The latest market news, commentary and strategy by Adrian Rowney
5 Things that Grabbed my Attention
1. S&P has downgraded multiple U.S. banks citing 'tough' operating conditions...more bank failures are coming.
2. BHP annual profit dropped by 37% to US$13.4bn - weaker commodity prices and rising costs (labour, diesel and electricity prices) was the reason ....The market was already expecting a big fall in profits which is why the stock only dipped 0.7%.
3. India has slapped a 40% tax on onion exports; protectionism is inflationary.
4. John McGrath is seeing signs of distressed property selling in the lower end of the market but thinks high end will be immune to the weakness as buyers tend to pay with cash.
5. US financial services giant - Charles Schwab is sacking staff and closing a bunch of offices....preparing for something?
ASX Market Update
ASX 200 up 6 points to 7121
Coles (COL) shares fell 7% to $16.02 despite posting a very solid NPAT of $1.1 billion - up 4.8%. You see the market wasn't impressed that the supermarket giant was experiencing some cost blowouts at the new distribution centers they are building. I see the dip as an opportunity to BUY.
COL is a sleep easy at night kind of stock. If we get a credit event that shakes the market to the core, I know COL will do just fine because people have got to eat. Plus with the Aussie population growing thanks to immigration, we will keep seeing steady increases in sales. BUY
The Day Ahead
- Our SPI is down 23 points
- Bitcoin down 1% to $25,800
Movements affecting our resource stocks today (USD)
- BHP in the US down 1.56%
- Newmont up 0.92%
- Gold up 0.17% to $1926
- Paper Silver up 0.54% to $23.46
- Platinum up 1.38% to $926
- Copper up 1% to $3.75
- Brent Crude down 0.59% to $83.96
- Iron ore up 3% to $110.65
Asian Market Update
Japan up 0.92%, China up 0.88% and Hong Kong put on 0.95%
Xi Man touched down in South Africa for the 15th annual BRICS summit....Top of the list discussions will be de-dollarization and other countries joining the trading bloc.....There was a bit of hype that a new GOLD backed BRICS currency would be established, however India threw a huge bucket of cold water on that idea a few weeks ago.....The trend of BRICS to invest reserves in GOLD rather than US treasury bonds will continue - so GOLD will play an all important role in this new financial era, but whether they talk about GOLD at this summit remains to be seen. As these nations are aggressively accumulating from the WEST, it wouldn't make any sense for them to talk up GOLD just yet.
Global Market Update
DOW down 174 points to 34,288
Banks/financial services were on the nose after S&P downgraded a bunch of companies....It is this simple : the financial system is not going to cope with higher interest rates.
Germans up 0.66%, Brits added 0.18% and Frenchies put on 0.59%
Another positive session for European stocks, but on the economic front the news wasn't good as UK manufacturing experienced a sharp drop....Xi Man would be licking his chops as Europe de-industrializes due to their self inflicted energy crisis/made up climate change.
Key Market Summary