Investors go with the flow

US CORPORATE earnings season is giving the US market a much needed lift — the Dow Jones jumped by around 1 per cent on Thursday, well above 25,400 points.

Mixed sentiment globally is providing good opportunities for investors locally.

The RBA’s decision to leave rates on hold and improving sentiment about Australian stocks is seeing more cash move into stocks and further upside is likely for the market in the second half of the year.

The Financials sector has been one of the poorest performing sectors since 2015, but bank stocks won’t go down forever and I believe they will survive reporting season.

That said, as the medium to long-term trends across Australian banks are still mostly down, patience and a good knowledge of trend lines is important for getting your timing into these stocks right. Commonwealth Bank and Bendigo and Adelaide Bank look interesting.

It’s the Materials and Energy sectors that offer the best opportunities in 2018. Both have performed well in the previous quarter to June 30 and further upside is afoot this year for stocks like BHP Billiton, OZL Minerals and Monadelphous.

Telstra dominates the Telecommunications sector and this business has struggled for three years. After speaking with many Telstra customers, the issue can no longer be blamed on the NBN. Telstra’s decision to cut 8000 jobs and news of the new T22 Strategy hasn’t aided the stock price, which is trading at seven-year lows. DALE GILLHAM IS CHIEF ANALYST AT WEALTH WITHIN.