Why won’t the ASX 200 move?

Like the protagonist of The Princess Bride in a basement torture chamber – the ASX 200 was “mostly dead” all day.

Since the start of the year, the ASX 200 [XJO] chart looks like a flatlining heartbeat:

Source: Tradingview

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And the index is currently producing a dead-as-a-doornail negative return of 0.02% since the New Year.

Meanwhile, the US market is ripping up the charts, despite the US military’s recent flirtation with pursuing a land war in Asia (Iran):

Source: Tradingview

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With a +10% return over the same period, the US market might be a bit like Andre the Giant’s character, saying, “It’s not my fault being the biggest and the strongest.”

But the discrepancy between the two markets is hardly inconceivable.

Domestically, we’ve got an ailing economy, a dastardly rewrite of the tax rules and a regulatory regime that has handcuffed even our most promising energy and mining projects to the wall.

Nobody withstands the machine

The AI buildout is clearly putting a rocket up the US market in what appears to be an inexorable rise.

And the US has a new Federal Reserve Chair in place, tantalising investors who want to see rate cuts.

There’s the prospect of a SpaceX-Tesla merger rolling into a monster IPO, ChatGPT is on the brink of its own public offering, and Anthropic, which is staying private for now, is valued at nearly US$1 trillion.

If you are an Aussie investor with limited exposure to US shares, it’s nothing but tumbleweeds and the torture of watching paint dry:

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So what does the ASX need?
It would take a miracle…

Well, not quite.

Beneath the surface, the commodities beast is getting stronger.

Just check out this “treemap” of the 1-year performance of the commodities universe:

Source: Trading Economics

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Pretty much nothing but green.

That should be good news for the ASX 200 and even small-caps and micro-caps eventually.

Our ASX protagonist might well be revitalised in the second half of the year.

And I suspect commodities will do most of the heavy lifting.

So don’t fall into the pit of despair.

There is a way out. And our in-house geology and mining guru, James Cooper, just might have the key.

I’m seeing some stellar performance across his portfolio in Diggers and Drillers, and you can learn about what he’s calling “The Great Race” right here.