Incitec Pivot Ltd T.IPL

What does the balance for 2019 hold

[hawk35]

What does second half of 2019 hold for us?  There are opposing views on this.  One analyst predicts a market melt down and another predicts a market melt up.  (see comments from Globe and Mail below).

The market used to be easily shaken by negative market news (remember the effect Greece debt / default threat had on markets just a few years ago, and Greece was a very small country).

Makes you wonder in this age of Trump if the market just shrugs off bad news now.  Britain is a much bigger country than Greece and brexit is hardly causing a ripple in the marktets.  Anyway it looks like markets will continue to rise. 

Based on market outlook and IPL strengths, holding this stock appears to be the best option.  And the last six trading days have certainly been good to us.  Below is the article from the Globe and Mail today.

Market melt-up’ is now base case scenario: strategist

Citi economist Catherine Mann argued that markets are making too much of the temporary U.S. China trade truce and also notes that Citi does not expect any Federal reserve rate cuts this year.  The latter is a decidedly non-consensus view that implies significant weakness for a market already pricing in help from the central bank,
“The temporary trade truce is vulnerable to further escalation and tariffs on the additional $300bn Chinese imports could be almost ready to go if negotiations fail… Meanwhile, 2020 could be a ‘deal-maker’ year with the US presidential election and US growth set to moderate.

Rates markets continue to price around 75bps of Fed cuts for this year but our US economists expect no cuts. They do see a significant probability of a cut in July but the likelihood is lower with the Trump-Xi ceasefire, while the ISM manufacturing decline is unlikely to alter the Fed’s view but ISM non-manufacturing could call for some ‘insurance’ “


Barclays U.S. equity strategist Maneesh Deshpande is far more bullish than Citi as a “market melt-up” is now his base case for the S&P 500, “After the truce in the U.S.- China trade war post the G20 meeting in Osaka, the “melt-up” scenario we had outlined previously is now our highest probability outcome, leading us to update our 2019 S&P 500 price target to 3000… we believe that the fed will still embark on an easing cycle. The weakness in global manufacturing continues unabated and the subdued inflation and softening inflation expectations will likely prompt some “insurance cuts” from the Fed. Fed fund futures are still pricing in an 80$ probability of one and a 20$ probability of two cuts in July… historically the fed has not surprised the market.”