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Note from the MD: Aussie markets falter as US contends with lines, targets and bears

March 9, 2022

Note from the MD: Aussie markets falter as US contends with lines, targets and bears

Yesterday marked the third consecutive day of losses on the ASX, with the benchmark ASX 200 (ASX: XJO) finishing down 0.8% after a choppy start that looked like it could have gone either way.

Yesterday marked the third consecutive day of losses on the ASX, with the benchmark ASX 200 (ASX: XJO) finishing down 0.8% after a choppy start that looked like it could have gone either way.

Still, those losses weren’t as dramatic as the bloodshed on Wall Street overnight on Monday, which saw the Dow Jones hit its first correction in two years and pushed the Nasdaq into a bear market.

Even so, the latest measure of business confidence shows businesses are feeling more optimistic about their situation – we’ve certainly had a lot of businesses come knocking at our doors recently.

The UK and US have imposed more sanctions and banned Russian oil and other energy imports over the invasion, which is set to cause a massive blow to Vladimir Putin’s war machine. 

While Russia has set up multiple large-scale factories arocess the country to accommodate these sanctions, what they have failed to understand is the global input required for these facilities to be operational and actually produce final goods.

There are even reports emerging of Russian citizens buying up luxury goods as a store of value, hoping items like watches and jewellery will hold their value better than cash as the economy tanks, with ratings agency Fitch this morning cautioning that a default is imminent.

Meanwhile, gold prices on Monday surged past US$2000 a troy ounce for the first time in 18 months and continued climbing on Tuesday as investors turned to safe-haven assets amid the market rout.

Russia’s gold supply is one of the few remaining assets that Putin can use to keep his country’s economy from falling even further, US Independent Angus King told Axios. “By sanctioning these reserves, we can further isolate Russia from the world’s economy and increase the difficulty of Putin’s increasingly costly military campaign.”

We are seeing volatility within the market again. For our options traders, it opens up many more opportunities. Technically, in February the momentum on XJO swung to the sellers for the first time since early 2020 when COVID-19 hit.

We have an IPO opportunity issued by Far East Gold – an Australian junior explorer that owns six gold and copper tenements with ready-to-be-drilled targets and ‘bonanza grade’ gold prospects. The company is led by some of the biggest names in Australian mining, including Justin Werner of Nickel Mines (ASX: NIC). The opportunity is closing on 16th March, and has had strong interest already. Click here to download the prospectus and to submit the application form; ensure you carefully consider the information within before making a decision to invest.

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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.

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