19 November 2018
Where are we in the Cycle?
None of the five PortfolioDirect cyclical guideposts are turned to
‘green’. The cyclical positioning has been reclassified as ‘downswing’ with
global growth decelerating and less supportive monetary policy settings.
Unusually prolonged supply side constraints which have been offsetting the
effect of weak demand growth are losing their impact as newly initiated
production starts to flow in some metal categories.
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Market Directions
Mining and oil and gas stocks finished the week lower as they were
caught up in broader market weakness led by declines in large US growth
oriented momentum stocks. US-Sino trade tensions and fears that the US
Federal Reserve will push interest rates too high in the coming year have
been influential factors in the market direction as the slump in oil prices
was taken to mean a slowing world economy. More...
Portfolio Performance and Positioning
All development stages reflected the weakness in the broader market.
Phase II stocks have been especially vulnerable to the deterioration in
market conditions over the past two months. Phase I stocks have been
relatively strong although Phase I stocks were the weakest of the three
groups in the past week. The relatively large weighting in Phase I
companies, which now have less downside risk due to having been omitted from
the earlier cyclical rally, has been retained. No changes have been made to
the portfolio models.
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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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