Note from MD: US debt once again an issue as investors look to gold

US national debt has hit US$33 trillion for the first time in history, and the country is once again less than two weeks away from facing a potential shutdown over a lack of funding. Congress is at a standstill over the issue, and markets are again observing the negotiations take place and assessing whether portfolio adjustments into safe havens need to be made.

US national debt has hit US$33 trillion for the first time in history, and the country is once again less than two weeks away from facing a potential shutdown over a lack of funding. Congress is at a standstill over the issue, and markets are again observing the negotiations take place and assessing whether portfolio adjustments into safe havens need to be made.

The VIX is still trading at historically low levels, sitting around the 14 mark. The S&P 500 is making its way towards 4,500 and seems to be holding up well, while the ASX has slightly petered off over the past week and is trading around 7,160.

Back in May when US debt was at the forefront of everyone’s mind and the issue was threatening to grind the American economy to a halt, there was a mad rush of discussions around shifting out of US treasuries and into the world’s oldest safe haven – gold

Since then, the S&P 500 has lifted over 8% and investors are hoping that further positive CPI data will give the market hope that there will be some ongoing stability in monetary policy.

Private equity groups seem to be wading further into sectors that are slated for large government funding packages that are expected to fuel growth over the next decade, with healthcare and aged care being two popular options. 

Estia Health Limited (ASX: EHE) was just snapped up by private equity giant Bain Capital in a deal that valued Estia’s equity at $959 million. The $3.20/share all cash offer is a 50% premium to EHE’s share price of $2.14, before takeover speculation (21/3/23).

Ramsay Health Care’s $180 million extension and revamp of the Warringal Private Hospital in Heidelberg, Victoria is progressing as well, with the facility set to double in size to a 290-bed hospital and will incorporate a new emergency department. The first stage will be completed by mid next year, and comes hot off KKR & Co Inc’s failed $20 billion bid for the ASX-listed group last year.

The XJO gave back most of its gains that it put on during Friday’s trading session, and it is now comfortably trading around 7,170. It is still well above both its 52 week low of 6,411, and its 13 week low of 6,998

The Australian CPI was 6% for the June quarter, with the monthly indicator showing 4.9% in July. The September quarterly update is approaching, and another RBA meeting will be held on October 3. The XJO was sitting around 7170 just before midday – a noticeably lower than its 200 day weighted moving average of 7239  bit lower than its 50 day weighted moving average of 7237. The index’s 52 week high currently stands just over 7567.

Reach Markets provide sophisticated, professional and institutional investors with placements, convertible notes, pre-IPO and IPO investment opportunities. Our ability to deliver corporate advice, deal structuring and reliable growth capital is allowing us to secure access for our network to invest alongside some of Australia’s best known investors.

We have some interesting opportunities in the rare earths, gold, technology and healthcare industries in the pipeline. Click here to be on the shortlist and receive updates as they become available.

You should only act on the information we provide if you are confident that you fully understand what you are doing. Past returns do not always indicate future returns, and it is also possible to make significant losses. There is always a risk of loss when investing.

 

This Week’s News

News

22 November 2023

Rare Earths Industry Review: Part 2

News

22 November 2023

Rare Earths Industry Review

News

22 November 2023

World first left ventricle heart failure device gears up for approval

General Advice Warning

Any advice provided by Reach Markets including on its website and by its representatives is general advice only and does not consider your objectives, financial situation or needs, and you should consider whether it is appropriate for you. This might mean that you need to seek personal advice from a representative authorised to provide personal advice. If you are thinking about acquiring a financial product, you should consider our Financial Services Guide (FSG)

including the Privacy Statement and any relevant Product Disclosure Statement or Prospectus (if one is available) to understand the features, risks and returns associated with the investment.

Please click here to read our full warning.