We saw a real mixed bag this week for ASX performance with the market starting the week off red, hitting the green mid-week, and ending the week off red once more.
Reports midweek indicated that Virgin Australia probably won’t list on the ASX (again) in 2024 – something I predicted back in December last year.
If Canva’s waiting until 2025, given the level of attention they solicit and the advice they have access to, you can reverse engineer that big players on Wall Street are thus expecting next year to be better for Australian IPOs. It’s not rocket science.
Elsewhere, we saw a lot happen in commodities this week – and the big analyst call that grabbed my attention was UBS saying it believes the worst of the lithium price downturn is over.
That could be true, even though it’s early days – lithium prices are up, nickel is up, coal and gold are up – a lot of commodities are up at the moment, despite a floundering China tanking iron ore sentiment.
Uranium, meanwhile, has slipped from its position above the US$100/lb mark, however, and neodymium prices continue to fall to pre-COVID levels – often called a high-value rare earth, that makes interesting Canberra’s decision to give nearly A$1B to Arafura.
It was in truth a shocker week for iron ore with the feedstock for steelmaking hitting prices sub-US$110/tn midweek on most benchmarks, making risky for BHP an upward share price movement on Thursday driven by higher copper prices.
Copper prices shot upward on Thursday after it was revealed overnight on Wednesday that Chinese smelters were to curb production.
Then on Friday we saw the price of Brent Crude climb to US$85/bbl as US demand appears healthy and, perhaps more importantly, as US crude inventories fell by 1.536Mbbl – where the market was expecting an inventory build of 1.3Mbbl.
In the US, there’s early-stage signs the tech-driven 2024 YTD rally may be faltering.
The country also posted higher than expected producer price increases in its latest data release which tanked US markets and led to a shocker Friday to close the week off.
Also: Week 12 is going to be huge for sentiment. We see interest rate decisions from Australia, China, the EU, the UK, and the US. There’s also a litany of other data from multiple jurisdictions.
Here’s the headlines that grabbed my eye this week:
Australian Economy
- NAB’s Australian business conditions index increased by three points to +10
- The median house price in Australia nationally has hit $933,800
- National vacancy rates have sunk down to 1% as rental supply remains dire
- Commonwealth Bank reports a 37% increase in EV purchases from car loans
Australian Equities
- Macquarie has downgraded all of Australia’s “Big 4” banks
- BHP sees some upward share price movement as iron ore prices hit 5mth low
- The 2024 YTD US-led stock market rally appears to be stalling on inflation fears
International Economy
- US producer prices increased +0.6%, manifesting fresh inflation bearishness
- Chinese new home prices hit a 13 month low
- HSBC’s CFO says he is “very positive” about China’s future
The Week Ahead
Monday March 18
- Australian Consumer Inflation Expectations
- Chinese Industrial Production data YoY
- Chinese Retail Sales Data YoY
- Chinese Unemployment Rate for February
- Eurozone CPI for February finalised data
Tuesday March 19
- RBA Interest Rate Decision & Press Conference
- Bank of Japan Interest Rate Decision
- Eurozone Wage Growth data for Q4 of 2023
- US Building Permits data for February
- US Housing Starts monthly data for February
Wednesday March 20
- Chinese Loan Prime Rate decision for March
- UK Inflation Rate yearly & monthly data
- UK Core Inflation Rate yearly & monthly data
- UK Retail Price Index yearly & monthly data
Thursday March 21
- Australian Unemployment data for Februar
- UK Bank of England Interest Rate Decision
- US Jobless Claims data for March
Friday March 22
- Japanese Inflation Rate yearly data
- Japanese Core Inflation Rate monthly data for February
- RBA Financial Stability Review
- UK Retail Sales data for February
- German Business Sentiment data for March
- Russian Interest Rate Decision
- Canada yearly Retail Sales data for January
