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Where is the sharemarket going?

- June 1, 2020 2 MIN READ

Another big on the the Australian sharemarket. But the big question is have we beaten the virus when it comes to markets?

Angus Geddes from Fat Prophets has analysed the bounce back in equities since March.

Angus says there are a few catalysts that are cause for concern in terms of U.S-China tensions and still a lot of weak economic data coming out that gives rise to further uncertainty.

“The market has had this huge run since the lows of March without really a pause leads us to think there is going to be a correction at some point.

“What we’ve seen of course is a big rotation of the growth stocks back into the value stocks which is why banks are up today.

Angus said Fat Prophets are looking for a V-shaped recovery and think markets will be a lot higher by the end of the year.

Stock of the Week… CSL Ltd

Australia’s premiere blue-chip stock, CSL is regarded by the investment community as one of the best businesses on the Australian Stock Exchange. The biotech is a dominant player in manufacturing blood plasma along with growing its Seqirus vaccine business.

I asked our analysts on The Call (part of the Ausbiz streaming services), Rudi Filipek-Vandyck from FNArena and Claude Walker from A Rich Life, why the share price had fallen over the last week in contrast to the broader market. An unashamed CSL fan, Rudi who has been quizzed by fund mangers and investors before the open today provided his view.

“The secret so to speak is quite straight forward.

To keep this market going, the market attention is shifting to the stocks that haven’t performed well.”

Rudi said you take the opportunities to add CSL to a portfolio when there has been a pullback.

“If CSL is not the best large cap stock we have then I can’t think of a better one.”

Claude said he “struggles to get confident in CSL at the moment given its high valuation but couldn’t resist buying some shares yesterday when it dropped quite a bit.”

“I’ve had so much pain watching this stock go up for so long since I sold it that I thought I’d just buy some to make sure I am paying attention if it ever goes to a point where I consider it really good value.”