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NB: Given developments with Nvidia over the past 48 hours, we’re focussing on this area today, with ‘Fund Friday’ returning next week.
The ASX 200 almost managed to recover from early weakness on Thursday, finishing the session on its intra-day high, down just 0.1%. The miners and banks again changed roles, with the materials sector taking 48 points off the market while the financials added 34 points – if they could just rally together, we would be trading at new highs in the blink of an eye. This time, it was Jensen Huang who caused the damage. BHP and Rio Tinto’s significant copper exposure turned from their strength to an Achilles heel: theoretically, both miners are in a good position to benefit from the data-centre and AI boom, but mining stocks across the region fell as investors became unsettled around the uncertainty surrounding Nvidia, the chipmaker at the heart of the AI trade.
- During our trading session, NVIDIA was trading down ~10% in after-hours trading following reports of a second affair with a co-worker, sparking a call for his resignation – which subsequently happened overnight.
Overall, we felt yesterday was a solid performance considering the news around NVIDIA weighing heavily on our influential miners such as BHP (-1.3%), RIO (-2.1%) and Sandfire (-2.4%). Fund managers don’t feel comfortable selling even when there’s bad news in the house; they appear more comfortable simply rotating into a sector which feels “safer” on any particular day.
- We’ve sounded like a broken record over recent months, but MM is still targeting a break of 9300 before we all sing Auld Lang Syne.
Overseas markets were fixated on Jensen Huang and NVIDIA overnight, although his ultimate departure from NVIDIA has been taken relatively calmly so far. In Europe, the French CAC and UK FTSE both gained +0.3%. In the US, despite NVIDIA closing down ~4%, the S&P 500 only retreated 0.4% as did the Dow Jones.
- The SPI Futures are calling the ASX 200 to open down 0.6% this morning as a ~3% gain in oil, following comments from President Trump, weighed on the already soft miners.
