The Good Morning Report – 23rd Jan

1. AirBus Albo has ordered a cost of living crisis meeting (aka all expenses paid shindig) with his army of nation destroying MPs…..The only way to bring down inflation is to take an axe to government spending and spike interest rates – so that won’t be happening as it will decimate the economy….Giving out “FREE” stuff will only add to the problem.

2. Containerized Freight Index keeps going up on the chaos in the RED SEA….While OIL increased a little last night, I am surprised prices are not yet significantly higher – probably just a matter of time.

3. Wall Street bucketed the plebs into their BITCOIN ETFS on the ding dong high of $49K. The price has since tanked 18%….What a pump n’ dump they pulled off.

4. The disintegration of Aussie AI company Appen (APX) continues after losing it’s contract with GOOGLE which accounted for around 30% of revenues. Over the years I have put out many warnings to AVOID investing in this company. Incredible that it once traded at $35 in August 2020. APX crashed another 40% to close at 28c.

5. Last quarter Yan Coal (YAL) increased its cash balance by $477 mil to $1.4bn. It’s a picture of strength….Big dividends should keep flowing for shareholders. BUY

ASX 200 up 55 points to 7476

Lithium miners got smashed again as sentiment in the sector deteriorates. Liontown Resources (LTR) was the worst after tanking 21%. It’s turning out to be survival of the fittest again and the bubble has well and truly burst….A couple of things I see going on:

EVs are not working well in the bitter Northern Hemisphere winter. (Kind of funny that some bought them to stop the weather getting hotter)

-According to Hertz, maintenance costs are far higher (being 450kg heavier than normal cars – so plenty of problems occur with suspension, tires wearing out, breaks, steering, insurance etc)

Trump is openly mocking EVs at his presidential campaign rallies. If he wins in November, there will likely be a large pivot back to ICE (Internal Combustion Engine) in the US and across the world.

-Resale market for EVs is in sharp decline. Existing owners will be in for a rude shock one day.

-Public is beginning to work out there is nothing environmentally friendly about EVs.

-Very inconvenient due to lack of charging infrastructure and electricity grids are not powerful enough to cope with mass adoption.

On the bullish side, lithium mining supply is likely to take a big hit as future projects get mothballed and some existing mines get put on care and maintenance.

So at the end of the day we really have to work out whether governments are going to give up on future mandates for these things or they are full steam ahead? Because in a free market, EVs fail miserably on just about every metric.

Eric Sprott is considered one of the greatest junior mining investors of all time, so this shows just how incredibly tough this sector has been….

  • SPI is down 11 points
  • Bitcoin down 4% to $40,046
  • BHP in US down 0.67%
  • Newmont in US up 1.55%
  • Rio in London down 2%

Movements affecting our resource stocks today (USD)

  • Gold down 0.35% to $2021
  • Paper Silver down 2.3% to $22.17
  • Platinum down 0.6% to $901
  • Copper down 1% to $3.74
  • Brent Crude up 1.8% to $79.91
  • Iron ore down 0.8% to $128.85

Japan up 1.62%, China fell 2.68% and Hong Kong fell 2.27%

The Hang Seng (Hong Kong market) rolled over again as the grizzly BEAR market keeps taking victims. It has now fallen below 15,000 points to a level seen back in 1997. Kind of incredible considering markets in the WEST are hitting fresh all time highs.

“Hey Adran…. Zhang in big, big trouble, I’m buy lot of Hang Seng future at 18 thousand point and keep average down, now HSBC stop me out and account go large negative, reave brack hole. I say HSBC gimme credit, but they say no, no, no, you pay or else….Prease HELP…PREEEASE!!”

DOW up 158 points to 37,604 (half hour to go)

The DOW and S&P 500 hit fresh record highs as investors scramble to get into stocks while the US government keeps up it’s rapid deficit spending.

Germans up 0.77%, Brits added 0.35% and Frenchies put on 0.56%

The German stock market once again hit an all time high, despite the deindustrialization going on and it’s tanking property market.

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