Current Market Analysis

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 19/06/2023 US public holiday (for Juneteenth) 20/06/2023 US Building Permits and Housing Starts 21/06/2023 UK CPI; Canadian Retail Sales; Jerome Powell Congressional testimony (House Financial Services Committee) 22/06/2023 Swiss National Bank monetary policy; Bank of England monetary policy; US Weekly Jobless … Continued

The Bank of Canada paused its rate hiking cycle in January but then hiked rates at its last meeting. The Royal Bank of Australia paused in April but then had to start hiking again in June. The Fed also paused at its June meeting or at least skipped a rate hike. This was the case … Continued

After being much touted in the previous meeting and successive hawkish rhetoric from ECB President Lagarde in recent weeks, the ECB has hiked its rates corridor by 25 basis points. That much was expected. However, this is still being seen as a hawkish hike amid a sharp increase in inflation projections. If this runs true, … Continued

Inflation continues to fall in the US. The CPI for May has shown that as the sharp jump in price over the first half of 2022 continues to drop out of the data, inflation is decisively falling. This disinflationary path leaves me questioning the Fed’s next move after the pause in the FOMC hikes in … Continued

UK economic growth is pretty anaemic. Headline inflation has only just dropped below double digits. Some would arguably point to the economy going through a period of stagflation. Despite this, the performance of GBP continues to stand up strongly against other major currencies. The Bank of England is having to prioritise inflation reduction in its … Continued

International Airline Group’s (LON:IAG) – or as we all still call it, BA – next results come out on 28th July. We’ve just had their Q1 results here. Things are obviously getting better, the recovery from Lockdown is happening. But what we really want to know is how far is that comeback going to go. … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 12/06/2023 N/A 13/06/2023 UK Unemployment and wage growth; German ZEW Economic Sentiment; US CPI 14/06/2023 UK monthly GDP; US PPI and Federal Reserve monetary policy 15/06/2023 Australian Unemployment; Chinese Industrial Production & Retail Sales; European Central Bank monetary policy; US Retail … Continued

With five major central banks giving monetary policy decisions in the first half of June, this is a period that could shape the outlook of forex markets for the weeks to come. There is a key theme that is emerging, with hawkish surprises coming from both the Reserve Bank of Australia and the Bank of … Continued

US equity markets have broken out to multi-month highs. The reasons to not be positive (or perhaps even outright bearish) are still prevalent. Yet, investors still seem happy to climb a wall of worry. Since October, the S&P 500 futures have rallied from a shade above 3500 to hit levels above 4300 this week. However, … Continued

Bidstack’s share price no longer comes close to representing the fundamentals. But investors will need patience. I last covered Bidstack (LON: BIDS) in mid-December 2022, hailing the video game advertising company as ‘one of the best undervalued tech stock opportunities to consider in 2023.’ As neither a mining company nor a biotech, BIDS is one … Continued

Gold has been corrective over the past month. This has come as the US dollar (USD) and US Treasury yields have rebounded. The two big factors that are historically so crucial the near to medium-term outlook for gold remain the key drivers right now. Subsequently, with the USD rally starting to falter, the corrective move … Continued

C3.ai (NYSE.AI) and Nvidia (NASDAQ: NVDA) are the two major stocks that people are using to bet on the AI revolution. As Paul Graham points out, this might not be the best set of possibilities: “AI is the first big new wave of technology we’ve had since start-ups started going public much later. The result … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 05/06/2023 S&P Global Services PMI global data and from US ISM Services PMI, US Factory Orders 06/06/2023 Reserve Bank of Australia monetary policy 07/06/2023 Australian GDP; China Trade Balance; Bank of Canada monetary policy 08/06/2023 US Weekly Jobless Claims 09/06/2023 China … Continued

Darktrace (LON: DARK) has long had a rather fragile share price. In part this is simply because it’s something of a hot, go-go, stock and therefore any contrary news hits the price hard. When prices are based on dreams and assumptions about the future then anything that deflates the balloon hits hard. As we’ve noted … Continued

Eurozone inflation was lower than forecast in May. Core inflation fell to 5.3% in a move that saw two consecutive months of declines for the first time since mid-2021. With GDP faltering this will mean that the ECB will be more cautious in hiking rates aggressively from here. This is likely to weigh on the … Continued

Premier African Minerals has achieved something that few thought possible – brought a patch of bush into lithium concentrate production in under 8 months. That really is remarkable and they have indeed achieved that at the Zulu Project in Zimbabwe. They’ve also got a horrible, horrible, financial problem here. It is about, vaguely, possible that … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 29/05/2023 US Memorial Day and UK Spring bank Holiday, markets closed 30/05/2023 Eurozone Sentiment; US Consumer Confidence, Dallas Fed Manufacturing Index 31/05/2023 Japanese Retail Sales and Industrial Production; Chinese PMIs (official); German inflation; Canadian GDP; US JOLTS jobs openings 01/06/2023 Final … Continued

The AIM index has always been a poor performer. It’s the star players you need to keep an eye on. As a long-term investor in small cap FTSE AIM shares, I would say that sentiment on the UK’s growth index feels a tad negative. Maybe it’s just me? The index is down 17.3% over the … Continued

The Bank of England (BoE) is facing an ongoing battle against inflation. Despite interest rates having been aggressively hiked to 4.50% as headline inflation reached double digits, there is more work to be done. Today’s announcement of inflation for April suggests that the work could be considerable. The likely need for further rate hikes (yes, … Continued

PREM is just the latest example of why it’s so essential to read the details. Premier African Minerals (LON: PREM) pulled a little trick last week that should be used as the poster child for why we should always, but always, read the details. PREM had a rights issue. Well, nothing wrong in that, they’re … Continued

Gold has been a consistently solid investment over recent months. However, the shine is beginning to be taken off the performance. The drivers that have allowed gold to outperform other metals (that are deemed to be a higher risk) are starting to dissipate. This is leading to a retreat which could drag the gold price … Continued

MNK was up 435% on Friday – this is option-like price movement. Mallinckrodt (NYSEAmerican: MNK) jumped 435% on Friday. Which is the sort of price behaviour we expect from options, not from major corporations. The reason for the volatility – not for the price movement, the volatility – is that in effect MNK stock is … Continued

Oil rebounded yesterday as traders have taken progress in the talks over the US debt ceiling as a positive for market sentiment. This near-term boost may still have legs to run, but the path to sustainable upside looks restricted. There is a whole catalogue of mixed signals impacting the oil price right now, but for … Continued

The mechanics, the politics, McCarthy, and why it really is different this time. Every so often, the prospect of a US default rears its ugly head. The common wisdom is that the government will always push through some kind of ‘fudge,’ an unhappy middle ground that keeps the can kicking down the road. And usually, … Continued

This has been a tough period for metals prices in the commodities sector. As so often has been the case, there is a key link between the performance of the USD and that of metals prices. However, with risk appetite and the USD playing a role, this is also meaning that there is a safe … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 15/05/2023 Eurozone Industrial Production 16/05/2023 Chinese Industrial Production & Retail Sales; UK Unemployment; Eurozone Trade Balance; Eurozone GDP (2nd); German ZEW Economic Sentiment; Canadian Inflation; US Retail Sales & Industrial Production 17/05/2023 Japanese GDP (Q1 prelim) & Industrial Production; Eurozone HICP … Continued

The oil price has been swung around like a rag doll in the past couple of months. The focus on supply factors has been shoved aside as traders have fretted over the outlook for oil demand. Concerns over an impending recession in the US have dominated the narrative. However, this may have become overdone for … Continued

Atlas Lithium (NASDAQ: ATLX) could be one of those rare and truly grand investing opportunities in the junior mining space. Someone does, after all, have to find the motherlode sometimes otherwise where would the very phrase come from? One the other hand it’s possible – as some allege – that Atlas Lithium is an over-hyped … Continued

Equity markets had a strong run higher in March and April. However, moving into May the rallies are looking tired. Macro factors are starting to weigh on sentiment ahead of crucial monetary policy announcements from the Federal Reserve and the European Central Bank. Sentiment is threatening to sour and this could mean a period of … Continued

Copper demand will skyrocket this decade. Supply is falling, and inventories are at near-record lows. For the long-term investor, it’s merely a waiting game. In early November 2022, I wrote up an article covering the growing consensus surrounding the emerging copper supply gap. Simply put, copper demand is growing exponentially, and supply is drying up. … Continued

Things do sometimes go wrong, as WANdisco (LON: WAND) and Alphawave (LON: AWE) have just shown – with an able little assist from Altyngold (LON: ALTN). More specifically things sometimes go wrong with the accounting within a company. As is the case with all three of these. However, sometimes – just the sometimes – there’s … Continued

First Quarter GDP increased at only a 1.1% seasonally adjusted annual rate. That was down from 2.6% in Q4 of last year, which was down from 3.2% during Q3. Despite the clear slowdown in economic growth, there still exists a battle between Wall Street’s soft-landing narrative, where inflation comes down in the context of robust … Continued

A near-term correction is building on gold. Since peaking at $2039 in mid-April, the gold price has been pulled lower. It is currently trading around three-week lows, with cash gold trading decisively back below the psychological $2000 level.   However, this looks to be a near-term move that is likely to be the source of … Continued

Atlantic Lithium (LON: ALL) is one of those shares that justify the AIM market in London, or the similar parts of the TSE and Vancouver exchanges. There needs to be somewhere that junior (ie, not yet producing) miners can go get the necessary capital. Someone, somewhere, has to pay for the exploration and proving work … Continued

CXApp (NASDAQ: CXAI) was quite the exciting stock last week, jumping from $1.33 to, at one point intraday, $50 or so. It fell off from that, obviously enough. Quite why the massive excitement no one is really quite sure. A recent Spac deal it does something with AI and perhaps that’s enough to get the … Continued

The former Soviet state is toeing a delicate line between Russian politics, Chinese protections, and European energy concerns. Uranium is in many ways like lithium. It’s non-fungible, very reactive, and for many years was unprofitable to mine out of the ground. But with nuclear power becoming much more acceptable as a ‘green energy’ source, and … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 10/04/23 Easter Monday holiday, UK and European markets are closed; Fed’s Williams speaks 11/04/23 China CPI; EU Retail Sales; Fed’s Harker speaks 12/04/23 Fed’s Kashkari speaks; US CPI; BoC interest rate decision and statement; FOMC Minutes released 13/04/23 Australian Employment report; … Continued

OPEC has played this particular gambit before. It didn’t work then, and it won’t work now. Brent Crude — the North Sea oil benchmark — traded for an average of circa $70 per barrel in 2021, $42 in 2020 (when oil went negative for the first time ever), and $64 in 2019. BP CEO Bernard … Continued

Inflation, Sino-Western tensions, falling ore quality and excess plant capacity are all creating a flourishing mergers and acquisitions environment. As an investor in multiple LSE-listed mining small caps, and an analyst of the larger titans, I have a fairly wide view of the mining industry. And the key thing I keep coming back to is … Continued

Explaining the value interplay between Gold, Bitcoin, the US Dollar, and defensive stocks in simple layman’s terms. When monetary policy is loose, interest rates are low, and growth is cheap. In this boom phase of the economic cycle investors often pile their capital into tech stocks, which thrive on the waters of cheap debt. However, … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 20/03/23 Japan Vernal Equinox Day markets closed; no data of note 21/03/23 RBA Meeting Minutes; German ZEW Survey; Canadian CPI 22/03/23 UK CPI; US FOMC Interest Rate Decision, Projections and Press Conference 23/03/23 SNB and BoE Interest Rate Decisions 24/03/23 UK … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 13/03/23 US switched to Daylight Saving Time on Sunday 12/03 14/03/23 UK Employment report; US CPI   15/03/23 BoJ Monetary Policy Meeting Minutes; China Retails Sales; EU industrial Production; US Retail Sales  16/03/23 Australian Employment report; ECB Monetary Policy Decision, Statement and … Continued

Macroeconomic/ geopolitical developments Global financial market developments Key this week Date Key Macroeconomic Events 06/03/23 EU Retail Sales 07/03/23 RBA interest rate decision; Jerome Powell testimony to Congress 08/03/23 German Retail Sales; EU Employment and GDP; ADP Employment Change; Jerome Powell testimony to Congress; BoC interest rate decision 09/03/23 Japan GDP; China CPI 10/03/23 BoJ … Continued

Government policy has always been designed to support the housing market. Until now, that is. After spending most of 2022 warning that a UK house price correction was on the cards — please read here for some light reading  — it appears that institutions are finally on the case. Lloyds, the UK’s largest mortgage lender, … Continued

We’re just going through the British bank reporting season and everyone’s profits are up. So, therefore British banks must be a good buy, right? Quite possibly, yes, but it’s important to understand that there’s a temporary feature to a part of this profits rise. The interest rate margin only keeps increasing if interest rates keep … Continued

So, this electronic revolution is going to make rare metals soar in price and stay up, right? Those battery metals – cobalt, lithium – and the rare earths for the magnets, they’re stonking to the Moon and no mistake, undoubtedly. Except metals markets don’t in fact work that way. Sure, demand changes, prices change, but … Continued