Trader’s diary: everything you need to prepare for the week ahead

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  • Markets fall. The war continues. China is self-suffocating
  • Otherwise boring
  • Sorry, wait: Crypto has gone Lehman-esque

Major Economic Headlines Last Week

Crushed in a sea of ​​volatility, global equity markets have had another choppy and nauseating week with a wave of concerns about monetary tightening against high inflation dragging trade headlong toward what look a lot like icebergs of a possible global recession.

Although local markets had a small rebound at the end of the week, BTD when levels seem oversold.

For the week ending Friday the 13th:

    • wall street down 2.4%
    • EU markets at the top 1.4%,
  • Japan’s Nikkei down 2.1%
  • Chinese markets at the top 2%
  • ASX200 down 1.8% and;
  • The Emerging Companies Index (XEC) down 6.2%

Bond yields retreated from their highs and prices for metals and iron ore fell. Oil rose, but honestly WTF. Concerns about global growth also dragged the Australian dollar lower and the greenback higher.

NAB’s Alan Oster says worries about the risk of a recession in the US or Europe are a bit high.

Here are the main headaches at play:

  • The Ukraine/Russia war, which aggravated already high inflation
  • The rapid shift to a much stricter (forward-looking) central bank policy
  • China’s zero-COVID way to destroy its economy and the implications for domestic consumption, trade and global supply chains

Profits in the United States

More than 90% of US S&P 500 companies have now reported earnings for the March quarter, with 76% beating expectations. Consensus earnings expectations for the quarter have now risen to 11.7% year-over-year from 4.3% at the start of the US reporting season.

Industrials, energy, materials and industrials are experiencing the strongest growth. Earnings growth in Europe and Asia averaged 13.9% year-on-year.

According to AMP Capital, since their bull market highs, US stocks are down 16% and Eurozone stocks are down 15%. Japanese stocks are down 14%, global stocks are down 15% while Australian stocks are down 7%.

While European and Japanese stocks initially fell harder after the invasion of Ukraine, concern has recently returned to higher inflation and higher interest rates, which has really weighed on the market. US stocks with its higher tech exposure. The tech-heavy Nasdaq lost 27%.

The recent decline in the commodities complex has weighed on local markets, but this has been offset by All Ords’ lower exposure to technology.

Stocks could still rebound in the short term from oversold levels. But the risks related to inflation, monetary tightening, the war in Ukraine and Chinese growth remain high and still point to a decline in stock markets before they bottom out.

US inflation

Yes, it’s even better than expected for April. While annual inflation declined slightly – from 8.5% yoy to 8.3% for CPI and from 6.5% yoy to 6.2% for core inflation – it was even higher than expected, according to AMP’s Shane Oliver.

“While inflation may have peaked, it appears to remain too high for the Fed’s (and other central banks’) comfort for some time, while keeping it on track for future rate hikes of 0.5% in the next three meetings,” Dr Oliver added.

Via NAB Trade

Crypto crash

Guess we should be talking about stablecoins and the demise of TerraUSD (UST) at US$0.4. This had a domino effect on demand from the wider sector.

Bitcoin, which UST’s supposedly reliable sister coin (LUNA) and reassuringly named Luna Foundation Guard sold off to try to save/support UST, accelerated the pace of selling.

Crypto, already under pressure, had a week to forget. Bitcoin is now worth less than half of what it was worth during last year’s bull run.

Economic calendar for this week

Australia

TUESDAY
RBA Minutes

WEDNESDAY
April Westpac–MI Leading Index
Q1 Wage Price Index

THURSDAY
April unemployment

Global

MONDAY
April retail sales in China
Fixed Asset Investment in April in China
April industrial production in China
EU March trade balance
United Kingdom May Rightmove property prices
US May Fed Empire State Index

TUESDAY
EU Q1 GDP
United Kingdom March Unemployment rate ILO
April retail sales in the United States
April industrial production in the United States
Business inventories in the United States in March
US NAHB Housing Market Index for May
Fedspeak – Interview with President Powell. Bullard, Harker and Mester also speak.

WEDNESDAY
NZ GlobalDairyTrade (WMP) Auction Price
GDP of Japan in Q1
Japan’s industrial production in March
Read the EU’s April CPI
UK April CPI reading
Housing starts in the United States in April

THURSDAY
NZ Q1 PPI (inflation) read
New Zealand Budget 2022
Machine orders in Japan in March
US Initial Unemployment Claims 203k
Philadelphia Fed May US Index
US existing home sales in April
April US Leading Index

FRIDAY
New Zealand trade balance in April
Japan April CPI
Consumer confidence in May in the EU
Consumer Sentiment UK May GfK
April retail sales in the UK

Sources: Comsec, Westpac, NAB Commerce

Here are the companies listed this week, according to the ASX:

Southern Cross Gold (ASX:SXG)

Registration: May 16

IPO: $10 million at $0.20

This gold explorer is focused on revitalizing the Victorian goldfields, home to Fosterville and Costerfield, two of the richest underground deposits in the world.

The company is a spin-out of Toronto Stock Exchange-listed Mawson Gold, which is now a Nordic-focused gold exploration company that owns the Rajapalot gold-cobalt project in northern Finland.

SXG operates the Sunday Creek, Redcastle and Whroo projects in Victoria, as well as the Mt Isa polymetallic project in Queensland.

Demetallica (ASX:DRM)

Registration May 16

IPO: $15 million at $0.25

Another explorer, this one is a spin-out of Minotaur Exploration (ASX:MEP) targeting gold, gypsum and base metals in its projects across Queensland and South Africa.

The Company owns the Pyramid Gold Project, the Windsor copper-zinc-lead-gold-silver project and the Chimera copper-gold-lead-silver-zinc projects in Queensland.

DRM also owns the Peake and Denision copper-gold, zinc-lead-silver joint venture and the Lake Purdilla gypsum project in South Africa.

“The company benefits from the past decade of intensive mineral exploration and resource definition work conducted by Minotaur,” said Chairman Dr. Roger Higgins.

“Demetallica will continue on this path, focused primarily on copper-gold exploration in Australia.”

Aurora Energy (ASX:1AE)

Registration: May 18

IPO: $8 million at $0.20

This company is focused on the exploration and development of its Aurora project in Oregon, United States.

The project hosts a defined uranium resource and is prospective for lithium. The Company will conduct exploration and appraisal programs to assess the potential of these two minerals.

Bindi Metals (ASX:BIM)

Registration: May 19

IPO: $4.8 million at $0.20

This explorer plans to acquire the Biloela project in Queensland which is prospective for gold and copper.

The company plans to compile data and geophysical surveys on the Flanagans and Great Blackall prospects, followed by a drilling program on both prospects.

TG Metals (ASX: TG6)
Registration: May 20

IPO: $6 million

This explorer is focused on prospective nickel, lithium and gold assets in the Goldfields-Esperance area of ​​WA.

It actually owns the largest land package ever held by a company in the history of exploration in the Johnston Lake Greenstone Belt and claims the area has been historically neglected and underexplored – the Lake Project. Johnston never having been the primary target of the nickel majors that previously held the ground.

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