26 August 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
decelerating global growth forcing a negative change to expectations, 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.
More...
Market Directions
Monetary policy and trade policy intersected in an unexpected manner on
Friday solidifying the chances of further rate cuts in the month ahead (in
the absence of a dramatic reversal in approach to trade policy by either the
US or Chinese sides). A swing towards safety characterised the week with
investors seemingly ready to entrust their cash to governments without any
compensation for risk. The gold price continued to track bond prices higher.
The copper price once again appeared unresponsive to growing fears elsewhere
about a global growth slowdown. Against the trend in the headline sector
indices, prices of exploration stocks pushed higher.
More...
Portfolio Performance and Positioning
Phase I stock returns ran ahead of those for both Phase II and Phase III
companies as companies in the latter development stages were more likely to
suffer directly from the emerging global slowdown in growth. Phase I stocks
were also displaying stronger leverage to higher gold prices as a result of
having experienced unprecedentedly low share prices. The portfolio has an
elevated cash position and exposure to Phase I companies in recognition of
the ongoing risk of cyclical weakness in metal markets. No changes were been
made to portfolio models.
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.
More...
The 'Steak or Sizzle' blog provides summary judgements on
the top performing ASX-listed resources stocks.
More...