BBOZ Share Price now in Upwards Swing (ASX:BBOZ)

BetaShares Australian Equities Strong Bear Hedge Fund’s [ASX:BBOZ] share price is up 5.37% at time of writing, trading at $8.63.

That’s an increase of 4.5% since we last covered BBOZ at the end of July.

Our hopes of seeing a ‘V-shaped’ recovery could be diminishing.

ASX BBOZ Share Price Chart - Beta Shares Bear Fund

Taking a look at the chart, the moving averages are now giving a crossover signal.

Meaning the BBOZ share price could be gathering upwards momentum.

No recovery by Christmas

With one of Australia’s two commerce centres (Melbourne) completely shuttered, the economy could be entering dire straits.

Australia’s GDP fell by 7% in the June quarter, ushering in an economic depression not seen since the 1930s.

Here is Australia’s economic growth rates since 2012:

Australia Economic Growth Rates Chart - BBOZ

Source: ABS

And here are Australia’s largest economic recessions:

Australian Recession GDP Historic Chart

Source: ABC News

So, one can understand why investor sentiment could be waning in the Australian stock market.

And why bear market ETFs like BBOZ could be trending upwards gain.

Indeed, the likelihood of a recovery by Christmas is looking bleak.

Back in June, Boston Consulting Group forecast that half the jobs lost due to COVID-19 restrictions could be reinstated by Christmas.

Australian Bureau of Statistics data showed that about 950,000 jobs were lost in the seven weeks from 14 March to 2 May.

The Australian Treasury estimated that 850,000 jobs could be reinstated by as early as July when stage three restrictions are expected to be lifted.

Though the most recent ABS data estimates that unemployment actually grew by another 15,700 from June to July.

Look at what’s on the horizon

Before you dismiss this as hyperbolic naysaying, consider this:

Australian’s are eager to get the economy going again, and we’re in a great position to do so —  even if some do not realise it.

Australian Consumer Sentiment Index

Source: Westpac

According to Westpac, consumer sentiment received an 18% bump this month.

A stark turnaround from last month’s 9.5% drop.

Meaning Australians are feeling more optimistic about the economy.

So why isn’t this reflected in the stock market?

There are a multitude of factors at play here.

A large one being the ocean of money currently being pumped into the economy at an unprecedented rate.

Which some are betting will be the cause of the next market crash.

Another of them could be that many Australian’s are being hamstrung in their efforts to participate in the economy.

Victorian’s are helpless to get back to work.

And in many other states, Australian’s are only being drip-fed the freedoms they used to have.

In my books, the balancing act is beginning to come undone.

Market expert Vern Gowdie shares a similar sentiment. Find out where the Australian economy could be heading in the ‘post-COVID’ world in Vern’s latest report, and what you can do to protect your wealth during this current phase of the crisis. Download your free copies of these great resources here and here.

Kind regards,

Lachlann Tierney

The Rum Rebellion

Lachlann Tierney is a writer for The Rum Rebellion and has been investing for nearly a decade. With a Masters of Science from the London School of Economics, he brings a sound understanding of global markets to his writing. Lachlann is interested in emerging technologies, energy solutions and helping people invest their money wisely. 

The Rum Rebellion