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Where exactly the ASX200 will rock up by year’s end, depending on how you want to measure that – whether we get a Santa Rally, whether we see the XJO rise back above 9,000pts to a sustainable level, or whether an AI market crash wipes out the bourse completely – could depend, above all else, on the sustainability of (the perception of) Trump and Xi’s apparent trade war cooling.
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You can use that podcast link above to navigate to HotCopper Wire episode 30, published yesterday, to hear my take on the current market situation (alongside my more-organised-than-I editor Isaac McIntyre,) where we covered the last two weeks of geopolitical macro.
Let’s just run through that now as a bullet-point list to save myself from typing the same thing too many times this week. In the last ~fortnight, we’ve had:
- The Australia-American Trump-Albanese critical minerals meeting
- The Australia-ASEAN Anthony Albanese address
- The American-Asia Trump address to a number of countries
- The Trump-Xi meeting that also included critical minerals deal elements
- Gold has receded below $4K/oz, gone back over; dipped back down, and as of Friday afternoon, is back at $4k/oz.
The gold price is probably the most important, or at least it is in my mind, because that’s basically a measure of the market demand for save haven (if you aren’t looking at Commonwealth Bank’s market cap that is,) and what it shows is quite clear.
The market has no idea what to do, and so gold has stalled in a kind of holding pattern limbo (more or less), churning softly like ocean swell between the high $3,900s and the low $4,000s.
So there’s that. And that’s because there’s been so much information to take in (notwithstanding Australia’s persistent and higher-than-expected inflation, and, the fact of this week’s RBA hold decision) it isn’t surprising that Australian markets, and to some extent perhaps Wall Street too, aren’t sure what to do.
What could be the next big catalyst we’ll see this month will probably be of the ilk that defined October – trade wars, trade deals, tariff policy, geopolitical macro (read: China and America), and possibly Trump may decide he wants to try and broker peace in Sudan.
At any rate, it’s worth noting that after last week’s optimism about a cooling US-China trade war, Trump has in the last 24 hours reportedly moved to publicly block NVIDIA from sending chips to China, one of the original flashpoints that got us into the position of needing to have the two economic powers conduct a meeting at all.
Never a dull week. Speaking of – next week is Week 46 of the year. The wise would probably start buying Christmas presents early; I can tell you that Labubus are going cheap right now. But by December, they could be old news. Maybe like a trade war, but probably not.
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