The Good Morning Report

The latest market news, commentary and strategy by Adrian Rowney 

5 Things that Grabbed my Attention

1. Chinese manufacturing PMI recorded the strongest increase since April 2012....very bullish for commodities.

2. US embassy is urging its citizens in South Africa to stock up on food, water and medicines.....SA is responsible for most of the world's PLATINUM supply - the precious metal should be rocketing as the country falls to bits.  BUY

3.  Giant automaker Stellantis  (owner of Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep, Maserati, Ram) is investing $155 million in a copper mine located in Argentina is order to secure future supplies...Got copper??

4. Jim Chalmers has blocked a Chinese fund from increasing its stake in a rare earths hopeful, Northern Minerals (NTU)....Iluka (ILU) has bankrolled NTU via a $15mil convertible note and a $5mil placement. I have a BUY on ILU while I would rate NTU as a SPECULATIVE BUY. 

5. After the fall in Harvey Norman (HVN) shares, Gerry Harvey told the AFR this: "My advice to you is sell your house, sell your boat, sell your car, put the lot into Harvey Norman and then ring me in three or four years, and you won't need to be a journalist any more".....Classic!!

ASX Market Update

ASX 200 down 6.8 points to 7251

Our market finished basically FLAT for the session as money rotated out of the BANKS and directly into RESOURCES - it was all on the back of the very strong CHINESE manufacturing data....NAB & WBC fell 2% while RIO put on 2.48% and BHP added 2.26%. 

Random Observation

 

China has now overtaken Germany and has left the USA in the dust...

The Day Ahead

  • Our SPI is down 5 points
  • Bitcoin up 0.8% to $23,673

Movements affecting our resource stocks today (USD)

  • BHP in the US was up 3.9%
  • Gold up 0.5% to $1845
  • Paper Silver up 0.23% to $21.25
  • Copper up 1.6% to $4.16
  • Brent Crude up 0.7% to $84.04
  • Iron ore up 2.2% to $126.05

Asian Market Update

Hong Kong rocketed 4.2%, China up 1% and Japan added 0.26%

I gave Zhang a call to ask him about the manufacturing boom in China....

'Harrow   Adran,   rockdown  now  finish  so  Presiden  Xi  make  eberybody  go  back   work  again. Me  at  VW  forced  labour  factory. Triple  shift,  7  day  week  wid  no  horiday. Prease help!'

Apparently old mate here bought his snappy looking set of rose colored glasses on his stop over in Dubai!  

Global Market Update

US Market

DOW FLAT @ 32,661

US GOVERNMENT BONDS also known as TREASURIES were sold off again last night with the 1 year cracking 5% and the 10 year pushing above 4%....The sell off is on the back of fears that inflation is ready to kick higher.

European Markets

Germans down 0.39%, Brits added 0.49% and Frenchies lost 0.46%

Here is the German bond yields for maturities from 1 year to 9 years. Notice how the short dated bond yields are far higher than the longer dated ones? This setup is what is known as an inverted yield curve - which means the bond market is predicting a very nasty economic storm is brewing.

Yields or the interest rate increased across the board last night which means the actual BOND values were falling, so investors are losing.... AVOID BONDS - these yields are going much higher, which also equals big capital loses.

# To learn more about an inverted yield curve I suggest you click on the link below....

https://www.thestreet.com/dictionary/i/inverted-yield-curve

Key Market Summary

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