Report Date: 20 July 2015
Where are we in the Cycle?
Indicators continue to point
to deteriorating cyclical conditions with no evident improvement in growth
prospects and a resurgence in the U.S. dollar. Also this week: why bond yields may
have already adjusted; and, Euro area growth remains confined to a narrow
base reducing the likelihood of an acceleration in activity.
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Market Directions
A more positive equity
market tone helped resource sector prices but the week finished with
downward pressure on gold and oil markets. Also: why gold equity prices
need more bullion support just to hold steady; and, the connection between
earnings and S&P 500 equity prices.
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Portfolio Performance and Positioning
Exploration stocks were a drag on the macro portfolio model with large
cap stocks, notably excluding Fortescue Metals Group, performing relatively
well. There were no recommended changes.
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Stock Reviews and Rating Analysis
Universal Coal
(UNV:AX) continues to track well against its targeted
operational outcomes which anticipate rising production between 2015 and
2019. The company is an unusual example of a profitable coal mine developer
with positive value momentum possibly escaping attention because it is
servicing the South African market - a big advantage over others in the
sector at this point in the cycle.
For recent company reports...