The eight-week rotation thematic - the breakdown in high price momentum plays is accelerating

The eight-week rotation thematic - the breakdown in high price momentum plays is accelerating. There is no doubt global markets are starting to position themselves for a shift away from high growth into defensive plays. The breakdown in high price momentum stocks like Tesla, Amazon, Twitter, E*TRADE coupled with the falls seen in LinkedIn and Yahoo Inc. in the last eight weeks are signs that the US is looking to safe-guard profits and that a new thematic of trade is brewing - the return of capital. This is an interesting dilemma for Australian investors in Australian stocks; the return of capital trade has been the trade for last three years. The development of this in the US suggests that the carry trade from the US and Japan is likely to continue to support the dividend players, despite the fact they are on the limiter on yield metrics. (VIEW LINK)