The Brains Trust-2019, page-391

Wall Street was generally weaker overnight although prices did rally in late afternoon. At this stage this decline isn’t sufficient to be able to confidently predict that this rally has ended but as mentioned yesterday, it is all starting to look a bit tired so need to keep careful watch.

The slightly stronger US dollar set the sellers off across all the metals with gold correcting sharply. As I have mentioned previously, gold has tremendous resistance in this band. However, when we consider just how far gold has come since late last year, profit taking is understandable. But as I keep saying, I ultimately have much higher targets on gold. Grains bucked the trend in most other commodities today and finished better. Difficult to follow where the so called trade talks are on a daily basis.

The moves by our main buyer of steaming coal is certainly a worrying development particularly when there are so many other market forces to be taken into account at the moment. At this stage, these latest developments have put a bit of support under the chart but as I keep saying, only holding by a thread. Iron ore on the other hand, looks to have broken that thread. I have mentioned before that one supplier’s force majeure is another suppliers opportunity and this looks to be happening in the iron ore market. However, I do think this disaster in Brazil is likely to have longer term ramifications for the mining industry

Our banks finally stepped up to the plate yesterday and helped keep the Australian market in positive territory. Bit late perhaps.

The latest publicity and market reaction to the pronouncement on interest rates by a well known economist leaves me completely mystified. For months I have been pointing out that the structure in our rates with two year government bonds below 90 day bank bills and ten-year bonds coming right in as well, was a serious warning on the economy. Don’t any of these people check what the markets are saying. Doesn’t matter how many years I have been in this industry, I still never cease to be amazed.