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For those that don’t know or are yet to investigate, two weeks ago MB launched its new paid investment advice newsletter, Macro Investor.
The fourth edition will be published 8.30 Monday morning. In the mean time, find below the contents page of the past week’s edition for you to consider a 21 day free trial subscription. Remember, we’re offering a once only “founding subscriber” offer to MB readers; a 20% discount until the end of July rounding the price down to $385.
Macro Investor Volume 1, No 3
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Macro Into the doldrums?
- The market is addicted to quantitative easing for good reason: it works.
- But data doesn’t appear weak enough to force the Fed’s hand leaving markets swinging.
- Chinese GDP was a ray of sunlight in an otherwise lacklustre week, but questions remain.
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- Poor local confidence.
- Made worse by a bad unemployment report.
- China, however, hits its targets.
Technicals Commodities lead the way
- Risk markets still in trading range, although short/medium term trends are emerging.
- King US Dollar dominates but commodity markets are rising once more.
- Australian stock market is sideways for now, probability of sustained breakout is increasing.
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Stocks
- In spite of longer-term threats to the AUD and travel agency services, FLT is priced resiliently.
- With fundamentals and technicals positive we feel it’s good time to wade in before FY12 earnings.
- A larger holding for the long-term however would require stronger signals on movement and risk.
- Notwithstanding its strong run to date, GNC still stands to gain in the soft-commodity bull market.
- Better yields locally come as conditions worsen overseas, particularly in the US and Russia.
- Demand for grains globally remains high, and especially from China where winter crop was poor.
- Pawn-broking and payday lending may be seen as distasteful, but CCV’s growth speaks for itself.
- CCV operates a highly successful model in an often difficult niche and is up-scaling its image.
- With a model that’s relatively recession-proof and strong earnings growth, CCV’s price looks good.
Trades
- The millionaire factory remains out of favour in the bear market and is setting itself up for a short.
- A breakout price movement from January has stalled and the stock is now forming a head and shoulders pattern.
- Any break below $25 could see the silver doughnut fall sharply to $20 sharply, forming, in our view, a tasty short.
(SEK)
- Market sentiment around this online job-seeking company has faded, triggering a short trade.
- A cancelled capital raising and a subsequent drop in ANZ Job ad figures sparked this decision.
- Rising unemployment somewhat vindicates, but this is still likely to be a short-term position.
(TRS)
- TRS’s share price is decelerating, hitting strong support at $9 and creating a base.
- A possible breakout on sentiment is forming due to investors in search a high yield.
- No entry is confirmed yet but we definitely aren’t putting this trade in the bin.
Fixed Interest Bendigo pays more because it can
- Bendigo Adelaide has a very strong franchise based on its well-developed community banking model.
- Despite its smaller size, it has good business and geographic diversity with low arrears rates.
- Bendigo’s listed securities and term deposits offer a solid alternative and diversification to the big four.
Property
Tight supply won’t prevent falling prices
- Despite the latest census, recent population and commencement statistics highlight ongoing tightening of supply.
- Australians typically adjust to this by bunching up, with the number of people per dwelling increasing since 2006.
- Yet while a notionally bullish indicator, significant latent capacity remains and listings continue at well above average.
- Prices rise for a sixth straight week, driven by rises in Sydney plus Melbourne and Perth.
- On a 12-month basis however, national aggregates remain in a material downtrend.
- Capital city home prices have now fallen -6.1% since values peaked in October 2010.
Classroom The BEAR is bullish
- A new BEAR fund will be more use to bulls than bears.
- A useful new hedging tool.
- Expensive at first glance but clear and simple.
Portfolio
Below is the performance chart for Macro Investor’s three model portfolios – MacroIncome, MacroGrowth, MacroTrades – updated to this morning’s close:
About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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