Afternoon Market Report, the local market ran out of steam as data out of the US has investors contemplating a faster rate hike cycle...
- Local market ran out of steam after US inflation and retail sales data points towards faster rate hike cycle.
- Telco sector took a belting today on the back of the weak TLS result showing there is more competition and lower margins and no real clarity on how the post NBN world will settle. SPK was also belted on weak result and TPM/VOC took it on the neck as markets hit the exit button.
- US Fed updates are in play for the next month (1) Minutes from last month’s FOMC meeting will be released on the Feb 22nd (2) FOMC’s next meeting on Mar 14/15th.
- US inflation data was string with retail sales and that sits in line with better than or improving inflation outlook for the rest of the world including China.
- US political uncertainty once again took center stage with resignation, Russian links and Middle-East policy setting. The twitter attacks from the US president towards the intelligent agencies will continue to undermine the system and raise risks for investors.
- China is supposedly looking to cut back on coal and that may re-ignite the rebound in coal prices again.
- AUDUSD is moving higher on commodity prices despite stronger USD….even spot gold is holding up better than expected.
- Local market optimism has driven stretched valuations even higher while momentum remains robust and volatility is in dead calm drift mode. Local market is potentially in the process of forming a “double top” on technical basis as it hits the Dec high (i.e. S&P 200 just above 5800) before pulling back.
- Mining services sector remains the best value to growth exposure…recovery story in play as the unexpected commodity cycle recovery in 2016 will start to show solid cashflow in miners and support better capex outlook.
- China on US treasuries….
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2017 - Now > Blue Ocean (AUS) > Market Portfolio Strategist 2012 - 2017> Baillieu Holst (AUS) > Head of Strategy, Quant and Data Analytics 2009 - 2012 > Bell Potter / Southern Cross (AUS) > Head of Quant and Data Analytics 2007 - 2009 > LIM...
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