\n\tBy Rudi Filapek-Vandyck<\/p>\n
\n\tNothing's going to stop market strategists at UBS now that the Greece-Europe-induced sell-downs have ceased pushing share prices lower. In a market update this morning, the strategists acknowledge out of the five identified major market drivers, four had turned negative, but hope conquers all.<\/p>\n
\n\tUBS is expecting at least one of these drivers will positive, or at least neutral, which should allow equity markets to resume their upward path. The drivers in casu are: Eurozone debt woes, US economic recovery, China tightening, RBA tightening and the Rudd government's Resources Super Profits Tax proposal.<\/p>\n
\n\tNo guessing for which of these drivers remains a positive factor and which one might have turned at least neutral.<\/p>\n
\n\tUBS has stuck to its prediction of 5550 for the ASX200 index by year end, citing ongoing earnings recovery and relatively cheap valuations.<\/p>\n
\n\tNote that I have been reporting for two weeks that earnings expectations have ceased improving in April. In fact, if my analysis is correct, they have trended down a little into May. Whether this will prove a temporarily setback or the reversal in the underlying trend is something that will become clear in the months ahead. All eyes on the August reporting season?<\/p>\n
\n\tMarket strategists at RBS Australia picked up on the matter as well and their response is: we are not experiencing a trend reversal leading to declining earnings expectations in the year ahead. What we are witnessing, argues the team, is the world “transitioning from easy to tighter monetary conditions with volatility due to structural issues in foreign market economies”.<\/p>\n
\n\tRBS strategists have nevertheless made a few key decisions in regard to the composition of their Model Portfolio. They have gone maximum underweight banks and moved overweight miners and materials in a big way.<\/p>\n
\n\tIn addition, property trusts, telco's, utilities and IT companies have now regained focus (and exposure).<\/p>\n
\n\tRBS is not as bullish as UBS, its projection for the ASX200 assumes 5300 by year end.<\/p>\n
\n\tOver at JP Morgan, the team of small cap specialists, reiterated their preference for the following eight stocks (all rated Overweight): Ausenco ((AAX)), Blackmores ((BKL)), Campbell Bros ((CPB)), Norfolk ((NFK)), Retail Food Group ((RFG)), Salmat ((SLM)), TOX Free Solutions ((TOX)) and TFS Corp ((TFC)).<\/p>\n","protected":false},"excerpt":{"rendered":"
UBS still sees the ASX200 at 5550 by year end, while RBS sticks to 5300. JP Morgan has lined up its favourite small caps.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/56596"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=56596"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/56596\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=56596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=56596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=56596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}