Good afternoon
Trump is now blaming the WHO for the “Chinese” virus…I have to say, that he is playing the media very well, if you assume, that at least 50% of the audience is stupid or very stupid!!
US- sales of fire arms at record high!
Market strategists are very divided in their opinion, understandably: While some are warning of the medium term effects and potentially a second, bad leg down, others like BofA have published very bullish forecasts. I think am with the latter camp - markets are as awash with liquidity as never before, and the corona-related lockdowns will reduce over the next month or 6 weeks. The world will start turning again, with lots of money looking for a home. And the rich will become richer…( well, as an equity market investor, I hope so…but it will take a terrible end, if this continues…)
As I said before - the biggest risk is coming from the regulatory and political side to this view - and this will probably take a bit longer to be evident, So for now, and the next few month until year end, I think one should be positioned for strong equity markets around the world - certainly with continuing volatility!
Metals have held up pretty well in all of this - trading into the cost-curve already in all metals, and we are seeing quite a bit of supply being lost due to corona-related closures etc. The upswing in the 3rd Quarter could be massive . Remember, though, that you have to increase sales by 43% to be back at where you started, when you have lost 30% before! All expansion plans in the resources industry for the medium term have been put on hold! And last but not least, inflation might well come back, supporting the asset class.
All of the above should be good for gold….and we are seeing all these strange things happening in physical- as well as future-markets, ETF´s etc., probably heralding a shortage of the stuff!
Australia is holding up well on several fronts: The government reacted fast and quite massively on fiscal measures, as well as on lockdown - resulting in what seems to be a well contained virus-outbreak, with very low new infections for the last few days, a relatively strong equity market, and a very strong A$. Again - the A$ might well be a good indication of positive things to come in resources!
Europe fails to come up with a plan to help the weak countries - putting some pressure on equity markets here.
Sheffield - Quarterly out today…The company is cutting costs, where they can. The current cash position of 7,7 mill A$ should see them through until Feb 2021. The share price has cratered from 1,20 A$ to 11ct…but the project has not changed - nor have the positive longer term fundamentals of the zircon market. I am not 100% sure yet, what happened here - weather bad luck, bad timing , or bad management. Possibly a bit of everything! Hard to believe, as the shares are trading down here: I have no reason to believe, that this has suddenly become a bad project! The company has started working on smaller, and hence lower capital intensive plans to bring Thunderbird into production. Buy straw-hats in winter!
Genex - Funny numbers today in the stock…; When they announced, that the offtake agreement had fallen through a few month ago, the stock fell out of bed - from 27ct to 16.5ct. A few days ago, the company finally announced the offtake - and the stock has now recovered to 16,5ct! That´s how markets can change! Hardly any change of fundamentals only leave one option, in my opinion…GNX are a good buy !
Chalice - are suspended again! Drilling results from their new hot project, Julimar, are pending….Announcement expected the day after Easter!!!
Have a nice evening
WS