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)



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Hi Evan, This is an interesting point as this would push against the general derating of the big ASX yield plays, the banks. If the US market is switching to the quest for yield, then it would drive buying for yielding stocks over here, even though we are looking fully priced (and then some). Is that about it?