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The Good Morning Report -16th June

Posted on June 16, 2023

The latest market news, commentary and strategy by Adrian Rowney 

5 Things that Grabbed my Attention

1. Our Cuzzy Bros across the ditch have entered a recession.

2. Steady stream of profit downgrades continue....Yesterday chemical manufacturer and distributor DGL group lowered guidance as operating costs hit margins.

3. IAG is increasing home contents insurance premiums by 20% and car by 14%....Middle class Aussies getting squeezed all over the shop.

4. China's central bank CUT interest rates by 0.1% in an attempt to boost the economy.

5. I get the feeling COAL stocks have completed their pullback and are about to takeoff.....BUY WHC, YAL, SMR,NHC & CRN - owning a bit of each is the way to go.

ASX Market Update

ASX up 13 points to 7175

It is becoming clear we are in a downgrade cycle as inflation chews up company margins. DGL Group (DGL) was the latest to issue a warning - fortunately we don't have any as the stock fell 17% to a fresh all time low and is now down 66% over the past 12 months. DGL is probably in the buy zone now, but as they have made a stack of acquisitions over the past few years there could easily be more nasty surprises, so I'll let it go through to the keepers for the time being.

 

Random Observation

More and more Aussies are trying to keep their heads above water....947K now have multiple jobs.

 

The Day Ahead

  • Our SPI is up 29 points
  • Bitcoin down 0.5% to $25,409

Movements affecting our resource stocks today (USD)

  • BHP in the US up 2%
  • Newmont up 1.4%
  • Gold FLAT @ $1970
  • Paper Silver down 0.66% to $23.94
  • Platinum up 1.3% to $933
  • Copper up 0.54% to $3.89
  • Brent Crude up 3.28% to $75.60
  • Iron ore up 0.8% to $113.30

Asian Market Update

Japan FLAT, China up 0.74% and Hong Kong jumped 2.17%

This is BULLISH for OIL....Looks like Xi Man plans on building up strategic reserves for the future....Smart, so, so smart.....Energy security is pretty much priority number one for him - but for us in the WEST, drag queen story time ranks higher! (don't laugh, I'm serious)

Global Market Update

US Market

DOW up 428 points to 34,408

Retail investors are pouring into large cap US stocks while at the same time I am seeing reports of founders and insiders SELLING decent chunks...A Nvidia director dumped $55mil worth and the family members behind Walmart collectively tipped out $400 mil.  

European Markets

Brits up 0.34%, Germans down 0.13% and Frenchies fell 0.51%

As widely expected the ECB increased rates by 25 basis points or 0.25% to 3.5%.

Key Market Summary

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