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Greetings and welcome to HotCopper’s The ASX Today for Thursday of Week 12, I’m Jon Davidson, and right when I thought we might have seen the worst of things, I copped another big ‘L’ in the Ides of March – the ASX is down 1.5% today in arvo trades.
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That’s due to a conflation of factors – but mainly, Brent is up to $112 US a barrel at the time of writing; gold’s below $5,000 to around $4,860 U.S., oil is the new silver, so it goes.
So why is that happening? Here’s a speed run: Iran keeps bombing its neighbours and hit a particularly important gas plant in Qatar, the U.S. Federal Reserve had a rate decision meeting overnight and kept rates on pause, but markets didn’t like Powell’s tone looking forward. We don’t get a pure-play Warren chair decision til June, so still some time to wait for Trump’s pick for the Central Bank.
Perhaps weighing more on hearts and minds: producer price inflation in the U.S. up seven-tenths of a percent MoM. A hike before June? Maybe.
Then again, Wall Street was starkly red last night, and Brent’s at $112, the ASX is probably more interested in that. The S&P 500 closed down 1.4% overnight; the sentiment gauge reads extreme fear, and the VIX jumped 12%.
Where to from here? Well, I have no idea. I’ve been pointing to Goldman Sachs analysis from two and a half weeks ago that tipped the market to take a fortnight to digest the Iran war. It’s now been a fortnight, suggesting either Goldman Sachs got it wrong or the market’s just reacting to the VIX.
A recovery is inevitable, but how long do we have to wait? That depends on too many unknowables to say anything conclusively.
So let’s turn to stocks at home! Energy stocks in the lead, water is wet, servo player Viva Energy the biggest gainer in that sector up +15%; Ampol not far behind, and higher oil prices mean coal stocks are up too because the black rock is cheaper; Yancoal was up +7.5% in mid-arvo trades.
Elsewhere, gold miners sold off as you’d expect. More pain for New Murchison Gold, down -13% mid-arvo, Andean Silver hit to the tune of 11.5%, Forrestania Resources getting punished down -17% near 2pm Sydney time.
Finally, if you needed more evidence that oil meme trade hype is sucking attention from everything else, spare a thought for struggling Boss Energy holders, or those who’ve been holding on since early last calendar year; Boss Energy actually boosted its uranium resource in South Australia today, and shares still fell on this Red Thursday. Right in the middle of an energy crisis, too. Bring on coal.
That’s The ASX Today for Thursday of Week 12, I’m Jon Davidson, have a great night.
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