FYI | Jul 01 2010
By Rudi Filapek-Vandyck
The end of financial year 2009/10 has also made investment strategists realise their anticipated share market levels for December this year might have been a little too ambitious. That is one conclusion that can be drawn from an overview in the Australian Financial Review today.
A table showing forecasts for the ASX200 index by June 2011 suggests most strategists have stuck with their estimates between 5000-6000, but with a six month delay.
Deutsche Bank's Tony Brennan continues to “beat” all others in the market with a forecast of 6250 for the index in twelve months from yesterday. JP Morgan's Paul Bunker sits at the bottom of the table with an index not projected to be higher than 5000 only.
Mind you, at today's index levels even JPM's projection would imply the year ahead will be a better one than the year past as the projected return is some 17% ex-dividends while the year past only generated around 15% including dividends.
Most forecasts seem to be in between the 5375-5800 range.
On a shorter term note, Technical analysts at Barclays have released their monthly outlooks for financial assets based upon historical trends and it would seem the outlook for July is but a very mixed picture.
Take equities, for example. Historically, July is a mildly positive month for global equities, but it tends to be the opposite for the two markets Barclays sees as the leaders: Nasdaq and Shanghai. The S&P500 tends to track merely sideways and the analysts only adhere a 50% chance for the index to post a gain this month.
The All Ordinaries has received a peers-beating odds figure of 63% to post a gain this month. This because July tends to be kind to the two commodities that really matter: coper and oil. Silver tends to have a very good month too, clearly leaving behind gold on historical median returns for July.
Barclays' odds for an advance this month again brings up a rather mixed picture. WTI spot and copper top the rest with clearly positive odds for a July advance of 65%. But on the other hand, the CRB index only received odds of 49%.
Spot gold sits at 51% vis-a-vis silver at 58%. The analysts note silver is on a seven year bull streak thus far for the month.
In fixed income, returns exhibit a bullish bias, report the analysts. The US 5s are the only bearish standout with the highest median yield increase. In relative value steepening and tightening are more likely to occur.
