Greetings and welcome to HotCopper’s latest The ASX Today, I’m Jon Davidson back in the studio after my week away and on day two of Week 14 we’ve seen a relief rally kick in right before lunchtime on the East Coast.
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The culprit? An unverified report in the Wall Street Journal published a little earlier today that cites undisclosed “Trump aides” claims the U.S. President is looking to exit Iran regardless of who controls the Strait of Hormuz.
The XJO immediately shot green up nine-tenths; Brent Crude fell to ~US$105/bbl, losing some US$10 per barrel in the blink of an eye, and gold jumped over +1%. At the same time, the U.S. 10Y bond yield fell back to 4.3%; the Hang Seng shot up out the gate, and the Japanese NIKKEI pared to travel sideways.
All of that is based on one unverified report released midway through today. True, it’s the Wall Street Journal, but in Trump’s America, you can’t even trust what the actual U.S. President says. Let alone, unnamed aides.
So if you wanted to say it’s a bit risky putting so much faith into one media report, I’d agree with you. Especially as that headline seemed to outweigh fresh reports of new explosions inside Iran within the last hour.
Clearly, the market’s hungry for a good news story. And if this maintains the quo, it’s likely to be a boon for Wall Street, too. So far, prediction markets see a chance around 40% the U.S. could enter a recession this year; and per some analysts’ lines of thinking, the market’s looking ready for a relief rally as bearish short bets peter out.
Still, everything can change in the blink of an eye. But writing this in the early arvo session, it looks like a good day so far.
So what’s happening around the traps? Online mattress-cum-furniture retailer Koala (ASX:KOA) listed on the ASX today, a fairly bold time to do so, and while today’s trades were relatively thin, it was a good debut – the stock was up over +10% higher at the time of writing after listing at $3.40 a share.
But volumes are thin, and liquidity isn’t really there – I’d argue we’re yet to see a true test for the company’s share price in the coming weeks.
Elsewhere, coal stock Coronado Global (ASX:CRN) has shrugged off news of that potential U.S. exit of Iran after releasing an equity incentive plan; shares there stayed over +11% higher in afternoon trades.
The other black fuel remains in favour, but the sector was mixed – Whitehaven (ASX:WTC) was down -5% at the time of writing; Yancoal (ASX:YAL) down over -2%, both reacting negatively to the Journal report.
Finally, Commonwealth (ASX:CBA) flipped green intraday on Tuesday arvo, also responding to that report; Westpac (ASX:WBC) flipped green with more gusto along with NAB (ASX:NAB) and ANZ (ASX:ANZ), rounding out the big four.
So too BHP (ASX:BHP) when it comes to flipping green, because I haven’t brought it up in a while; iron ore futures in Singapore are fetching nearly US$107/tn.
That’s The ASX Today for Tuesday of Week 14, I’m Jon Davidson, have a great night.
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