Fears of a US and potentially European double dip recession have begun to ease recently, with improved optimism driving the Australian market back to the upper end of its recent range. As we’ve discussed through our previous Market Commentaries, we think the double dip doomsayers overdid it. The Aussie market’s firm fundamentals support a move through 5,000 for the ASX200.

Myer’s 2010 financial result comfortably exceeded its November Prospectus forecasts, despite a weak sales environment. The stellar business performance improvement is now evident and has room for further enhancement. The company has a strong store program that will deliver excellent profit growth in conjunction with the on-going business improvement. Myer’s flagship Melbourne store will be almost completely open by Christmas and will symbolise the substantial turnaround in this iconic company’s fortunes.

Hold CXC, Buy ASB

The retail broadband market is fiercely competitive but no-one has played the game better than TPG Telecom in the last few years. At almost half a million customers, the business is now diversifying its base into more bundled products and more corporate business. The rate of growth will begin to diminish simply due to the law of large numbers, but possibly also due to the renewed pledge from Telstra to chase lost market share.

Australia’s minority government has some big items on its agenda, including resurrecting the debate on how to introduce a carbon tax. The issue is made more complex due to the competing interests of the Green Party and the business lobby.