25 March 2019
Where are we in the Cycle?
Of the five PortfolioDirect cyclical guideposts, two are ‘red’ and three
‘amber’. The cyclical positioning has been classified as ‘downswing’ with
global growth decelerating, a loss of output momentum in China, the largest
national user of metal, and less supportive monetary policy settings than
have prevailed for most of the post-2009 period.
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Market Directions
Equity markets finished the week moving lower as a partial inversion of
the US yield curve raised fears about the likelihood of a recession. The
yield curve change, although it comes with an uncertain connection to growth
outcomes, was added pressure for a market already becoming increasingly
anxious about the outlook for global growth. Mining sector equities and
their related commodity prices have remained surprisingly resilient against
the deteriorating economic backdrop. More...
Portfolio Performance and Positioning
Established producers once again performed better than exploration
companies although the magnitude of market moves within each of the
development stages was modest. Companies which had earlier failed to meet
development milestones have tended to be the better performers over the past
four weeks as they have turned expectations in their favour Uranium related
investments featured among the best performers in the past week. After
several portfolio changes at the beginning of March to reflect relative
performance outcomes, no further changes have been made.
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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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