Greetings and welcome to HotCopper‘s ASX Today intraday market summary, I’m Jonathon Davidson filling in for the team while the Perth office set up shop at RIU’s Good Oil & Gas Conference. (Today will be text-only, so this article’s all you get.)
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The good news is at the time of writing – 1.05pm AEST – the XJO is cautiously green up +0.22%.
That Brent Crude prices climbed to a new high of US$108/bbl overnight appears to have been something that was priced in – the ASX hasn’t reacted too much to that, even after Wall Street closed red overnight with most benchmarks down over half a percent.
As I wrote earlier today, it’s a good time to be an oil ETF investor but not good to be an index investor this week. The ASX 200 hit three-month lows earlier this week as a batch of headwinds come together for the bourse down under.
There’s the oil thing, obviously, and on the back of renewed Iran-US hostility – as well as a stubborn US core inflation picture, coupled with expectations Warsh is going to hike rates at the Fed – US 10Y bond yields hit 5% proper this week.
It’s widely agreed upon that the US national debt becomes much harder to service with the US10Y bond yield at 5%; seeing as yields rise when bonds are sold off, it’s not a screaming endorsement of investor faith in the USA’s overall economic health.
Of course, turning back home, there’s also the impact of whatever the hell AI companies talked about this weekend when the big three – OpenAI, Musk’s X and Anthropic – all told the world media that AI is dangerous and needs to be slowed down.
There’s a few theories about what their game plan is with that one. Some believe they’re trying to encourage the US government to restrict both Chinese AI development as well as newcomers to the space; others believe the companies are simply trying to promote their wares in a fashion quite fitting for these already strange times.
A third cohort believe OpenAI and Anthropic may be trying to slow down development so as to slow down cash burn – particularly as both loss-making hyperscalers intend to list IPOs soon.
Fun fact: SpaceX, which is really Musk’s AI company featuring a small launch and telecoms division, still remains down -10.85% since it listed.
While the ASX hasn’t really got any great AI names to it – except for BHP by virtue of copper mining, if you listen to Morgan Stanley analysts – the XTX was down -0.40% in early arvo trades, compared to the XJO and All Ords being green two tenths of a percent each.
The news has put the fear into investors of Taiwan’s AI microchip godhead stock TSMC. Shares in the world’s most advanced microchip maker are down -2.45% over the last 5 days. Still, in the last six months, investors are up 30%.
But all that’s neither here nor there. Looking around the traps at home today, aspiring water trading and services firm Vysarn Ltd took the top gainer status after plummeting on Monday following the termination of a proposed acquisition in WA. Investors are buying the dip, and there’s probably a good joke about liquidity in there somewhere too.
So: might we see the ASX shake off the blues and return the XJO above 9,000 pts this week? I can’t help but feel that’s probably as likely as peace in the Middle East.
That’s HotCopper’s ASX Today for Wednesday of Week 38; I’m Jon Davidson, have a great night and we’ll see you tomorrow.
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