Wednesday, January 25, 2012

Market is Strong like an Oxe - Buy the Dips

Apple come in with a record breaking revenue qtr, the numbers are truly incredulous, the second highest ever reported earnings since exxon - http://www.splatf.com/2012/01/apple-1q12-charts/
I do see some weakness in the next 12 months as we see a lot of the sales have come from iphones and ipads - an increasingly competitive space.  However, even leading up to the earnings report, it was trading at cheap multiples, so it still would be risky to ever short Apple.

Greece may be put on 'selective default' by the SP - not sure what they really means, but the indices still remain resilient coming off their 1% sell-offs to close down 0.2%.  German PMI was also better as we see manufacturing data improving in all regions.  However, we got to remember that the market has been seeing lower yields across europe, all back to normalise levels as we see a sharp relaxation of European financial risk.

However IMF trimmed global growth estimates from 4% to 3.3% in 2012 - citing europe as the main headwind.

Australia's domestic data seems good from the PPI front - low inflation does leave a possibility of a rate hike in the first qtr.  Given the latest employment report ticking to the downside, as it posted the weakest growth since 1992.

Price action has been strong and long this January with markets being up 10/12 sessions, and buying on each weak open as seen a good prospect for the year going forward.
The allocation attention is now moving towards the cyclical stocks - as it's become clear that market prices has clearly lagged improving data; given the strong AUD and prospects of strong cyclical recovery in the US - it may be time to start allocating some of my AUD $ into US equities.  I already hold AMZN, GS, ATVI - will probably look to add a few more over the next few weeks.