A basket of commodities took a collective breather on Friday, leaving it up to Wall Street to act as a shining light across the upcoming long weekend to inform the direction of the ASX next Tuesday. (Take note: the ASX will not be trading on Monday 8 June.)
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The futures price(s) of copper, iron ore, and lithium all slumped on Friday, hitting the Big Aussie BHP Ltd, as well as Fortescue and MinRes. Meanwhile, energy majors fell on Friday too, along with the banks.
Energy stocks fell in tandem with Brent Crude prices down -5.8% over the month, and as the so-called “oil meme trade” starts to cool off, which is to say less intense retail participation in Brent futures.
Commonwealth meanwhile appeared to fall in line with overall vibes, with the ASX200 tracking for a weekly loss over -1% heading into market close on Friday.
All in all, with no shining lights on the metals market indicating much of anything for Australia’s resources-heavy share market, now dormant for the next three days, Australian market psychology is left to the whim of whatever global headlines emerge over the next 72 hours.
That makes guessing what could happen after the weekend break harder than usual; but it’s a safe bet the same boring catalysts that have dominated conversation of late are likely to remain influential: the price of oil, what’s going on in the Middle East, how the big AI-tech stocks fare, and US inflation.
We’ve still got two weeks until new US Fed chief Kevin Warsh makes America’s next rate decision call, but next week should be exciting. Or perhaps the week after for us.
That’s because Elon Musk’s SpaceX is tipped to list on the NASDAQ on June 12 US time, but by the time that happens, it’ll be weekend for us down under again, so we’re not going to see what that means for us, if anything, until Week 25.
Then we’ll get the Fed decision – so it’s a busy month coming up, but we’ve still got a week in potential limbo to wait, not ignoring of course that we are our own country, but lets be real.
Speaking of domestic matters: we got fresh GDP data this week, and the Australian economy is slowing. Growth came in at +0.3%, and there’s something interesting going on in that data – if you ignore data centre construction, GDP was even less impressive than that.
So the building of data centres is basically keeping our GDP rate artificially afloat. Without that, we’d be one more bad read away from recessionary territory. Food for thought – the ASX is sure acting like we’re in one.
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