Greetings and welcome to HotCopper’s The ASX Today for Wednesday, I’m Jon Davidson. What I thought was perhaps most interesting about today is that Wall Street got relatively slaughtered overnight, and yet, here, the XJO only dipped down by about a third of a percent – not too bad, really.
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In points terms, the Australian market was trading around the upper 8,700s for most of the day. The tech index didn’t go too well, however, after Mag7 stocks all sold off out of the gate on the overnight Wall Street session.
So why did Wall Street have such a bad time? Well, this whole Greenland thing has turned into a flashpoint for European politicians, and so now we’re facing another EU-U.S. trade war. Mag7 stocks went down because if you’re going to “Sell America,” that’s definitely a logical place to start.
To recap, Donald Trump has threatened France with 200% tariffs on their wine, he’s also threatened 25% tariffs on the U.K., Germany, the Netherlands, Finland, and others this week if they don’t agree to let the U.S. take Greenland. Overnight, the Danish pension fund said it would sell its US bonds.
That’s more symbolic than anything; the Danish pension fund doesn’t hold that many U.S. bonds. But it would be a different story if Norway did the same, because their world-leading sovereign wealth fund would be a very different kettle of fish. Macron also told the Davos conference last night that he thinks the whole European Union should simply isolate the U.S., if it comes to that.
So, trade war. We’re at the start of another year, talking about another trade war, once again. No surprises that Canada is cosying up to China; Canada’s President told Davos last night the post-WW2 world order is dead. Hopefully, he’s being a drama queen.
Elsewhere, gold and silver are continuing to surge on the back of all this; that’s what helped the ASX today, if I had to guess, a lot of green days for investors in the small end of town, as well as BHP (ASX:BHP) up and shrugging off reports it’s had to concede to taking less for its ore shipments to China.
Looking at big company news: Paladin Energy (ASX:PDN) jumped another +10% on Wednesday in line with spiking uranium prices, which are going for a jog along with just about everything else, gold’s gravitational mass sucking up everything else with it like a black hole. COVID-19-era darling Australian Strategic Materials (ASX:ASM) to be bought out by Colorado-based uranium and rare earths player Energy Fuels in a bid fully accepted by the company’s board, and finally, Commonwealth Bank (ASX:CBA) was red on Wednesday, down nearly -2% in the early arvo as Wall Street chaos rattles the bank’s investors. Sell America mightn’t be here yet.
That’s The ASX Today for HotCopper, I’m Jon Davidson, have a bodacious evening.
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