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There were a lot of things HotCopper users were watching this week, but chief among them was news from Cuba-based oil explorer Melbana Energy. After years of setbacks, the company is ready to produce its first oil in the exotic jurisdiction later this year – meaning Melbana is ready to become a producer.
The news proves wrong critics of the company which have, full disclosure, included myself – more than once. While its flagship production well is producing less than 2,000bpd; and while brent crude has dipped to the US$70/bbl mark, it’s still a success story for a little Aussie battler – and everybody loves an underdog.
Elsewhere, all eyes were on the US Harris-Trump debate this week which isn’t going to decide the election either way and where the “winner,” apparently, depends on who you support. Trump, in typical fashion, came out with a real banger: immigrants are crossing the border into the US and eating the family pets of good, god-fearing, red-blooded Americans.
That went down about how you’d expect, admittedly, it was the highlight of an otherwise uninspiring television event. (ABC host David Muir was also, at times, particularly amusing.)
But in the world of finance and markets, all eyes ended up on the other superpower (that isn’t China) – Russia. President Putin, perhaps jealous of all the attention not being paid to him, made a televised address where he basically threatened to ban exports of nickel, uranium, and other metals onto world markets. He also threatened all-out-war, again.
Markets cared more about the commodity implications. Outside of the western allied countries, Russia exports an awful lot. The implications were enough to send all kinds of commodities higher; coupled with Chinese CATL’s apparent plans to shut down two lithium mines, the ASX materials sector had a ripper week, up around +4% WoW.
Another thing putting wind in the ASX’s sails: acceptably tame US inflation has solidified expectations of a rate cut from the US Fed later this month, the ECB also cut rates, blah blah blah. I found something from left of field in markets this week far more interesting.
A well-known quant chief over in The States, Cliff Asness, has released a heavily opinionated and perhaps overwrought paper on the impacts social media has had on stock markets over the last thirty years. While it takes him about 12 pages to start making a point – think of it more as an ambling blog post, much like what you’re reading now – he points towards a deterioration of efficiency in stock markets over relatively recent history and it’s his ultimate belief stock markets have allowed misinformation to thrive.
Information has always been available, he reckons, but says these days, people aren’t as good at making common sense conclusions based on news. That means investors can expect bigger returns in an uncertain future, but less success with stock-picking.
The general thrust of his paper, that social media is causing a breakdown of consensus reality, feels fairly uncontroversial to me. Unfortunately, there may need to be more rigorous evidence collection and less opining for that to be proven. But it’s definitely worth, at least, an attempted read.
Check out his “Less-Efficient Market Hypothesis.” Just don’t tell any HotCopper power users.
What HotCopper users loved
- Melbana Energy – based in Cuba – says it’s set to produce first oil later this year
- FBR’s ‘3D printed’ houses pass first-stage US safety checks
- Global Data Centres looks like it might be de-listing after AirTrunk deal windfall
Australian Equities
- ASX Materials sector clocks ripper week on CATL shutdown; Putin export threats
- Namoi Cotton takeover bid from Olam raised to 75cps; two major shareholders back offer
- Steadfast Group loses ~$600M in one day following Four Corners report
- Nine Entertainment flags CEO departure on an ex-divvy trading day
Australian Economy
- Macquarie reckons the RBA’s six months away from a cut
- Household spending lifts in line with Father’s Day per CBA analysis
- RBA chief econ doesn’t see disinflationary forces from the labour market yet
Commodities
- Morgan Stanley cut oil price forecast for second time; sees US$75/bbl avg. in Q4
- CATL Chinese lithium mine shutdown reports spur rejuvenated enthusiasm for lithium
- NYSE-listed Vale plans to produce more iron ore – even as prices stay troubled
International Economies
- China’s CPI growth still points to an economy suffering from a lack of strong demand
- How to guarantee a strong EU? Ramp up spending and debt: former ECB chief
- Euro Central Bank cuts rates as expected
- US inflation comes in tame; markets still expect a late September rate cut; ASX rises
Geopolitics
- Trump-Harris debate offers no deciding moment; immigrants eating pets a highlight
- Putin threatens to ban uranium, nickel exports in reply to Western sanctions
- Putin also implies all-out-war if Ukraine allowed to use long range missiles
