The Budget from Hell

This week was all about the budget. I’m sure, like me, you have read a thousand articles about it already and are sick of hearing about it.

But it’s big news when the rules of the game change.

We need to think through the repercussions and take action.

Last week, Charlie and I pointed out that the banks were looking wobbly.

This week, the chair got kicked out from under them.

With investors less likely to turn up at auctions going forward after the negative gearing and capital gains tax changes, credit growth is one obvious casualty.

I am fascinated to see what happens to clearance rates and will be watching them like a hawk.

There is a delay until everything changes, and within the transition period, there could be some unexpected opportunities.

Charlie and I discuss what they are in the Closing Bell video below.

Commodities are also on the move.

I have ignored most metals apart from copper over the last six months. So I was surprised when I pulled up a chart of zinc and saw its great recent performance.

Zinc not on the nose anymore

Source: TradingView

[Click to open in a new window]

Aluminium is also running hard.

Copper is the best of the lot, though. It hit an all-time high of US$6.71/lb during the week.

It is falling hard today, backing off to US$6.37/lb for some unknown reason. Hot US inflation data spiking the US dollar could be the culprit.

So while the Aussie stock market has been weak, with only a handful of up days since mid-April, money is flowing into commodities, and I don’t see that stopping in the short term.

I am still leaning bearish on the market overall, but I will change my mind rapidly if buying comes in and shifts the weekly trend.

It has been tough making much money over the last year as our market thrashes around and goes nowhere fast.

It is a real stock pickers market at the moment, so dive into the Closing Bell video below as we discuss the state of play after the budget from hell. And be sure to join me in Murray’s Trading Room if you want live help analysing stocks that you are in or considering buying.

One of the great things about the trading room is that you get to see the best picks of everyone attending. It is a smorgasbord of great ideas.