Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market delivered a strong negative day on solid $5.5b turnover after mixed global sentiment. The US data continues to suggest that the rate rise in US will be delayed to Sep as we have been assuming. The RBA board and ASIC seems to be on the same page as far as warning about the housing bubble and not borrowing above limits while the governments wants everyone to borrow and spend. The mix of failed policies from the last budget, conflicting new policies and fairy tale assumptions are unlikely to deliver confidence to the markets. The overall effect remains a fiscal tightening despite the government rhetoric. As the market gets down to 5600 yield weighted fair value, time to BUY Banks (NAB, ANZ), Telecoms (TLS, SPK, AMM, VOC, MTU) and Healthcare (ANN, CSL, RHC, SRX)…Banks expected to outperform Big Miners short term…more return than risk now!!! We remain positive on the Aussie gold miners with growth recovery driving inflation fears and Grexit worries. Preferred picks are NCM, NST and SAR. (VIEW LINK)