The latest market news, commentary and strategy by Adrian Rowney
5 Things that Grabbed my Attention
1. First Citizens Bank took over the failed Silicon Valley Bank (SVB) for $500 million...The US government is taking a $20bn hit in the deal....Last year SVB had a market cap of close to US$40bn.
2. Cobalt is needed to make EVs....According to STATISTA - 70% of the world's cobalt supply comes from the Democratic Republic of Congo.
At some stage (within 10 years) I wouldn't be surprised to see society take a hard pivot against EVs; Toyota appears to be the only global auto properly prepared for this scenario.
Locals barely escape from being buried alive at a Chinese cobalt mine in DR Congo, the entrance of which got sealed off in a landslide. Such accidents are common at Chinese run mines in Africa.— AnilVohra1962 🇬🇧🇨🇦🇺🇸 (@AnilVohra1962) March 25, 2023
3. Goldmans are saying that COPPER inventories could be depleted by August if current trends continue....Now I am always skeptical of GOLDMANS and the information they release, but I can concur there is bugger all available metal on the exchanges.
4. China increased its rare earths quota by 20% due to strong demand....The big pullback in Lynas (LYC) is a BUY
5. The board of Invocare (IVC) has formally rejected the takeover bid from US private equity firm - TPG....I see a strong set of fundamentals behind IVC, so it is the right call.
ASX Market Update
ASX 200 up 6 points to 6962
Our market finished basically FLAT for the session; bit of a snooze fest as there were no major movers in the top 200. NCM put on 1%, WIRE dipped 1% and IPL added 1.26%.
The Day Ahead
- Our SPI is up 29 points
- Bitcoin down 2.8% to $27,083
Movements affecting our resource stocks today (USD)
- BHP in the US up 0.5%
- Gold down 1.3% to $1958
- Paper Silver down 0.5% to $23.22
- Platinum down down 0.5% to $978
- Copper up 0.45% to $4.09
- Brent Crude up 4.16% to $78.11
- Iron ore up 0.5% to $118.15
Asian Market Update
Japan up 0.33%, China added 0.12% and Hong Kong fell 1.75%
Read this very interesting thread on APPLE and China.....Little wonder Tim Cook has paid them a visit.
CEO Tim Cook on why Apple still chooses China over many other countries to make its products:
"There's a confusion about China.
The popular conception is that companies come to China because of low labor cost.
I'm not sure what part of China they go to (cont.)
— 倪明达 (Ni Mingda) (@NiMingda_GG) March 26, 2023
Global Market Update
DOW up 194 points to 32,432
US stocks rose as traders became more comfortable with the banking system....I think this optimism will be short lived.
Brits up 0.9%, Germans added 1.14%, Frenchies put on 0.9%
Germany came to a grinding halt yesterday as transport workers went on strike across the country - they want a pay rise....Negative real wage growth means people can't live the way they used to.
Key Market Summary