The latest market news, commentary and strategy by Adrian Rowney
5 Things that Grabbed my Attention
1. Moody's downgraded a bunch of banks in the US....stress is building.
2. Warren Buffet is now sitting on a cash pile of around US$150bn....That is becoming a serious war chest for the coming financial crisis...you watch, banks will come begging for money from him in the future - just like in the GFC.
3. Apparently Invocare (IVC) has agreed to a lower takeover bid of $12.70 from TPG....IVC is still in a trading halt....Looks like the IVC top brass want to collect some big fat bonuses and sail off into the sunset after punting with company money (and losing big time) on stocks and bonds last year - what a nice reward for these circus clowns!
4. Orange Juice futures have been on an incredible rally over the past few years (see random observation)...so with Costa Group (CGC) being Australia's largest citrus grower, it is no surprise that a US private equity firm is trying to buy them out for $3.50 per share - they should be told to BEAT IT at that low price..... CGC is a BUY LAST SALE $3.33 - it once traded around $8.00!
5. Newmont's giant SILVER mine in Mexico (world's largest by reserves) has now been shut for two months, yet the price of SILVER is down about 7% in that period....Does anyone have a legitimate explanation for that price action as deficits build due to record demand?
ASX Market Update
ASX 200 was FLAT @ 7311
Coronado (CRN) fell 11.5% after releasing its 6 month profit report. Once again, inflationary pressures were blamed on falling margins..... but.. I think shareholders selling out will regret their decision as the future looks pretty good. CRN also finished with a cash balance of A$295milion so it's balance sheet is in pristine condition.
CRN mentioned they are aiming to significantly increase production over the next two years to take advantage of what is likely to be a very buoyant market. BUY LAST SALE $1.455
Orange juice futures have been on a historic run...the short sellers keep getting bowled over!
The Day Ahead
- Our SPI is down 17 points
- Bitcoin up 3% to $29,899
Movements affecting our resource stocks today (USD)
- BHP in the US down 0.85%
- Newmont down 1.58%
- Gold down 0.5% to $1959
- Paper Silver down 1.75% to $22.82
- Platinum down 2.23% to $906
- Copper down 1.5% to $3.77
- Brent Crude up 0.81% to $86.03
- Iron ore down 2.3% to $104.50
Asian Market Update
Japan up 0.38%, China fell 0.25%, Hong Kong fell 1.8%
Energy imports into China have ramped up - Xi Man looked like he was making the most out of the cheap prices of COAL, GAS and OIL....plus....winter is coming.
Global Market Update
DOW down 158 points to 35,314
Market reaction to the banking downgrade from Moody's : GOLD/SILVER + STOCKS sold off...money flowed into CRYPTO, BONDS and USD.
Germans off 1.1%, Brits down 0.36% and Frenchies dipped 0.69%
Big spending governments need to be fed....
Italian banks slump after govt introduces windfall tax. Deputy PM Salvini announced a 40% levy on extra profits of lenders for 2023 as part of a wide-ranging decree approved at a cabinet meeting. Analysts estimate it will wipe 19% from bank earnings. Levy targets higher interest… pic.twitter.com/O2KRZxG6cF
— Holger Zschaepitz (@Schuldensuehner) August 8, 2023
Key Market Summary