STOCK PRICE FORECASTING

Surging bond yields to test stock bulls’ mettle

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 30 : 18-May-18

The yield on US 10-year government bonds peaked at a new seven-year high of 3.12 per cent in Asian trading on 17 May. Given the low level of sharemarket volatility at present, there is the potential for a correction, as was the case in February when the bond yield rose to 2.9 per cent. A growing number of market watchers are advising investors to retain overweight positions with regard to equities in the current environment, while Ric Deverell of Macquarie Group expects the 10-year bond yield to rise toward four per cent in the medium-term.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S 500 INDEX, UNITED STATES. FEDERAL RESERVE BOARD, MORGAN STANLEY AND COMPANY INCORPORATED, STANDARD AND POOR’S ASX 200 INDEX, TELSTRA CORPORATION LIMITED – ASX TLS, TREASURY WINE ESTATES LIMITED – ASX TWE, BRAMBLES LIMITED – ASX BXB, CSL LIMITED – ASX CSL, BLOOMBERG LP, EUROPEAN CENTRAL BANK

Cracks emerging in the case for being bullish

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 27 : 22-Mar-18

The potential for a trade war has been identified as the biggest risk to the global bull market in a survey of fund managers by Bank of America Merrill Lynch. The prospect of a trade war has topped the list of "tail risks" for the first time since January 2017, in the wake of the tariff policies of US President Donald Trump. A sharp rise in inflation and a slowdown in global economic growth were the other key risks identified by the survey of 176 fund managers. However, 58 per cent of respondents expect growth of at least 10 per cent in global earnings per share over the next 12 months.

CORPORATES
BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, FEDERAL RESERVE BANK OF ATLANTA, FACEBOOK INCORPORATED, APPLE INCORPORATED, AMAZON.COM INCORPORATED, NETFLIX INCORPORATED, BAIDU.COM INCORPORATED, ALIBABA GROUP HOLDING LIMITED, TENCENT HOLDINGS LIMITED

Bear market might be just around corner

roymorgansocial Leave a comment

Original article by Patrick Commins
The Australian Financial Review – Page: 33 : 13-Mar-18

Australia’s S&P/ASX 200 has gained 90 per cent since reaching a low in March 2009. US markets have been the driving force behind the nine-year global bull market. However, Morgan Stanley has identified a number of factors that could be an indicator of a looming bear market. These include strong gains in the last 12 months of a bull market, outperformance by emerging market equities and a widening of credit spreads. Meanwhile, John Higgins of Capital Economics expects the S&P 500 to fall to 2,300 points by the end of 2019.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, MORGAN STANLEY AND COMPANY INCORPORATED, CAPITAL ECONOMICS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, HANG SENG INDEX, MARTIN CURRIE INVESTMENT MANAGEMENT LIMITED

Cohn exit triggers shockwaves

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 17 & 27 : 8-Mar-18

Sharemarkets in the Asia-Pacific region fell on 7 March in response to the resignation of President Donald Trump’s chief economic adviser, Gary Cohn, and futures pricing suggests further bearishness on Wall Street. Cohn was an advocate of free trade, and analysts say his resignation will heighten concerns about the potential for a trade war. Reserve Bank of Australia governor Philip Lowe says there could be major ramifications for the global economy if Trump were to broaden his tariff policy beyond steel and aluminium.

CORPORATES
UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, RESERVE BANK OF AUSTRALIA, IG MARKETS LIMITED, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. DEPT OF COMMERCE, SAXO BANK A/S, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, VISY INDUSTRIES AUSTRALIA PTY LTD, QANTAS AIRWAYS LIMITED – ASX QAN, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S ASX 200 INDEX, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BLUESCOPE STEEL LIMITED – ASX BSL, NIKKEI 225 INDEX, SHANGHAI COMPOSITE INDEX, HANG SENG INDEX, KOSPI INDEX, LONDON METAL EXCHANGE LIMITED

Share indexes tipped to test recent lows

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 27 : 15-Feb-18

Bank of America Merrill Lynch’s Bull & Bear Indicator suggests that global equities face a further pullback and could fall to around the level seen during the recent sharemarket rout. Meanwhile, BAML’s latest survey of fund managers shows that respondents’ average cash balance has risen by 0.3 per cent to 4.7 per cent, while equity allocation has fallen by 12 per cent and bond allocation has fallen to the lowest level in two decades.

CORPORATES
BANK OF AMERICA NA, MERRILL LYNCH AND COMPANY INCORPORATED, MSCI ALL COUNTRY WORLD INDEX, UNITED STATES. FEDERAL RESERVE BOARD, WESTPAC BANKING CORPORATION – ASX WBC

Shaky markets signal more share pain on way

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 17 & 27 : 8-Feb-18

Futures pricing suggests that the US sharemarket will experience further volatility, despite a rebound on 7 February. The bearish investor sentiment of recent days has prompted renewed support for "safe-haven" assets, including US government bonds and currencies such as the yen. Meanwhile, the Chicago Board Options Exchange’s Volatility Index briefly rose above 50 per cent on 7 February, compared with just 11.5 per cent a week earlier. However, Jeremy Lawson of Aberdeen Standard Investments does not expect global sharemarket volatility to be sustained.

CORPORATES
CHICAGO BOARD OPTIONS EXCHANGE VOLATILITY INDEX, ABERDEEN STANDARD INVESTMENTS, CREDIT SUISSE AG, BELL ASSET MANAGEMENT LIMITED – ASX BLM, STANDARD AND POOR’S 500 INDEX, DOW JONES INDUSTRIAL AVERAGE INDEX, STANDARD AND POOR’S ASX 200 INDEX, FTSE 100 INDEX, NIKKEI 225 INDEX, SHANGHAI COMPOSITE INDEX, HANG SENG INDEX

Stumble may be start of bigger global pullback

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 18 : 11-Jan-18

The S&P/ASX 200 recorded its largest fall in six weeks on 10 January, after posting strong gains over the last three months. Factors such as a rise in US 10-year bond yields to a 10-month high and a slight reduction in the Bank of Japan’s quantitative easing program weighed on the Australian market. Meanwhile, tax-loss selling is a major risk for the US market in January, as the Trump Administration’s capital gains tax reforms now allow US investors to defer tax liabilities until April 2019.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BANK OF JAPAN, STANDARD AND POOR’S 500 INDEX, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, BELL POTTER SECURITIES LIMITED, JP MORGAN AUSTRALIA LIMITED, WOODSIDE PETROLEUM LIMITED – ASX WPL, ORIGIN ENERGY LIMITED – ASX ORG, BHP BILLITON LIMITED – ASX BHP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Christmas rally shows no sign of slowdown

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 18 : 21-Dec-17

The latest survey of fund managers by Bank of America Merrill Lynch suggests that the global sharemarket rally may continue into 2018. The December survey shows that the average cash balance of respondents has increased from 4.4 per cent to 4.7 per cent, compared with the average over the last decade of 4.5 per cent. The survey also found that 54 per cent of the 203 respondents expect global economic growth to be above trend over the next year, while inflation is expected to be below trend.

CORPORATES
BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK, FACEBOOK INCORPORATED, APPLE INCORPORATED, AMAZON.COM INCORPORATED, GOOGLE INCORPORATED, ALPHABET INCORPORATED, BAIDU.COM INCORPORATED, ALIBABA.COM CORPORATION, TENCENT HOLDINGS LIMITED, BELL POTTER SECURITIES LIMITED

Bulls to run all year but risks build for 2019

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 30 : 3-Nov-17

The S&P 500 has gained 15.2 per cent so far in 2017, while the S&P/ASX 200 has risen by just 4.7 per cent. They have gained 17 per cent and 8.5 per cent respectively when dividends are included. John Normand of JP Morgan expects equities to continue to rally in 2018, although he says the S&P 500 is likely to record growth in the low double-digits when dividends are taken into account. Meanwhile, he is bearish about the outlook for government bonds, and warns that there are a number of risk factors for global financial markets in 2019.

CORPORATES
STANDARD AND POOR’S 500 INDEX, STANDARD AND POOR’S ASX 200 INDEX, JP MORGAN AND COMPANY INCORPORATED, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK, BANK OF JAPAN, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES

Fund managers wind back expectations and hoard a little extra cash

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 28 : 17-Aug-17

Bank of America Merrill Lynch’s latest survey of fund managers shows that just 33 per cent expect a rise in global corporate profits in the next 12 months, compared with 58 per cent in February 2017. Chief investment strategist ­Michael Hartnett says the survey provides a "warning sign" of the likely performance of shares against bonds, as well as cyclical stocks against defensive stocks. The survey also found that the average cash balance of the 174 respondents is now 4.9 per cent, compared with an average of 4.5 per cent over the last decade.

CORPORATES
BANK OF AMERICA CORPORATION, MERRILL LYNCH AND COMPANY INCORPORATED, STANDARD AND POOR’S 500 INDEX, MSCI WORLD INDEX, STANDARD AND POOR’S ASX 200 INDEX, NASDAQ, UNITED STATES. FEDERAL RESERVE BOARD, EUROPEAN CENTRAL BANK