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The lockdown stocks play was out in full force yesterday on the ASX yesterday as travel and aviation companies were sold off but retailers – especially onliners – saw strong gains.


The banks and big miners held firm and helped the ASX-200 end with a smaller fall than seemed possible at the start of the day.


The ASX 200 lost just 0.7 points to close at 7307.3, having been as low as 7273.7 (0.3%) in late morning trade.


Travel stocks were under pressure as borders slammed shut on news of COVID outbreaks in Sydney, Brisbane, Perth, and the Northern Territory. Webjet, Qantas, and Flight Centre all declined by about 4%. Rex shares were down 2.4%.


Shares in Helloworld fell more than 2% and Corporate Travel saw a 2.6% loss.


Those that saw rises were led by online homewares group, Temple & Webster – their shares rose more than 10% as investors reckoned they might repeat their strong growth of the 2020 pandemic and beyond.


Likewise shares in Kogan jumped sharply – up by more than 6% for the same reason. But it is already suffering from being overstocked so any gains might be very slow in coming, if at all.


JB HiFi had also did well in the 2020 pandemic but investors saw small gains this time – the shares up just 1.2%.


Shares in rival Harvey Norman did better – up 2.1% but gains for these two and Kogan are based on a repeat of last year’s strong surge in home office and working from home equipment and tax write offs.


You have to wonder how much legs the home office boom will have this time around if the lockdown persists.


That’s probably also why shares in Wesfarmers only managed a 1.3% gain, despite Bunnings and Officeworks doing very well in 2020.


Shares in women’s fashionwear group Mosaic brands (Noni B, Rivers, Millers and City Chic) saw a 4% loss as it was hurt by the lockdowns last time when many shopping malls closed. Punters see that being repeated if the lockdowns persist.


Shares in Premier Investments rose 1.8% — it rode out the last lockdown with considerable taxpayer support but then saw sales explode (along with profits) in the rebound. Investors see it repeating that if the lockdowns continue.


Mall operators were sold off as well.


Securities in Scentre – the biggest shopping centre owner in the country – dropped 2.5% but those in rivals in the shape of Shopping Centres of Australia (down 0.3%), Mirvac (down 1%) did a bit better.


Stockland though saw its securities down 2.4% (it has retirement as well as new homes to go with its retailing investments).


CBD owners Dexus and GPT saw small falls of 1.6% and 0.9% respectively – investors think their growing logistics investments might be a cushion if the lockdowns deepen.


Consumer-facing shares were higher as panic buying drove Woolworths shares up 2.9%, Coles 0.6% higher, and Woolies’ new drinks offshoot Endeavour Group up 3.8%.


Investors reckon its Dan Murphy’s chain will do well if the lockdowns persist, but a big drag will be its hotels revenue and earnings from poker machines. They were crunched in 2020.


Retailer Metcash saw its shares up 3.6% thanks to the Covid lockdown surge and a record result, higher dividend and buyback (see separate story). But it couldn’t hang on to the gains and it closed up just 0.8%.


It has Mitre 10 hardware and Home Timber as major plays (and rivals to Bunnings) on the home renovation boom as well.


Many of the share price rises and falls were a bit of a kneejerk reaction as they are trying to anticipate benefits from a situation that remains fluid and volatile.


Investors in many retail and internet stocks have been down this route a couple of times in the past year and know that the gains can’t be, or won’t be sustained – the boom and bust in the Kogan share price explains that.


But that the stricken travel and tourism companies face months of continuing pain as the chances of a border re-opening moves deeper into calendar 2022.


Gains for the market’s biggest companies – BHP, Rio Tinto and Fortescue (1% or less) Commonwealth Bank, and CSL (up 1,1%) — helped even the ledger. But shares in Westpac, ANZ and NAB fell.


The CBA rose 0.6% on yet more silly speculation that it could do a share buyback when it will almost certainly pay a higher final dividend for the financial year ending tomorrow, June 30.


Afterpay shares fell more than 7% on concerns about growing competition – the company with its buy now pay later product was a star of the 2020 lockdowns and switch in retail spending patterns.


It is interesting it wasn’t on the big price rise list yesterday.



from our own sharecafe!!

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Williams sees Australia as caught between what are effectively COVID-19 eradication strategies in most states and a painfully slow vaccination rollout program. He says that until vaccination levels rise, there can be no national debate about moving towards a model like Singapore is now favouring, where high vaccination rates allow COVID-19 to be treated like a bad flu.





“I think the days of panicking are over. The major shock of COVID hitting the economy has come and gone,” Fergie says. “I think most investors, myself included, just say you’ve got to look through it.”



Vaccination rates are now the number one thing on the market’s mind. Such is America’s success on this front, a Citi survey of US investors showed just 7 per cent rate COVID-19 as a major market worry.




JUST ONE OF THE FUDIES!! need to see how asx200 moves next few days!!

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and a summary of what 2020 brought us



The ASX 200 rose 24% in the year to June, while the All Ordinaries was up by more, some 26.4% and the most since 1987.


On Wednesday 30 June, the ASX 200 closed at 7,313 points, a gain of 0.2% (11 points) after being up as much as 0.9% earlier in the session.

The ASX 200 peaked in mid June at 7,406.2 (June 16) and rose above $2 trillion for the first time.

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Healthy people = healthy economy


Snap lockdowns work


the Sydney lockdown should have started a few days earlier when the flow of new cases was lower, but starting at around 20-30 a day was still relatively low compared to last July when the Melbourne hotspot lockdown started when new cases were already spiralling over 60 a day or the over 600 a day when the full Victorian lockdown started in August. This should provide some confidence this lockdown will work in controlling the spread of new cases and can be limited to two weeks or so. See the next chart which puts it into perspective.


Border confusion


Everyone wants freedom to travel out of Australia and back in, and an open international border is key to having a dynamic economy long-term, but its short-term importance to the recovery is exaggerated. First,


Covid is not over globally – but vaccines work


Implications for investors

There are several implications for investors:


First, the ongoing threat posed by coronavirus and lockdowns will likely keep the RBA relatively dovish at its July meeting. While we expect it to stick to the April 2024 bond for its yield target and announce some tapering of its bond buying, it’s likely to reiterate that rate hikes remain a long way off.


Second, the threat from coronavirus setbacks is likely to limit the upside in bond yields in the short term.


Third, coronavirus setbacks are another potential trigger for a near term correction in shares and in cyclical stocks specifically. But if snap lockdowns remain relatively short as we expect, they are unlikely to de-rail the Australian economic recovery or the rising trend in Australian shares.




from our own sharecafe!!

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FOMC minutes: More details from the Fed, but no more clarity


“Although inflation had risen more than anticipated, the increase was seen as largely reflecting temporary factors, and participants expected inflation to decline toward the Committee’s 2 percent longer-run objective.”

“Participants generally judged that, as a matter of prudent planning, it was important to be well positioned to reduce the pace of asset purchases, if appropriate, in response to unexpected economic developments, including faster-than-anticipated progress toward the Committee’s goals or the emergence of risks that could impede the attainment of the Committee’s goals.”

“In coming meetings, participants agreed to continue assessing the economy’s progress toward the Committee’s goals and to begin to discuss their plans for adjusting the path and composition of asset purchases. In addition, participants reiterated their intention to provide notice well in advance of an announcement to reduce the pace of purchases.”

“Various participants mentioned that they expected the conditions for beginning to reduce the pace of asset purchases to be met somewhat earlier than they had anticipated at previous meetings in light of incoming data.”

“Participants noted that overall financial conditions remained highly accommodative, in part reflecting the stance of monetary policy, which continued to deliver appropriate support to the economy. Several participants highlighted, however, that low interest rates were contributing to elevated house prices and that valuation pressures in housing markets might pose financial stability risks.”

For those not well-versed in deciphering Fedspeak, the central bank is essentially maintaining the high-level view that inflation is transitory and there is not yet any strong pressure to remove stimulus, but below the surface, some FOMC policymakers are starting to question whether the risks of QE and low interest rates may be starting to outweigh the benefits.



not sure of you guys,

to me FED's policy still too loose .it's just me though!!

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ASX futures down 51 points or -0.7% to 7204



  • ... AUD down 0.7% to 74.32 US cents
  • .... Bitcoin on bitstamp.net $US32,815.60
  • .... On Wall St: Dow -1% ; S&P 500-0.8% ; Nasdaq -0.6%
  • .... In Europe: Stoxx 50 -2.1% ; FTSE -1.7% ; DAX -1.7% ; CAC -2%
  • .... In New York: BHP -0.9% ; Rio -2.1% ; Atlassian -0.6%
  • .... Spot gold down 0.2% to $US1,799.46 an ounce
  • .... Brent crude +0.6% to $US73.89 a barrel
  • .... US oil +0.6% to $US72.67 a barrel
  • .... Iron ore down 1.9% to $US218.04 a tonne
  • .... 2 year yield: US 0.19% ; Australia 0.09%
  • .... 5 year yield: US 0.74% ; Australia 0.72%
  • .... 10 year yield: US 1.29% ; Australia 1.31% ; Germany -0.31%
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Three behavioural themes ... have deeply conditioned investors: TINA, or there is no alternative to stocks with yields so very low; BTD, buy the dip as the liquidity wave continues; and FOMO, fear of missing out on yet another move up in stocks.


While the most probable outcome in the short term, this should not preclude forward-looking analyses of two associated risks. The first relates to so called de-grossing"... that is, simultaneous reductions in risk taking positions led by those have bet on an improving economy with the reflation trade. That would involve cutting overweight positions in risky stocks and underweight exposures in risk free government bonds, the result of which would be adverse contagion for a bigger set of financial assets.


The other, more worrisome possible future extension of recent events is that the economy and the financial system may have already experienced too much of a good thing. With the Fed already behind on inflation and with supply side problems proving more persistent, there is growing concern that the more the central bank waits to taper its $US120 billion ($160.4 billion) of monthly bond purchases the more likely it will be forced into slamming the policy brakes on at some point.


In the meantime, speculative excesses would have built up further, more resources would have been misallocated across the economy, and more unsustainable debt would have been incurred....


Mohammed El Arian

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From a Value Investor , and probably finding it as hard to figure it out as the rest of us....

Every time either an investor (or a central bank) chooses to purchase an investment, another investor is agreeing to turn the proceeds into cash. When markets are flooded with cash at unappealing yields, the price at which investors are happy to turn an investment in bonds, shares, real estate or bitcoins back into cash rises. The same is true in reverse on the way down.

this is in a ShareCafe article

When Will the Music Stop? By Martin Conlon



.... June and early July saw several proposed acquisitions/price reactions which in most market conditions would be seen as madness. In technology, Altium refused a takeover bid of around US$3.9bn from US peer Autodesk. The company announced expected revenues of between US$190 to US$195m and EBITDA margins a little below 40%. At 20 times revenue and 50 times EBITDA on already very high margins, it is fair to say the cash payback Autodesk is expecting will be a little longer than that for Glencore.

Assuming, as management do, the future is extremely bright and market dominance awaits, allowing revenue to double and margins to be at least maintained, the price may reduce to only 25 times EBITDA once achieved. A handsome return of 4% will then be available should this profitability be maintained in perpetuity. Whether Altium is a quality company (a term increasingly used by investors to justify paying exorbitant prices) is not the key issue. It is the inherent uncertainty of the distant future and the extremely limited protection which these prices offer against the chance it is not as rosy as projection....
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2Q 2021 Market Letter


In the spirit of Justice Oliver Wendell Holmes’ remark that people need to be reminded more often than they need to be instructed, this is a reminder that my quarterly missives are called market commentaries and not market outlooks. I don’t have an outlook on the market as I think it more useful to try and understand what is going on than to try to predict what is going to happen. The future is about probabilities and the current situation is about facts and interpretations. No one has privileged access to the future and market forecasts tend to be about as accurate as calling a coin toss. There are, of course, analogies that can be drawn about how the current environment maps onto previous historical data, but success in that depends crucially on how the future will, in fact, resemble the past, and whether the cited analogies turn out to be the governing ones. The record seems to show that sometimes they will and sometimes they won’t and we are back at the coin toss.


None of this appears to have any impact or influence on people’s unending attempts to forecast the markets. As I was gathering some material today for this market letter, I came across this headline in a well-known business publication: “Michael Burry, Jeremy Grantham, and other top investors are predicting an epic market crash. Here are their gravest warnings so far. Jeffrey Gundlach, Leon Cooperman, and Stanley Druckenmiller expect a downturn too.” Without quoting every one of the eight investors’ views, here is a typical cross section: “greatest speculative bubble of all time” (Burry); “fully fledged epic bubble” (Grantham); saying the market was “anything other than very over-valued versus history is just to be ignorant of all the metrics valuation” (Gundlach). “I have no doubt that we are in a raging mania in all assets” (Druckenmiller). Then Stan added, “I also have no doubt that I don’t have a clue when that’s gonna end.” He pointed out that “I knew we were in a raging mania in mid ’99, but it kept going on, and if you shorted the tech stocks in mid ’99, you were out of business by the end of the year.” The others quoted in the story mostly did not appear to share Stan’s cautiousness about the risks of actually acting on predictions of a dramatic decline in stocks. I recall George Soros saying in 2008 that he had predicted that financial crisis. He then wryly noted that he had predicted many financial crises over his career that never materialized.


The always insightful Anatole Kaletsky of Gavekal wrote a piece a few days ago titled ‘’A Killer Wave in the Nasdaq Bubble?” He noted that he agreed that “many technology stocks were fundamentally over-valued, while many of the ‘meme stocks’, crypto-currencies and other ‘Covid winners’ will prove fundamentally worthless.” He correctly pointed out the critical issue from an investor’s decision about what to do:


“There is… nothing inconsistent about expecting further big gains in asset prices that are already fundamentally overvalued. This should be obvious to anyone who experienced the 1989 Japanese bubble, the 1999 dot-com bubble and the credit bubble of 2008.”


I would add the 1987 US stock bubble as well.


What is a bit curious about the bears predicting an “epic market crash” is that we had one only 15 months ago. The market went down the most in history in a 4-week period ending on March 23rd due to the panic over Covid-19 before beginning the remarkable recovery we are currently experiencing. Current consensus estimates for growth are around 7%, the fastest in over 30 years. Earnings estimates likewise are being raised dramatically. Household net worth has grown the most in history in the past year. Home prices rose 14.6% in the most recent reading and housing continues to be in short supply. Real interest rates are negative and 10-year treasuries have been declining and offer the prospect of almost certain real loss of capital. The point of most contention is the outlook for inflation. Since I am not in the forecasting business, I don’t have a view. I do observe that prices across a broad sweep of the economy are rising the fastest in decades, but we are already seeing sharp declines in some of the more sensitive commodities such as lumber. It looks like headline inflation this year is on track to hit 5% or more. It is important to realize that it is already well discounted. If inflation is going to be a problem, prices will have to continue to rise over the next few years at well over the Federal Reserve’s average 2% target. The bond market is forecasting longer-term inflation of around that target. A Goldilocks scenario if it comes to pass.


Inflation has been too low (as the Fed sees it) for long enough that most investors have forgotten the 1970’s and early 1980’s when it was a major problem. It is perhaps ironic that 50 years ago President Nixon took the US off the gold standard. During the post-war period through 1971 global banking crises were few. Since going to a system of floating exchange rates there have been many. Bitcoin was born out of the 2008 crisis and was designed to be free of government control and manipulation, to be the ultimate in an inflation proof asset. It is an open question if it will be an enduring store of value, with many strong opinions on both sides.


A recent study of inflation forecasts by economists, consumers, and the bond market found no significant ability to make value added predictions. “As far as major shifts inflation go, we are all in the dark, just as we are essentially clueless about where the stock market is heading or the price of oil in 2022, or the date of the next recession,” as The New York Times put it.


The worries that one reads about regularly in the press and in research reports are already priced into the market commensurate with the market’s assessment of their probability. The market looks broadly fairly valued to me, with most stocks priced to provide a market rate of return plus or minus a few percent. There does appear to be considerable optimism among individual investors about their expected returns from stocks. A recent study by Natixis Investment Managers found that US investors think they can earn 17.5% above inflation per year for the next 10 years. Over the past 10 years, of all stocks and ETFs that existed over that period only 14% of them did that well and 22% lost money. Taking the under on that bet seems pretty safe.


There are pockets of what look like appreciable over-valuation and pockets of significant undervaluation in the US market, in my opinion. We can find plenty of names to fill our portfolios and so remain fully invested.



bit of long wind, but it touched a lot of important things...like market bubbles , Cryptos ....eg

because of lockdownm so i had so much times to kill, that is why i took my time to read this. the out come is ------IT WORTH YOUR 5 MINUTES, IF YOU ARE IN THE MARKET! IMHO

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  • 2 weeks later...

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq rallied strongly off 50-DMA support early this week before gapping back to new all-time highs on Friday. Both are now pushing back toward their respective upper channel lines, which are above 4,500 on the S&P 500 and 15,100 on the Nasdaq. Support is again the rising 10- and 21-DMA. The distribution day count declined to four and three, respectively, with no further expiration for two weeks.




Retail, Health Care, and Technology continue to lead, gaining 1-3% each and rallying back to all-time highs. Lagging sectors, including Transportation and Consumer Cyclical, also fared well, rallying ~2% each off 200-DMA support. Conversely, Consumer Staple, Basic Material, and Utility lagged, trading relatively flat for the week. The best performing industry groups this week included Apparel, Restaurants, Auto Parts, Semiconductors, Software, Internet, and Hospitals. The worst performing groups included Beverages, Long-term Care, Containers/Packaging, Banks, and Miners. 54% of S&P 500 stocks are trading above their respective 50-DMA and 86% are trading above their respective 200-DMA, compared with 47% and 86%, respectively, last week. 71% of Nasdaq 100 stocks are trading above their respective 50-DMA, compared with 68% last week.




We maintain a positive view of the overall market with indices back at new highs with declining distribution and a multitude of high-quality growth ideas breaking out to new price highs. Continue to increase risk in high relative strength ideas as they emerge from constructive consolidation ideally in heavy volume. Remain patient with ideas lagging within consolidation and reduce risk in ideas breaking key levels of price or moving average support.




from O'Neil ......

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