Greetings and welcome to HotCopper’s latest The ASX Today, I’m Jon Davidson, back from a week away in Darwin, and surveying the lay of the land on Monday of Week 14, it doesn’t seem I’ve missed much.
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The ASX200 fell well over a percent, down around -1.3% as Brent Crude futures rose above US$115/bbl and gold prices remain ~US$4,500/ounce.
All in all, the XJO is facing its worst trading month in some six years. In that light, the Australian market continues to scramble for a new safe haven with the gold-standard asset, gold, now in major question. European market volumes were suppressed last week as traders pulled out of the market, while it remains too complex to predict; I’d be surprised to learn it’s any different here.
The oil meme trade remains well in place, and speaking of oil prices, Canberra today announced its first big move to address the problem: the government is halving the fuel excise tax for the next three months, which Albo says will see Aussies save something like 26 cents per litre at the servo.
Whether or not servos play along remains the question, and perhaps a view they won’t is why the market didn’t budge. But the announcement did hurt Woodside’s intraday gains; the price fell when the move was announced, though not by much. At the time of writing this script, those losses were already paring back as investors put more faith in the economic goliath that is the price of oil.
Also: Aluminium stocks, namely Alcoa, surged Monday as Iran struck aluminium plants in the Middle East. That’s about the whole of it: the Iran War continues to reshape markets to the tune of global downside risk.
Looking around the traps at company moves, as mentioned, Alcoa was trading over +7% higher in afternoon trades as the metal becomes the latest victim – or beneficiary – of geopolitical fallout in the Middle East as Iran continues to hit industrial assets in neighbouring countries hosting US bases.
Woodside predictably surged Monday as Brent climbs; shares in the southern hemisphere’s second-largest oil and gas player are up +25% over the last month, though the fuel excise announcement did notably hit intraday momentum.
Finally, Pilbara Minerals (or PLS Group) jumped as much as +6% intraday after Macquarie put out a note last week claiming that due to high oil prices, EV sales are likely to continue, and analysts also reiterated a view that the lithium market will be undersupplied by the end of the year. Should industrial fuels continue to stay high, views that big battery storage will use up a lot of supply this year could come true.
That’s the ASX Today on this fairly depressing Monday, I’m Jon Davidson. Try not to look at your portfolio, have a great night, and we’ll see you tomorrow.
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