11 June 2018
Where are we in the Cycle?
Uncertainties over trade restrictions are now putting corporate
investment decisions at risk at a critical juncture in the cycle as supply
constraints, monetary conditions and exchange rates become less supportive
of cyclical progress. Weak productivity outcomes among advanced economies
and structural impediments among developing economies were evident headwinds
to the advancement of an already mature cycle.
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Market Directions
A rebound in metal prices was helped by signs of US dollar weakness for
the first time in several weeks. European political instability seemed to
ease, a Korean peninsula summit was proceeding and hope remained for a
US-China trade rapprochement but anxieties about developing economy growth
persisted. Resource sector equity prices were generally higher with the
smallest stocks in the sector making up some lost ground from recent weeks.
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Portfolio Performance and Positioning
In line with the broader market, the smallest stocks in the sector led
returns in the portfolio models over the past week with Phase I uranium
exposed stocks showing unusual strength. The macro portfolio remains tilted
toward the smaller end of the market and advanced exploration efforts where
there is less correlation with broader equity market conditions.
Modifications to the portfolio models reflected relative price movements. A
significant cash position remains. More...
Stock Reviews and Rating Analysis
PortfolioDirect rating reports analyse the quality and risk
attributes of proposed mineral developments. Rating criteria apply to mining and oil and gas stocks at any stage of
development. PortfolioDirect uses a five point rating
scale to measure the risk adjusted quality of proposed mineral developments
or companies.
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The 'Steak or Sizzle' blog provides summary judgements on
the top performing ASX-listed resources stocks.
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