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At the start of this week we saw NVIDIA – as a proxy for the AI thematic in general – severely tested once again. In fact, the company lost A$415B in one session, which was the largest ever decline in value for one company witnessed in Wall Street history. The amount NVIDIA lost was equal to the entire value of Chevron, if you needed any convincing Big Tech is the new Big Oil. But was it really NVIDIA’s fundamentals being tested, or was it AI in general?
The two are interlinked – NVIDIA’s marketing team make sure of that – but we’re still waiting to see any of those radical social changes we were supposed to be seeing by now. As far as changing the world goes, a virus from Wuhan remains more important than high powered chatbots.
In Australia, our great I Can’t Believe It’s Not Recession continues. While GDP growth isn’t negative – it came in at +0.2% – it’s been stuck there for the last few quarters, while GDP measured per capita remains negative for the last six. So there you have it: we’re coming up on a two year long per capita recession.
A lot of bullshit was flung around this week as Jim Chalmers pretended to hate the RBA and the RBA pretended that it’s not there to be blameable; I’m not going to bother with any of that because it’s all theatre.
There was one big landmark deal this week that shook things up: Blackstone’s A$40B+ buyout of Australian data centre player AirTrunk. To anybody not following that world, you might have said “what’s AirTrunk?” It’s not far away from being a household name now – people will go on about this deal for years. It’s big news, but unsurprising. Data centres are the new oilfields.
There was a lot that happened this week in the realm of more curious goings-on, too. Let’s run through some of them: Australia posted its hottest ever August on record (love it or hate it, you can’t argue with numbers); ASX-listed Metarock’s major operating arm was taken to court in QLD for industrial manslaughter; Tianqi Lithium which operates a hydroxide plant in Kwinana WA is now a loss-making company on lower commodity prices; Volvo has ditched its plans to become an EV-only company; US job openings are at a 3.5Y low; and Mongolia welcomed a visit from Putin without arresting him which the International Criminal Court made Mongolia promise they’d do, despite The Hague being in the Netherlands and Mongolia being, well, China.
Any surprises there are also theatre.
Australian Economy
- Australia clocks hottest August ever on record
- Q2 GDP growth in Australia comes in at +0.2%; third quarter flat
- Oz household savings hit 18 year low
- Business insolvencies continue to boom in Australia
- ANZ-Indeed job ads fall 2.1% MoM in August
Australian Equities
- Woodside tumbles as brent crude prices hit virtual pre-COVID levels
- NextDC jumps as Blackstone’s $40B+ buyout of Aus data centre firm bolsters confidence
- Metarock’s Mastermyne company charged with industrial manslaughter in QLD
International Equities
- NVIDIA posts A$415B loss in Tuesday trades; USA’s biggest loss ever in one day
- Volvo ditches pledge to become a pureplay EV car company
- Tianqi Lithium – operating the Oz lithium hydroxide plant – swing into loss on price tumble
- JP Morgan ditches recommendation on buying Chinese stocks
International Economies
- Harris backs ultra-rich US unrealised gains tax, waters down CGT proposal to 28%
- US job openings hit 3.5Y low in latest JOLTS data
- Bank of Canada cuts interest rates once again to headline rate of 4.25%
- Further weak Chinese economic data hurts ASX in Week 36
Commodities
- Oil prices hit 1Y low just above pre-COVID levels
- All Chinese REE deposits become “state owned” in under a month
- Lithium green cred challenged by Serbian activists fighting EU Jadar lithium project
- The cost of mining iron ore in Australia increased 30% in Q2 of CY2024 vs pcp
- BMI flag tin as 2024’s best performing metal; see 55% growth over next 10Y
