The Aussie market closed higher on the week, making it four winning weeks from the last five. The ASX 200 hit fresh all-time highs and there were some big stock moves, particularly in the small and mid-cap space. Gentrak (GTK) surged on its full-year results, EML Payments (EML) did the same on a trading update, whilst ProMedicus (PME) added a further 7% on Thursday, to a run that has seen it rally from $82 to $248 in the past year. Incredible. On those results alone, the animal spirits appear not only alive and well, but kicking hard as we turn for the final straight of the year.
So, could anything upset the apple cart? The perma bears will tell you that Trump and his tariffs are a major risk, whilst some US earnings updates, and local earnings sustainability more generally, remain overhangs. I’m not sure they will be heard over the bull’s stampede at the minute, with support for their case stemming from systematic fund strategies, positive seasonality, a resilient macro backdrop, and EPS growth tailwinds into 2025. Ultimately, it’s a good time to be in markets so let’s enjoy it. As we all know, it won’t last forever. Have a great weekend.
One of Australia’s best stock pickers shares what’s at the heart of every great investment
While past performance is not a reliable indicator of future return, Robert Gregory from Glenmore Asset Management would happily stack his performance over the past seven years against just about anyone else in Australia. And while his track record of stock picking is exceptional, no silver bullet, magic formula, or secret herbs and spices have driven it. Rather, Gregory puts it down to intense research, often conducted over months or years, before pulling the trigger. He also understands what lies at the heart of a great investment. In this episode of The Pitch, Gregory shares what that is, along with a little about his journey and the key elements of his process.
J.P. Morgan is bullish on the next 10-15 years. Here’s where it sees the best opportunities
This time last year, the world was bemoaning stagnant inflation and high interest rates. It was also tipping a recession. With a series of rate cuts on the horizon and consumer spending finally dipping, perhaps those predictions will finally come to bear. Or equally, they might not. As long-term investors, you should be investing across cycles – not just for the shorter term, and there’s positive news for investors. J.P. Morgan is remarkably bullish on the growth prospects and opportunities available to investors in its 10–15-year growth outlook. Even 2025 is looking bright. In this wire, I summarise some of the highlights of its report.
Inflation wouldn’t be this low if it weren’t for subsidies
Source: ABS, Westpac Economics, Macrobond
The ABS' Monthly Inflation Indicator revealed this week that electricity prices have fallen by more than 35% over the last 12 months. But, that massive fall is due to state and federal energy rebates. If rebates continue to be dished out, especially with a Federal Election due by next May, then these falls will continue. But if they are discontinued, then electricity bill payers (i.e. everyone) are in line to get a very rude shock. As this Westpac chart shows, had it not been for rebates, electricity prices would have increased 16% since June 2023. That would have pushed up inflation significantly, and in all likelihood, would have sent the RBA cash rate higher as well. Thank goodness for the rebates! (We could talk about how we’re going to end up paying for all these rebates but that’s a conversation for another day.)
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