Sunset Strip | Aussie Afternoon Institutional Market Wrap

Mathan Somasundaram

Aussie market pulled out sixth straight positive day on low bank holiday volume despite weak US growth and mixed China data. That makes it 25 positive days out of the last 32 trading days since mid-June and it also starts the week positive after 3 straight weeks of positive return. We have had a magical run over the past 2 months but markets don’t go up in straight lines. History shows the market did a similar stable run through May, June, July and then fell apart in August in 2015 before the reporting season. Given that the market is trading at higher multiples with lower yields points to similar risks in 2016. Risk management suggests trimming high risk growth stocks that have performed well going into reporting season. Time to buy Big Banks for lower rates / cheap money and buy Big Miners for weaker USD / China stimulus….TLS, SPK, CSL, RHC, Supermarkets, Infrastructure and Utilities are likely to be funding source!!! US economic slowdown and US Fed backtracking will put a rocket behind Gold…don’t look back in anger!!! (VIEW LINK)


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