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Greetings and welcome to HotCopper’s The ASX Today for Tuesday of Week 10, I’m Jon Davidson, and while on Monday it looked like we might actually skirt around this Middle Eastern war business without too much drama, well, I’m less confident in that today.
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At around 1.30 in the afternoon Sydney time, the ASX was down nearly one and a half percent, following European benchmarks downwards and as Wall Street closed flat. Over in the states, the bull versus bear tug of war around AI stocks continues to roll out, but it’s taken a back seat for now. Inflation resurgence instead will be what we talk more about next week, at least that’s what I predict, given Iran has now said it will fire at ships travelling through the Strait of Hormuz.
Some 20% of global oil supply travels through that bottleneck, and we’ve had the Houthis also threaten to start bombing ships in the Red Sea again. Investors ought to watch how shipping ETFs act in the days and weeks ahead; along with oil prices, that’ll give us an idea of how long the market expects this war to continue. It could be at least a month, if you put much stock into what Trump says anymore.
At home, despite higher gold prices – though at the time of writing they’re still back below $5,400 an ounce USD – gold stocks reversed, best exemplified by Vaneck’s GDX gold ETF falling -2.6% at 1.30 Sydney time. Even Woodside was red, though, it did surge higher yesterday – but a risk-off sentiment is making itself felt; Wall Street’s fear and greed index is currently erring on the side of fear.
At home, we got some ABS data for the mining sector today; unsurprisingly, really, exploration Capex increased by 2% over the last quarter, but that’s like saying water is wet for anybody paying attention.
Looking around the ASX intraday, Magellan Financial (ASX:MFG) was the top gainer as its merger with Barrenjoey is set to go ahead; a lot of coverage has been made of that deal, but really, it’s a fairly simple M&A story – Magellan was worth nearly $60 a share five years ago, now it’s around $10. Business as usual if you ask me.
Perhaps the most alarming signal for the ASX at large was that the BBOZ Bear ETF (ASX:BBOZ) jumped over 3% today, with that alternative benchmark now flashing red. Or, green, whatever, you know what I mean.
And, just as strange as it was yesterday, 4DMedical (ASX:4DX) continues to climb, regaining its HotCopper forum favourite status, for reasons which aren’t really clear. A defensive hedge? A leaky ship? A safer toy to play with? Possibly all three.
That’s the ASX Today for Tuesday, I’m Jon Davidson, have a fantastic evening.
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