The collapsing nickel price bears a painful resemblance to lithium, both of which are used in EV batteries. However, the surging increase in demand that was anticipated to propel the sector higher has arrived with a relative whimper, while supply has increased unabated from Indonesia in anticipation, with the result being a glut & depressed prices, e.g. the nickel price has halved over the last 12-months. We’re now seeing the likes of Twiggy Forest shutting down Nickel operations his private company Wyloo acquired just six months ago, while BHP is facing similar issues.
Global equities have maintained their bullish advance, which started back in October 2022. There have been plenty of reasons for risk assets to roll over in recent years, from wars to an embattled Chinese economy and surging interest rates, but stocks have continued to rally – plenty of pundits are licking their wounds at the start of 2024. As we often say at MM, a market that can advance on “bad news” is a strong market that should be respected.
We are less than three weeks into 2024, and it's evident that today's market is focusing more on the micro/stock news as opposed to the macro, at least for now. The US NASDAQ registered fresh all-time highs overnight, even as Fed members attempt to rein in the market's optimism with regard to rate cuts in 2024, i.e. a market that rallies on bad news is a strong market. At MM, we have been bullish towards tech for over twelve months, targeting the recent advance by the “magnificent seven.”
Gold stocks have disappointed investors over the last forty-eight hours, with Barrick Gold (GOLD US) and Evolution (EVN) delivering poor production numbers, pushing up unit costs, which unfortunately has been a consistent thematic over recent years. The issues with some of the heavyweight gold stocks have been painfully reflected by their share prices; even as gold tests its all-time high, both GOLD & EVN have more than halved from their post-COVID high – good job, gold hasn’t fallen! MM has been overweight gold through 2023, which has delivered a reasonable return but nothing like our positioning in uranium stocks, illustrating that picking the macro picture is just one part of the puzzle.
The ASX200 fell over -1% on Tuesday, with broad-based selling washing through the market as US S&P500 Futures declined throughout our session – they seemed to get a sniff of what was to come overnight. This year’s news flow is set to be dominated by the US election, and Trump's storming victory in Iowa cemented him as the likely candidate to poll against Biden come November – at this stage, Trump is already a solid favourite with the bookmakers to take his second term in the White House. Hence, in a similar fashion to the Christmas Rally, it's prudent for investors to be aware of the market's usual performance in an election year.
It was interesting to read in the last few days that car rental company Hertz was going to sell 30% of its US electric vehicles (EV), citing higher repair costs and diminishing demand for EVs – they are buying back the dreaded petrol vehicles! The rental giant hasn’t necessarily been a leading light over the last few years, with its shares falling in a bullish market. However, with increasing lithium supply, the commodity doesn’t want to encounter reduced demand for EVs or at least slower growth than is being priced in by markets. To put things into perspective, Hertz bought 100,000 Teslas in 2021, but the US isn’t buying into the EV story and the US accounts for well over 10% of the global car market.
The ASX200 has chopped around in early January, it’s still within striking distance of its 7632 all-time high, with the Index sitting down -1.2%, but if we included dividends, the ASX Total Return Index surged to new record highs in December. The US S&P500 is up +0.3% year-to-date, testing its all-time high with declining bond yields supporting the heavyweight Tech Sector, which has already posted fresh all-time highs even with Apple Inc (AAPL US) struggling. Bond yields continue to control markets and, most importantly, stock & sector rotation as investors second guess the future steps of major central banks.
As was the case yesterday, the focus of this morning’s report is looking at levels to reduce market exposure for the Active Growth Portfolio. Note we are cautiously bullish on a number of the positions simply because we believe the current market advance is maturing into January.
As the ASX200 Accumulation Index (including dividends) pushes to new all-time highs, MM is looking for areas to de-risk slightly after being fully invested through November and December. Today, we have briefly focused on ten stocks in alphabetical order, reiterating if/where we are considering moves, although obviously if we do press the defensive button, it's unlikely we will sell all/part of more than 2/3 positions within the portfolio.
The local market is still in the shadows of the major US indices when it comes to registering new all-time highs, but it has definitely been “on song” over the last few weeks; the ASX200 has already advanced +10.2% for November & December combined with a few exciting sessions remaining. However, as stocks continue to follow our roadmap into 2024, one characteristic which looks set to persist into 2024 is the strong getting stronger & weak weaker.
Global equities have maintained their bullish advance, which started back in October 2022. There have been plenty of reasons for risk assets to roll over in recent years, from wars to an embattled Chinese economy and surging interest rates, but stocks have continued to rally – plenty of pundits are licking their wounds at the start of 2024. As we often say at MM, a market that can advance on “bad news” is a strong market that should be respected.
We are less than three weeks into 2024, and it's evident that today's market is focusing more on the micro/stock news as opposed to the macro, at least for now. The US NASDAQ registered fresh all-time highs overnight, even as Fed members attempt to rein in the market's optimism with regard to rate cuts in 2024, i.e. a market that rallies on bad news is a strong market. At MM, we have been bullish towards tech for over twelve months, targeting the recent advance by the “magnificent seven.”
Gold stocks have disappointed investors over the last forty-eight hours, with Barrick Gold (GOLD US) and Evolution (EVN) delivering poor production numbers, pushing up unit costs, which unfortunately has been a consistent thematic over recent years. The issues with some of the heavyweight gold stocks have been painfully reflected by their share prices; even as gold tests its all-time high, both GOLD & EVN have more than halved from their post-COVID high – good job, gold hasn’t fallen! MM has been overweight gold through 2023, which has delivered a reasonable return but nothing like our positioning in uranium stocks, illustrating that picking the macro picture is just one part of the puzzle.
The ASX200 fell over -1% on Tuesday, with broad-based selling washing through the market as US S&P500 Futures declined throughout our session – they seemed to get a sniff of what was to come overnight. This year’s news flow is set to be dominated by the US election, and Trump's storming victory in Iowa cemented him as the likely candidate to poll against Biden come November – at this stage, Trump is already a solid favourite with the bookmakers to take his second term in the White House. Hence, in a similar fashion to the Christmas Rally, it's prudent for investors to be aware of the market's usual performance in an election year.
It was interesting to read in the last few days that car rental company Hertz was going to sell 30% of its US electric vehicles (EV), citing higher repair costs and diminishing demand for EVs – they are buying back the dreaded petrol vehicles! The rental giant hasn’t necessarily been a leading light over the last few years, with its shares falling in a bullish market. However, with increasing lithium supply, the commodity doesn’t want to encounter reduced demand for EVs or at least slower growth than is being priced in by markets. To put things into perspective, Hertz bought 100,000 Teslas in 2021, but the US isn’t buying into the EV story and the US accounts for well over 10% of the global car market.
The ASX200 has chopped around in early January, it’s still within striking distance of its 7632 all-time high, with the Index sitting down -1.2%, but if we included dividends, the ASX Total Return Index surged to new record highs in December. The US S&P500 is up +0.3% year-to-date, testing its all-time high with declining bond yields supporting the heavyweight Tech Sector, which has already posted fresh all-time highs even with Apple Inc (AAPL US) struggling. Bond yields continue to control markets and, most importantly, stock & sector rotation as investors second guess the future steps of major central banks.
As was the case yesterday, the focus of this morning’s report is looking at levels to reduce market exposure for the Active Growth Portfolio. Note we are cautiously bullish on a number of the positions simply because we believe the current market advance is maturing into January.
As the ASX200 Accumulation Index (including dividends) pushes to new all-time highs, MM is looking for areas to de-risk slightly after being fully invested through November and December. Today, we have briefly focused on ten stocks in alphabetical order, reiterating if/where we are considering moves, although obviously if we do press the defensive button, it's unlikely we will sell all/part of more than 2/3 positions within the portfolio.
The local market is still in the shadows of the major US indices when it comes to registering new all-time highs, but it has definitely been “on song” over the last few weeks; the ASX200 has already advanced +10.2% for November & December combined with a few exciting sessions remaining. However, as stocks continue to follow our roadmap into 2024, one characteristic which looks set to persist into 2024 is the strong getting stronger & weak weaker.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
Verication email sent.
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
!
Invalid One Time Password
Please check you entered the correct info, please also note there is a 10minute time limit on the One Time Passcode
To reset your password, enter your email address
A link to create a new password will be sent to the email address you have registered to your account.
Market Matters members receive daily market reports, real-time trade alerts, full access to 5 portfolios and dynamic company data.
Choose how you'd like to proceed:
We have a range of membership options to suit your needs and budget, why not join today and get unlimited access to the premium Market Matters service.
