Rudi's View | Jan 17 2020
Part Two of the calendar year's first update on Conviction Calls for the year ahead.
By Rudi Filapek-Vandyck, Editor FNArena
On Thursday afternoon, while I was writing Part One, I couldn't help noticing the local share market was charging higher. I thus tweeted: Question that needs to be asked: is that a raging bull out there or are we witnessing a herd of lemmings?
To which a few fellow-twitterers responded by asking: what is the difference?
The difference, of course, is a sustainable rise in scenario number one and the opposite, exact timing unknown, under scenario numero secundo.
Here's what market strategists at CLSA had to say on the same day: "With sentiment indicators at or near record levels, we see global equity markets vulnerable to a short 2- to 3-week lasting pullback/washout into a second half of January, which we would expect to be the set up for another rally in equities into April/May.
"From there we would expect to see selectivity and distributive signals develop."
I cannot help but think about what the local February reporting season is going to offer. My best guess is: elevated volatility. Companies better meet or beat market expectations, or else.
I received an invitation to contribute to a general outlook story for the Australian share market. Turned out, they liked my contribution so much at Finder.com.au, they turned it into a stand-alone story for FinderX.
So here it is, my outlook story for Australian equities: https://www.finder.com.au/investing-in-2020-volatility-and-opportunities
Contrary to years prior, analysts at stockbroker Morgans have been rather slow to jump back into action post the 2019 end-of-year holiday break, but the strategy desk was fast as lightning to get the short list of Best Ideas across the national network of brokers and advisors.
These Best Ideas, explains the broker, are those stocks believed to offer the highest risk-adjusted return over the coming twelve months, supported by a higher-than-average level of confidence. Another way of looking at it is, these are Morgans' most preferred sector exposures.