In today’s briefing:
- A Big Bear, or Just A Plain Vanilla Correction?
- Investors Have that “Oh Sh#t Moment” – Part 2: Trading Opportunities.
- US Embraces Modern Mercantilism Via Higher Tariffs to Boost Capital Accumulation
- Fenix Resources (FEX AU): Highlights From The Ignite Investment Summit
A Big Bear, or Just A Plain Vanilla Correction?
- The latest Trump tariff announcements have sparked a risk-off stampede.
- Even though the macro and fundamental backdrop is deteriorating, sellers are becoming exhausted and a relief rally should materialize in the coming week.
- Both the top-down outlook and technical structure of the stock market argue for a bear market, and any rally should be interpreted as a countertrend move.
Investors Have that “Oh Sh#t Moment” – Part 2: Trading Opportunities.
- Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.
- This will be a rebound bounce to sell into, as we are not going back to previous highs.
- Looking at companies servicing high-income consumers is a good hunting ground for shorts.
US Embraces Modern Mercantilism Via Higher Tariffs to Boost Capital Accumulation
- President Trump’s announcement of reciprocal tariffs has shocked equity markets, creating comparisons with President Nixon’s shock decision in 1971 to suspend the dollar’s convertibility into gold.
- Markets initially betted that Europe would enjoy faster growth due to the arrival of tariffs and higher defence spending, but Europe still remains heavily reliant on net exports, particularly Germany.
- The US will win a trade war versus Europe due to a large loss external demand, while the US has joined China in pursuing modern mercantilism to enhance sovereign power.
Fenix Resources (FEX AU): Highlights From The Ignite Investment Summit
- Executive Chairman John Welborn presented the investment case for Fenix Resources (FEX AU) at the Ignite Investment Summit in Hong Kong on March 26th/27th.
- The company’s imminent production of 4 million tons of iron ore (~$100 USD/ton), is projected to generate AUD 200 million in operating cash flow, matching its current market capitalization.
- The company briefly touched on its M&A opportunity with Coziron Resources (CZR AU), which is expected to add 40 million tons of reserves and further increase production.
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