Sunset Strip > Trading Day Wrap From Blue Ocean 20170727

Mathan Somasundaram

Local market flip flopped to deliver a slight positive day despite big bounce in AUDUSD/commodities and a fall in bond yields. July count sits at 10 up days and 9 down days…we have had the first 3 consecutive positive days in July. Expect a run to finish July in positive mode but be nimble in August with reporting season ahead!!! Commodities had another good day…oil up on US stockpile reduction and OPEC hope…iron ore up on China steel futures and shutting inefficient players…copper on fire. US Fed played the dovish card to pull USD lower. Central banks globally are playing the dovish card to protect asset bubbles and kick the can down the road…no one wants to face the reality and correct asset bubbles to make structural improvement…everyone wants to live in fool’s paradise till black swan event hits…and then negative rates for everyone!!! RBA rate hike joke was shot out of the water by the CPI data yesterday. RBA is sitting on very little ammunition to stimulate the economy in case of slowdown with asset bubbles frothing…nothing to see here as far as RBA action is concerned…they can’t cut and they can’t raise…status > MIA!!! The best performing sectors were Gold, REITs and Staples while the worst performers were Miners, Telecom and Financials. On the sector/stock front….(1) LYC on the move in recent week as rare earth back in fashion (2) A2M keeps moving on the upgrade outlook (3) SBM was the best of the gold stocks (4) SVW remains on the run after solid Caterpillar result (5) GBT remains on the negative side on Brexit overhang (6) BSL lead the steel stocks down on US steel regulation risks (6) IGO remains weak since quarterly update (7) Gold sector remains the place to be for the next few weeks as risks mount and USD falls (8) Energy costs and strong currency will play big on outlook statements during the reporting season ahead!!!

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About this contributor

Mathan Somasundaram

Mathan Somasundaram

Market Portfolio Strategist, Blue Ocean Equities

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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