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The Good Morning Report – 24th May 2023

Posted on May 24, 2023

The latest market news, commentary and strategy by Adrian Rowney 

5 Things that Grabbed my Attention

1. The great SILVER drain is picking up pace....Yesterday saw the largest ever one day withdraw from the Shanghai Futures Exchange (SHFE) - 15% of physical bullion has been stripped in the past week alone....Judging by the price action of SILVER lately you would think inventories are piling up....The stage is set for the mother of all squeezes (it's decades in the making).

2. I would say just about every single CEO of a major corporate is currently looking at ways to incorporate AI to increase productivity and cut costs.

3. JP Morgan CEO, Jamie Dimon is predicting more rate hikes in the US.

4. For the past couple of years Santos (STO) has been stuck in a trading range - sort of between $6.50 and $7.50....So I think it has been building a nice base to launch off - I am calling $10+ for the stock this year. We are due!! BUY

5. Bain Capital is looking to float Virgin Australia in November.......Virgin went bust and delisted from the ASX on the 17th of November 2020 - shareholders lost the lot.

ASX Market Update

ASX 200 down 3 points to 7259

Another sleepy sort of a day on the ASX as traders take the wait and see approach with the US debt ceiling negotiations still ongoing. New Hope (NHC) was one of the better performers as the market came to realize its quarterly report was pretty darn solid. NHC closed 3.5% higher....Elsewhere Sonic Healthcare (SHL) fell 3% after UBS initiated coverage with a SELL recommendation and a $31 target - their negative recommendation doesn't phase me one bit as I struggle to see SHL, which is a world leader in laboratory medicine / pathology, radiology and primary care medical services, not being busy for years to come. SHL is a BUY in my book; last sale $35.17

Random Observation

If you are confused about the debt ceiling in the US then this may give you some clarity...

 

The Day Ahead

  • Our SPI is down 29 points
  • Bitcoin up 1% to $27,172

Movements affecting our resource stocks today (USD)

  • BHP in the US down 1.7%
  • Newmont down 1.7%
  • Gold FLAT @ $1976
  • Paper Silver down 1.24% to $23.65
  • Platinum down 1.76% to $1058
  • Copper down 1.1% to 3.64
  • Brent Crude up 1.3% to $76.98
  • Iron ore down 2.3% to $106

Asian Market Update

Japan down 0.42%, Hong Kong off 0.42%, China fell 1.5%

The XI Man wants babies, so this would be giving him quite a few headaches...or is AI going to be his long term solution?

Global Market Update

US Market

DOW down 231 points to 33,055

US stocks rolled over as debt ceiling negotiations were halted yet again....All for show.

European Markets

Germans down 0.44%, Brits dipped 0.1% and Frenchies fell 1.3%

Bit of excitement in what would normally be a pretty mundane Shell AGM.....Do these protestors back up their convictions by not using OIL/GAS derived products or are they just spoiled brats?

 

No cheating...answer in tomorrow's report!

Key Market Summary

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Without limiting the generality of the above paragraph no person, persons or organisation should invest monies or take action on the reliance of the material contained in this post, but instead should satisfy themselves independently (whether by expert advice or otherwise) of the appropriateness of any such action. Unless otherwise stated the information presented is not a recommendation to invest in any investments, securities or financial products.

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