Sharp share-price rises by lithium stocks were rare highlights in a down week dominated by investor concern about how high interest rates might have to rise before central banks are confident that they have tamed inflation.
Interest rates are not alone in reaching for the sky. The mighty U.S. dollar is also rocketing up and when it comes to commodity prices the combination of higher rates and a higher dollar can be lethal, as seen in the sliding gold price.
Commodity and share prices edged higher this week as investors waited nervously for interest rate news from a gathering of central bankers in a U.S. ski resort.
BHP’s bid for OZ Minerals was the highlight of remarkably upbeat trading on the Australian market this week as fear of future interest rates hikes faded and M&A became the game to play.
Confidence returned to financial markets this week even as central banks continued to tighten the interest rate screws, with nowhere more positive than Australia’s resources sector, which partied in a wet and windy Kalgoorlie.
Investors looked through this week’s bad news of rising interest rates and declining dividends in the belief that a threatened recession will be short-lived with a sustainable recovery possible next year.
To buy, or not to buy, that is the question dogging investors as they’re swamped with the competing evidence driving volatile financial and commodity markets, with gold leading the way down and copper trying to lead the way up.
Most commodities continued to fall this week, taking share prices with them, including gold, which hit a nine-month low, though gold’s decline of US$70 an ounce to US$1744/oz was offset by an eye-catching increase in deal flow.
It’s a new financial year and with the change comes a time for resolutions. And while this column is not in the business of giving investment advice, there is one sector of the market which investors might overlook to their cost: energy.
Recession speculation flowing from a potentially rapid rise in interest rates dominated the top end of ASX resource stocks this week while at the bottom end, with the aid of a magnifying glass, a handful of winners could be found.
Bargain hunters rushed back into the stock market after this week’s well telegraphed rise of 0.75% in official U.S. interest rates, but whether they got a bargain is yet to be seen because the latest rate rise will not be the last in the cycle.
It’s not yet the hurricane forecast by Jamie Dimon but the first gusts of wind from a darkening global outlook started to buffet Australia this week, rattling investor confidence and waking interest in safe havens, including gold.
The twin negative forces of “greenflation” and “slowbalisation” weighed heavily on investor sentiment and share prices this week, restricting most gains to stocks delivering positive discovery and development news, though even their gloss started to fade.
Buy the dip theory took hold among Australian investors earlier week as they helped the all-ordinaries index claw back 200 of the 700 points lost since early April but by Thursday they discovered the meaning of “dead cat bounce”.
One decent discovery was not enough to totally wash away the negative sentiment that pervaded most sections of the Australian stock market this week, though Galileo Mining’s palladium strike near Norseman in WA went some way to improving the overall mood.
Interest rates rose in the U.S. and Australia this week as expected, but so did the stock market, gold, copper, and most other commodities, which was unexpected, and perhaps an interesting case of premature enthusiasm.
Australian investors crept out of their foxholes yesterday after a confidence-sapping week under a barrage of heavy fire that included news of soaring inflation, slowing growth, rising interest rates and higher taxes
Battery and technology metals led the way up in another short trading week which saw the Australian stock market bump against an all-time high while a number of potentially interesting discoveries and curious value gaps emerged.
The global commodity rush slowed this week as markets prepared for the trading break over Easter but two factors, war and inflation, continued to rattle investor confidence as well as sparking a shift back to the ultimate safe haven, gold.
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