Australian Budget key players| Jessica Amir on Ausbiz
In anticipation of the release of the Australian Budget and key US inflation data, Aussie shares are set to edge slightly lower. In a recent Ausbiz interview, moomoo Market Strategist Jessica Amir discussed market outlook, budget analysis, and potential investment opportunities in infrastructure, critical minerals, and the green energy industry.
The US market could break history
In the US, the bull market may extend its record run this week, with the S&P500 already up 27% from October and nearing its all-time high. Jessica highlighted factors supporting this potential rise:
The VIX index closed at its lowest level since January 23, 2024.
79% of S&P500 companies trade above their 200-day moving averages, a bullish sign.
The put/call open interest ratio is tilting bullish, indicating more options for S&P500 company stocks to rise.
Strong US company earnings, not seen in a decade, with many companies upgrading their outlooks.
The Australian market seems primed to extend its rally
The Australian share market still underperforms the US, with the ASX200 rising 14.2% from its October low and is only 2.3% away from its all-time high. There is potential for further growth this week, particularly if the US CPI weakens as anticipated and if Australian employment shows signs of weakening.
Industries profiting from the Budget
Jessica emphasizes the importance of tracking macroeconomic trends for investment decisions. She suggests that investors pay attention to the Budget, as it provides insights into sectors with potential growth opportunities.
The first industry to consider is Australian infrastructure contractors and commodity companies, especially with expected boosts in infrastructure spending. Engineering groups like Worley could benefit from this trend.
The budget also highlights critical minerals for the second consecutive time, including rare earths and smaller commodities like graphene. Government support has been directed towards companies such as Alpha HPA(A4N), indicating potential investment opportunities in this sector.
Furthermore, green energy is a promising area to focus on, given the increasing demand surpassing current supply levels. With the AI boom and rising demand from data centers, uranium prices are expected to rise, benefiting stocks and ETFs in the green energy sector.
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