25 June 2018
Where are we in the Cycle?
Weak productivity outcomes among advanced economies and structural
impediments among developing economies are evident headwinds to the
advancement of an already mature cycle. Uncertainties over trade
restrictions are putting corporate investment decisions at risk at a
critical juncture. Supply constraints, monetary conditions and exchange
rates, important price props, have become less supportive.
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Market Directions
Industrial metal prices were falling at the end of the week as macro
influences once again caused prices to converge. Larger mining stocks led a
move down although the smallest stocks in the sector have continued to lag
over the course of the cycle. Precious metal prices broke previous trading
bounds. Crude oil prices rose sharply after a less than expected production
increase was foreshadowed by OPEC but the reaction of related equities to
higher prices has once gain been muted. More...
Portfolio Performance and Positioning
Prices fell across all development segments during the week with the
smallest falls among the Phase II companies. The net movement to date for
June has been below average. 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. No changes to the
portfolio models have been suggested. A modest cash position remains.
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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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