SIV, US & Australia Reporting Seasons

by Raymond Chan

SIV – new rule
In the month of July, Latte with Ray is pleased to be interviewed by The Australian. The topic was on SIV (Significant Investor Visa). The SIV programme is a pathway to provide for significant migrant investment into Australia under the Business Innovation and Investment visa programme. Since inception, over 90% of SIV applicants are from China with over A$3.7 billion being invested in Complying Investments.
US reporting seasons – how did the first week go?

Back to the stock market, we last week saw S&P 500 touching the 50-moving average and moving towards our fair value of 1,900 points. The breather was however short-lived and within a week the index has bounced back to 2,126. “If” our fair value is correct, the downside risk could be -226 points or -10.6%.

But the market will require a reason for selloff - could it be 1) Greece, 2) Fed rate hikes or 3) China slowdown?

Having said that, the lack of price correction in US stock markets may also mean the consensus is too bearish for US 2Q earnings. According to Factset, the US market has been running ahead of earning expectation.

In the first week of US reporting seasons, Factset suggested that there were 61 companies that have reported earnings and 72% of those companies beat earnings forecasts. (So far so good) We will provide you with further updates on US reporting seasons in our August edition. 

Australian Reporting Seasons are fast approaching
On the other hand, ASX 200 is valued at 5,650 points. The index corrected -10% from peak to trough. The duration of correction were a bit long (almost 50 days!).
In June edition, we suggested to take market weakness to top up CBA and LLC. The market has since bounced back from recent low and again reached the fair value level. We expect the market to trade sideways going into the reporting seasons over next few weeks.
General Advice Warning - The information provided here is general advice only. It has been prepared without taking into account any person's individual objectives, financial situation or needs.


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