Optimism is creeping back into the market as Australian investors seem to be getting over their Trump phobia and setting the scene for a positive April trading period.
The All Ordinaries (Index:^AORD) (ASX:XAO) may be struggling to make gains in early trade but it zoomed up 0.8% on Tuesday as it defied a negative lead from Wall Street that has been shaken up by the US president's sabre rattling at China the day before.
But the bromance developing between China's top guy Xi Jinping and the US top dog Donald Trump is giving the market that warm fuzzy feeling last night. Just don't count on it lasting given Trump's dating track record that mimics those used in Married At First Sight!
Let's face it – you know it's time to panic when Trump tweets you'll "always be friends".
Fortunately, the US reporting season that is kicking off this week should be enough to keep the markets trending higher as analysts are expecting pretty positive news. This is in part due to the corporate tax cut in the US and a decent pick-up in economic activity in the world's largest economy.
As long as Trump doesn't say or do anything else to rattle markets (that includes the firing of Special Counsel Robert Mueller who is investing Russian meddling in the US election), our market should get a clear run higher as history is on our side.
According to data from Bell Potter's trading desk guru Richard Coppleson, April is the second best month for the ASX 200 (Index:^AXJO) (ASX:XJO) since the turn of the century with the index gaining 1.6% on average.
I am not counting on the big banks like Commonwealth Bank of Australia (ASX: CBA) and friends to join in the party as they are facing a downgrade cycle (click here to find out why).
But there are a few stocks that I think are poised to run ahead in near-term if the bulls return in force as I am predicting.
I've always liked stocks offering offshore exposure, particularly the US where economic growth is accelerating and is likely to beat Australia. From this perspective, I think BlueScope Steel Limited (ASX: BSL) fits the bill nicely.
It is also regarded as a beneficiary of Trump's steel tariffs and investors have an opportunity to buy the stock given that it has retreated from its eight-year high of $16.33 that it hit at the end of February.
Another stock that I think could outperform this month is Webjet Limited (ASX: WEB). The online travel booking group delivered a stellar first half result in February that resoundingly beat expectations and sparked a run in its share price.
But the recent volatility has triggered a 14% pullback in its share price since March 9 and the current share price presents an attractive entry point for investors.
The third stock that I think will outperform is Worleyparsons Limited (ASX: WOR). The oil & gas engineering group has also retreated from its three-and-a-half year highs hit in late February due to the market shakeup.
I am expecting it to retest its highs given the positive backdrop for the industry with strong oil prices and a growing appetite for energy companies to spend on capex this year.
These aren't the only stocks with a strong outlook. The experts at the Motley Fool are tipping another group of stocks to rally in 2018.
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