Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market delivered fourth straight positive day on the back of global optimism that China is taking the right steps forwards. We turned cautiously positive when the market opened up with a big sell on Tuesday and the market fell to long term fair value. This valuation support level has held for the past 3 years and we see no reason why it will fail now. Then PBOC removed support for the Shangbang and delivered stimulus for the local economy on Wednesday. Then PBOC followed it up with more cash injection to improve liquidity and reduce borrowing costs. Shangbang popped up 5% yesterday in the last 30min…and today it’s up nearly 5%...DON’T FIGHT THE PBOC!!! The market is now showing value and the risk/return points to buying time…quality yield stocks in low growth outlook will deliver over time…global investor pain can be local investor gain…stay nimble…momentum building, fear subsiding and FOMO is inevitable!!! US and European markets are likely to take some profit as the weekend looms, but the downtrend is broken. (VIEW LINK)