Investment Ideas From the Edge of the Bell Curve
The Australian sharemarket bounced today, recouping some of its losses from earlier in the week thanks to a rally in commodity stocks. The ASX 200 closed up 0.77%, to 7,921.3, with ten out of eleven sectors in the green. The All Ordinaries also gained 0.7%.
This rebound came after a significant drop of 1% on yesterday, the largest decline in six weeks, triggered by lower commodity prices and heavy selling on Wall Street.
Despite Friday’s gains, the benchmark index finished the week 0.6% lower as depressed commodity prices and concerns about China’s economy weighed on export-facing shares.
Despite that, the materials sector was among the top performers, rising 1.4%. Mega caps like BHP and Fortescue Metals saw increases of 2.2% and 1% respectively.
This followed a rebound in iron ore futures on the Singapore exchange, which climbed 2.2% to $US102.15 a tonne during today’s session after dipping below $US100 overnight.
Mineral Resources saw a jump of 3.5% after announcing it was on track to meet its production guidance for FY24, with production volumes up 9% year-on-year.
Energy stocks also performed well as crude oil prices recovered slightly, with Ampol (+0.95%) and Santos (+1.17%) both seeing increases.
Meanwhile, on Wall Street, the S&P 500 ended down 0.5%, despite a brief comeback attempt in the morning.
While tech stocks continued to face selling pressure, about 300 benchmark members still finished higher.
The week had seen the biggest sell-off on Wall Street since 2022, triggered by disappointing results from Tesla and Alphabet.
We’ll have more big earnings next week, as well as Australia’s latest CPI numbers on Wednesday, so stay tuned for those next week.
Until then, have a great weekend!
Asset manager Regal Partners [ASX:RPL] is up after a modest boost to its funds under management (FUM) for the June Quarter.
The firm’s total FUM rose to $12.3 billion, a roughly 1% increase from March 2024.
The company said today the inflows were thanks to ‘positive contributions coming from the establishment of a new long/short separately managed account and a top-up to an Attunga Capital mandate. In addition, ongoing demand for the multi-strategy Regal Partners Private Fund continues to remain firm, alongside additional client
support for individual strategies such as Regal’s resources strategies and PM Capital’s global strategy.’
RPL is scheduled to release its 1H24 results on 26 August but has already upped its guidance to approximately $59 million in performance fee revenue for the half year, which is above the prior guidance of $55-56 million.
Shares are up by +2.5% in trading today at $3.74 per share.
Here’s an interesting chart from Luke Swanson arguing that small-caps are coming back; what do you think?
“What it basically shows visually is that SCV going back to 1930 tended to have really long periods where it underperforms the S&P 500, and then relatively short bursts of outperformance…You’ve got to stay in your seat if you want to capture that.”
SCV GANG 🗣️ https://t.co/j0760NFLBZ pic.twitter.com/kBFcX24ZRK
— Luke Swanson (@Luke_Swanson_) July 25, 2024
Western Australian gold producer Bellevue Gold [ASX:BGL] has seen its shares drop by 23$ today after completing a $150 million institutional placement, selling its shares at a 15.3% discount to its closing share price on Wednesday.
The funds will be used to ramp up exploration at the Bellevue Gold Project after two years of limited exploration during its commissioning.
Bellevue’s Managing Director and Chief Executive Officer, Darren Stralow said:
‘We are extremely pleased with the very strong support for the Placement from both our shareholders as well as new investors. With the benefit of the enhanced financial flexibility we now have, our team’s focus will continue to be on unlocking the capability and value of this special mining operation by materially growing production and reducing costs, in order to maximise free cash flows and returns for our shareholders.’
Today’s drop wiped out all of the company’s gains this year, putting its 12-month return at -3.57%. Shares are currently trading at $1.41.
Diversified mining company Mineral Resources [ASX:MIN] is up by nearly 5% in trading today after posting a strong quarterly report.
The company announced it was on track to meet its FY24 production guidance despite some drops in quarterly volumes.
MinRes reported a 9% year-on-year increase in production volumes to 269 metric tons, sitting comfortably within its projected 260-280 metric tons guidance range.
That was despite quarterly production being down 12% quarter-on-quarter. That was 61 Mt less, primarily due to lower mine development at the Wodgina and Mt Marion mines.
In the June quarter MinRes saw iron ore shipments increase 6% qoq, which brings its FY24 shipments to 18.1 Mt, well within guidance again.
The company forecasted net debt for FY24 to be $4.4 billion as it continues to develop its Ken’s Bore site with a next-generation crusher and haul roads.
The Aussie market has rebounded at midday, recovering from earlier losses this week, with the ASX 200 up by 1% to reach 7930.6 at lunchtime.
Nine of eleven sectors showed gains this morning, starkly contrasting to the previous day’s 1% decline.
The Mining sector emerged as a standout performer, surging 1.8%. Led by Industry giants BHP and Fortescue Metals, who saw increases of 2.3% and 1.7% respectively.
This rise has come as iron ore futures recovered on the Singapore exchange, trading 2.3% higher at $US102.25 a tonne, rebounding from its dip below $US100 overnight.
Mineral Resources stood out in trading this morning, with an impressive 5.7% jump after it announced it was on track to meet its FY24 production guidance.
The company reported a 9% year-on-year increase in production volumes to 269 metric tons, well within its projected range of 260-280 metric tons.
Energy stocks also showed positive movement, with Ampol leading the charge with a 1.9% rise, followed closely by Santos, up 1.8%.
That’s thanks to a 0.26% gain in Crude oil prices. However, oil looks on track for its third straight week of losses on concerns about demand.
Wall Street saw another downturn overnight, with the S&P 500 closing 0.5% lower after initially showing some gains. The Nasdaq also declined by 0.9%, largely due to a continued shift away from the tech sector, which favoured the small-cap Russell 2000 index, which closed up 1.3%.
Reporters at Nine Entertainment’s [ASX:NEC] publishing division have rejected an 11th-hour offer and voted to strike on the eve of the Paris Olympics.
Staff at The Australian Financial Review, The Age, Brisbane Times, WA Today, and the Sydney Morning Herald have been engaged in tense negotiations for the past six months.
With the most recent offer rejected the unionised workers will start a five-day strike which will begin from 11 am AEST today.
The strike will coincide with the opening ceremony and the first days of the Paris Olympics as the group felt the pay rise offer wasn’t enought.
Michelle Rae, acting director of the MEAA media division, said today:
‘Journalists have asked for a modest wage increase in line with the CPI after forgoing any pay rise during COVID, and at a time when the company is making record profits.’
Shares in Nine are steady in early trading today and have seen their share price fall by nearly 35% in the past 12 months.
Good morning. Charlie here,
The ASX 200 opened up +0.78%, bouncing after a heavy day of selling yesterday. With a mixed session from Wall Street overnight, ASX futures had risen on a Wall Street rally, which turned sour in the last 30 minutes of trading. Things are looking more positive now, despite tthe S&P 500 and Nasdaq ultimately falling overnight.
The ASX is marching to its own beat today. We’ll be watching positive reactions to strong earnings that came through yesterday on the ASX but saw muted responses due to selling pressure.
The rotation out of large caps continued, with the Russell 2000 small-cap index gaining +1.26%, this trend will likely continue until another major Magnificent 7 stock can handily beats earnings and ease some of the concern about earnings at the top end of the market.
That or an eventual rate cut from the Fed, which is likely to spur the market onwards. The steepening US Treasury yield curve tells us bond traders are anticipating this cut soon.
Carmaker Ford saw its biggest one-day loss since the ’08 financial crisis, dropping -18.3% and losing around US$7.2 billion in market cap.The drop came after its second quarter report showed its costs rising from its EV unit and quality issues in some of its prior models.
The US reported its Q2 GDP figures, showing an increase of 2.8% quarter-on-quarter. That was easily above the 1.9% estimates and is a sign for many that the economy is holding together.
Precious metals tumbled overnight, with silver dropping by 3.5% and spot gold prices dropping by nearly -1.5% as those signs of a healthy US economy pushed traders away from the haven assets and into bonds.
Name | Value | % Chg | |
---|---|---|---|
Major Indices | |||
S&P 500 | 5,399 | -0.51% | |
Dow Jones | 39,935 | +0.25% | |
NASDAQ Comp | 17,181 | -0.93% | |
Russell 2000 | 2,222 | +1.26% | |
Country Indices | |||
UK | 8,186 | +0.40% | |
Germany | 18,298 | -0.48% | |
Japan | 37,869 | -3.28% | |
Hong Kong | 17,004 | -1.77% | |
Euro | 4,811 | -1.06% |
Name | Value | % Chg | |
---|---|---|---|
Commodities (USD) | |||
Gold | 2,364 | -1.42% | |
Silver | 27.88 | -3.53% | |
Iron Ore | 101.80 | +1.89% | |
Copper | 4.0917 | -0.57% | |
WTI Oil | 78.28 | +0.89% | |
Currency | |||
![]() | AUD/USD | 65.54¢ | -0.53% |
Cryptocurrency | |||
![]() | Bitcoin (USD) | 66,006 | +0.98% |
Ethereum (USD) | 3,188 | -4.34% |
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Investment ideas from the edge of the bell curve.
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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.
The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.
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