Charlie Aitken says tonight's payrolls data in the US could set the scene for 2014. Big stodgy predictable cash flow defensives, who have been the main beneficiary of long bond yield compression due to their bond like characteristics will be sold to fund rotation to cyclicals as it becomes clear the US economy has reached a self-sustaining escape velocity and no longer needs the same degree of monetary policy morphine. This is why I am cautious on Magellan Financial Group (MFG) and bullish on Platinum Asset Management (PTM). Their portfolios, global strategies and performance are the polar opposite right now. In Australian equities that means our market must now be led by big global USD earning cyclicals. In the ASX20 that means BHP, MQG, QBE, RIO, WDC, WPL. This is now where the greatest EPS revision and P/E expansion capacity lies.
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