 10:59pm

link added :)

On SHIELD – Sustainable High Yield | Yield trade to benefit from growth risks and volatility - December 14, 2015 5:53am

Since my Tigers are not there, I hope JT finally gets his title. Tigers stole the title from the Cowboys a decade ago and we feel bad...not really.

On Footy Finals 2015 | Hawks and Cowboys expected to deliver in tough final series - September 11, 2015 12:01am

The PE bands are based on forward long term average PE as well as +/- 1 standard deviation and +/- 2 standard deviation. History tells us that market pre GFC traded just above +1 standard deviation over fair value with high interest rates and high currency. Given the current low rates and low currency, we should get close to +2 standard deviation in the medium to long term.

On Chart of the day - September 4, 2015 12:14am

The EPS Growth decline is a 5 year trend despite better balance sheet, lower cost of borrowing and lower currency. The Earnings Revision and ROE trends point to low growth outlook well into 2016. Yield premium is the trade for 2016....again!!!

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - September 3, 2015 2:19pm

The last time CSL traded above $100 (i.e. pre 1 for 3 split) was 17th Oct 2007 (i.e. pre GFC high for the market).

On Bets over - the race to $100 - August 4, 2015 1:34am

The great thing about technological change is that the competition will force the next step even faster. Big global disruptive firms with fancy brands always help to give exposure and drive change even faster. The tide has turned with battery technology and clean energy. Already utilities in Australia are marketing packages with solar and battery very openly. It would be logical to assume the efficiency will improve exponential in the next year or so as we have seen in solar cells. Tesla may or may not be the answer, but they definitely made the world aware of where battery technology is at and how well it can co-exist with clean energy.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - June 24, 2015 1:21am

Great event and hope this is the start of many more information sharing events. It's good to hear from quality people with over 20 years experience. Finance sector in Australia has been shrinking in size and quality for a number of years.

On “Livewire Live” Broadcast: Anton Tagliaferro, Geoff Wilson and Ben Griffiths talk strategy and stocks - June 21, 2015 11:47am

US population compared to Australia is approx 15 times. If we are averaging around 30,000 new jobs for the past few months, on comparable basis that is like US creating around 450,000 new jobs. The reality is that US is creating half that despite it being one of the few countries on the recovery path. I am no statistician, but the relative comparison tells me that there is something wrong when economic growth is below trend, business capex is weak, consumer sentiment is weak, there is no credit growth and we are coming to the end of "once in a lifetime" commodity boom. As a broker I would love to see this kind of job recovery, but it does not add up. I could be wrong :)

On Australian unemployment rate falls - June 11, 2015 3:15am

Banks have been beaten up a fair bit and I expect them to see buying support by the end of the week. There will be a lot of noise with NAB that will confuse the sector for a few days, but rates are staying low for a while and yield is still the main game.

On Equity Engineer – May 2015 | Clowns to the left, Jokers to the right, RBA stuck in the middle with you - May 11, 2015 12:56pm

Just to update our view on TRS: We still maintain a very negative view on the overall retail sector with domestic consumers expected to cut spending even further. We turned negative on retail staples last month as WOW decided to initiate a large scale price war. TRS is basically going to get even more pressure from the K marts, Targets and Big W’s with the race to the bottom. The key risks mentioned before like currency, budget, unemployment, competition and consumer sentiment are all still in play. If I had to pick beaten up retailers…SUL and KMD offer better risk return than TRS.

On This time last year - The Reject Shop - May 7, 2015 10:42pm

After watching this clip I realized why kids in grade 4 get more done than governments :)

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - April 20, 2015 9:16am

History tells us that nothing with big margins ever last as the cycle turns. Iron ore cycle has turned and it does look inevitable that we will see even lower prices as Roy Hill supply comes on while smaller players hang on to dear life and burn cash. Miners only care about self interest and not about the overall damage to the business model.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - April 5, 2015 1:11pm

I'll keep an eye on it. If the problems persists, I'll load up the pdf.

On Sunset Strip | Aussie Afternoon Institutional Market Wrap - March 31, 2015 7:28pm

I always found it quite amusing that no one really talks about it...must be some central bank club rules like the fight club.

On Sunset Strip | Aussie market continues its recent sideways trading pattern with lack of any real sentiment - March 24, 2015 10:17pm

Agree, but the historical trend of RBA suggests that they are likely to change the words towards an easing bias and leave the rate change to Apr/May. But in the longer term I can't see investors staying out of equities for long given that the low interest rates are here to stay.

On SHORT TERM MARKET CALL >>> TAKE PROFIT | • Rate cut outlook already in the price while we expect it to be left unchanged with housing bubble... - February 2, 2015 11:10pm

Unemployment is the key to the consumer sentiment. I think if the currency stays above 80 cents in early 2015, we will get a cut. On the flip side if the currency falls below 80 cents then we will not get a rate cut. Retail will struggle even if you cut rates and the currency is 75 or below. If a few retailers start rolling over, then you start adding to the unemployment line and there will be a cabinet switch.

On Stevens slashes rate cut hopes, underpinning Aussie: While the language towards the currency is an escalation of jawboning seen earlier in the year, by... - December 11, 2014 11:12pm

We had a sell on JBH around $20 with target price of $15 soon after the budget. Recent update and macro headwinds suggest that JBH will most likely go lower in the short term. You can't fight the macro when you are a cyclical.

On iPhone 6 leaves big mark on retail sales - November 4, 2014 4:49am

I think the uptick was mainly short covering after AGM comments. The weakness since then shows that the market is not willing to buy at these multiples given the headwinds. Even on a relative basis, DSH offers better store rollout growth story in similar space at lower multiple.

On iPhone 6 leaves big mark on retail sales - November 4, 2014 4:59am

The credit goes to our gaming analyst Nick the science project Caley in picking the winner.

On Baillieu Holst Melbourne Cup Top 5 picks in order...No 5 Protectionist, No 1 Admire Rakti, No 11 Mutual Regard, No 22 Lucia Valentina, No 24 Signoff - November 4, 2014 5:57am

Credit is where credit is due. They outplayed the Roosters in their own game. Now lets hope they got another classy game in them.

On Sunset Strip | Aussie market turned the corner of negative global investor sentiment despite currency falling on negative retail data - October 1, 2014 1:21pm

The market is trying grapple with the move from yield to growth when there is very little growth. I don't think they are mutually exclusive. You can have good quality stocks on relatively good value with good growth and yield outlook. Once the FOMC short term risk is out of the way, market will start to trend up again. Institutional investors will be taking time off with school holidays next week while retail investors will have a bigger say. I expect we will see majority of the big caps to turn positive by the end of the week.

On Top 10 reasons why you should get back in the market (1) Market pullback has reached our S&P 300 pullback target level of 5400 (2) China has moved to stimulate... - September 17, 2014 12:54am

Breville will recover with new management announcement while Myer needs serious work. Myer is struggling to work out who is their customer base and what they can offer that is unique....till then there is no need to be there.

On Sunset Strip | Aussie market started positive with US lead and then dived down as sentiment changed with falling Iron Ore and US plans for Iraq - September 11, 2014 1:50pm

Short STO/WPL Long BHP/RIO

On Negative technical theme on oil sector continues. The WTI oil price is approaching key technical support @ US$91.26 - September 11, 2014 12:12am

That is true, it is a bit like being negative on the market. Things all move in cycles, it is a matter of where you are in the cycle. House prices for me are driven by return on investment of the asset and underlying growth in real disposable income to support the asset. Once both branches are over done, I think it is a matter of time before the correction comes. If the argument is that the Chinese are parking their savings, I think US and Europe offering better risk/return than Australia. The question you have to ask is who is positive on house prices and their motives...Brokers, Governments and central banks have to hope that they hold up till the global growth picks up or it could get very messy.

On Sunset Strip | Aussie market delivered a flat day despite the positive global lead - August 26, 2014 1:43pm

Bunnies still run with only one GI. If GI gets injured, they are history. Hard to look past Roosters and Manly in the big games. Storm and Cowboys are the momentum players. Not saying Souths are not a top 4 team, but for their roster...not showing the class of Roosters or Manly consistently.

On Sunset Strip | Aussie market had a solid positive day on the back of US positive lead and BHP demerger news - August 15, 2014 8:06am

This is the big problem right now for stock picking. If a stock gets belted enough, M&A becomes a potential. It's almost like US economy and QE for th epast few years. I think in that space WEB has moved up and will stay strong, but FLT is by far the best in class. Backing FLT to hit $55 despite few brokers going negative.

On Sunset Strip | Aussie market had another boring low volume flat day due to lack of global sentiment - July 8, 2014 11:05pm

I remain a big fan of TMT stocks in the next 12mths. Stocks that have missed the recovery cycle in the last 12mth compared to their peers are CRZ, SXL and TEL. Given the regulatory changes are coming, SXL for one is going to be front and centre in terms of M&A target.

On Sunset Strip | Aussie market had another boring low volume flat day due to lack of global sentiment - July 8, 2014 10:53pm

It is also funny that market is shocked that warm winter hurts KMD. KMD has a solid brand and global expansion plans. Not sure you need discretionary retail exposure, but KMD is one of the better picks and I expect it to recover from these levels.

On Sunset Strip (Afternoon Report) | Aussie market opened negative on the lack of global lead and remained weak with selling pressure on all fronts - June 24, 2014 10:54am

Quant targets are driven by relative valuation trends and macro thematics. Global growth expected to remain low while travel industry expected to remain stronger with higher currency and consumers looking for experience spending. Downgrade matters if its structural, but cyclical downgrades like this is no reason to change targets. FLT remains a top quality global growth travel stock with solid growth outlook. We expect FLT to hit $55 in the next 12mths and reach over $60 in 24mth assuming the business model and the global macro outlook remains as we expect now.

On Flight Centre (FLT) | Quant BUY ($55) - Published 22nd Nov 2013 - Nothing much has changed in this quality global travel growth story | We have changed our FLT... - June 15, 2014 11:55am

That is correct. Market does not move in straight lines and we have had a positive long term view for a few years. In the short term we see times when profit taking makes sense when return outlook is less than the risk on the back of macro, valuation or even sector switch. The red lines are the time to take profit or reduce market exposure while the green lines are when you add to your exposure.

On Equity Engineer - Jun 2014 | Central banks pushing the markets higher | We turned positive in the short term on May 22nd with China data beating expectations,... - June 3, 2014 2:43pm

Exactly. Any short term change in our market call will be reflected on Sunset Strip.

On Equity Engineer - Jun 2014 | Central banks pushing the markets higher | We turned positive in the short term on May 22nd with China data beating expectations,... - June 4, 2014 2:17pm

I have been negative on Discretionary Retail for a while and we went negative on the market earlier this month. We were very negative on MYR and TRS from the start of the year and now the rest are looking stretched with macro outlook.

On Harvey Norman (HVN) - When Harvey meets Hockey - Quant Sell ($2.75) - April 29, 2014 4:27am

I am very positive long term, but short term the expectations have priced in substantial growth that is unlikely to happen. But if we get some stellar numbers out of the big US companies and Russia settles down, we may yet bounce back quicker than I expect....it's a long shot at these multiples.

On Sunset Strip (Afternoon Report) - Aussie market took another belting and the outlook remains negative due to US reporting/macro risk and Russia/Ukraine/Euro... - April 14, 2014 9:36am

I agree...When you line up school holiday, may selloff, currency, Aussie VIX and valuation levels....it makes sense to take profit.

On US market move breaks momentum and currently on technical support level to break the uptrend - April 10, 2014 10:37pm

China stimulus and Euro printing promise if inflation stays low did not stimulate the market. It needs a real kicker to get over the US highs. I expected us to have a down day today with the whole world waiting on US job data and tapering implications.

On Sunset Strip (Afternoon Report) - Aussie market closed slightly up following similar global lead as markets wait on US job data out Friday - April 3, 2014 7:53pm

It's easy to be a pundit when you are not held accountable to your calls. Always check if a strategist or pundit has a model portfolio, if so, how have they performed. Generally the pundits with no accountability are the noise.

On Ignore the noise of the media and start listening to those who are in the markets - a good article by Barry Ritholtz - April 9, 2014 10:17pm