End of Day Report – Wednesday 25 March

0:00Hello, it's Kell on Newman here with the Marcus today end of day podcast. It's the 25th of March. Henry's up on the Gold Coast. I think it is at a Gold Conference scoping out all the latest gossip up there. So you're with me today and it was a big day on the market. We're up 155 points or 1.9 percent. So that's a very big day and that's more than we thought this morning when the spy futures closed. The positive reaction came after it became apparent to investors and market participants at the US could be considering working its way out of this Iranian conflict, down ramping, finding a way out of it and resolving the situation. So some positive sense it came through. We were arguably oversold, it's been a very tough time for the market lately.

1:00So when any sort of positive sentiment comes through, you get a big reaction. One of the hardest hit sectors lately is the Gold sector and they had a very big rally today with the idea that some of that inflationary pressure taking up interest rates will cool off and that's good for gold and bullion was relatively stable overnight. So there's still big cash flows going through those companies. Obviously we hear in Australia that we have the diesel concern still pressing on those stocks but for the moment, considering how sold off they were, investors were happy to step in and take a chance and see how things play out from here. So Gold was the best sector info tech. It's been under a lot of pressure in the last six months. It rallied but not massively, it was up about 1.5 percent. The sources in general were very good. Of course, Lithium stocks did very well. PLS was a standout on that front. I wrote yesterday in the growth section that I thought long term, if the market's willing

2:03to look through about anything to the other side of this conflict, one thing we can all be reasonably confident in is the idea that Lithium, solar or renewable energy in general is going to continue. It was already going to continue anyway because it's the most cost-effective way of generating even with all the issues that everybody knows about. But long term, it's the most secure bet. Everything in the Middle East has changed that equation more in their favor. Energy is getting more expensive and from a security supply line issue countries are going to do everything they can to diverse away from fossil fuels and the Middle East in general. So that's what I wrote yesterday. We've seen to see it play out today. Liantown is another Lithium stock that was up 11.6 percent as well. So we'll see if that can continue. Of course, the bell weather stock of this whole disruption in some ways is quantous. Again, that's been under a little pressure lately.

3:04Again, it still faces the fuel issues. I was reading in the paper at lunchtime that Australia has said to have only supply and tall middle of April and less things and if things don't improve, there's genuine shortages right in front of us. But quantous, regardless, was up 4.3 percent today. So have we finally seen the bottom there? I don't know if I'm game enough to call that, but it's possible one to keep watching. Some, obviously with a big day up too, we've had capital move out of some of those defensive names. So consider like coals and tollshedder, both down only a little bit about half a percentage. But again, there's capital rotating out of stocks, some call, all worse. All these ones that have caught a bit lately with a defensive mindset, we'll let go today to get cash free up, cash in, going into some beaten up names. The Gold Stocks have already talked about, Sam Fire Resources, all another one up, 7.8 percent. Obviously, that's copper and a net wealth group, up to 7.5 percent. So what we will call here a stock market stock, the idea that it will recover along

4:09side, the stock market in general, if that continues. On the losing front, it was the energy stocks that was sold off. Oil was about to close when I got here in the morning at about 104 bucks a barrel. Then of course, as positive sentiment washrew from the Iranian development, oil has sold off. It's gone down into the 90s. I don't think anyone expected that if the straight up humours was closed and had been for a few weeks, so for it to even be anywhere near the 90s. At the moment, it's hovering around $99, so it's still elevated, if you like, and could still go higher if things don't work out, but for the moment, some of the pressure coming out of that space and so energy stocks like beach energy, new hope, their coal and oil and gas, they were down, wood side down, 3.2 percent, sand toss, 2.3. Overall, they all had very good runs, so major concern. If you hold those, there's still got big cash loads going through them, so we could see a little bit more selling depending on events, but overall, energy is still a pretty good

5:11place to be. I think we need to throw it all out after one day. Over in Asia, we've had a bit of a rally, too. I do view Japan as a very important bellweather here because they're very vulnerable to energy disruptions. They import everything. Oil, gas, coal, you name it, they need it, they're up to 1.5 percent today, so again, that's a sign of market confidence coming in and being prepared to bid on Japan, so that's good to see. China, up to almost 1 percent, Aussie dollars slipped under 70 cents, so it's a little bit down. Here at markets today, Henry has what he calls his big bank basket and his big resources basket. The big bank basket was only up 0.7 percent, but the big resource basket was up 2 percent, so BHP and Rio and Fortescue driving those results. Incidentally, iron ore is showing remarkable resilience, contributing what's going on around the world. It's still over 100 bucks a ton. That's very good cash flows for the miners while it continues, which should also say that

6:17as a subsidiary to the oil disruption is that tanker rates around the world are going through the roof because they can't get the fuel and the ships are stranded in the Gulf, so that actually advantages Australia in terms of shipping to China as opposed to West Africa and Brazil, so they may get another kick from that as long as they can keep mining because we do have the diesel shortage here. I read the other day that a 10 cent rise in the diesel price takes off 70 million bucks from Fortescue, so you can see just how dramatic some of those earnings reductions can be as they cost go up. Gold miners also have a big exposure there, so we do have to be careful. The bigger miners have longer supply and probably more ability to procure it than some of the really small mines a little bit more isolated, so it can't be too blasé about what's going on with that. If we look at some of the other, well, I should say smaller stocks, drone shield was up 19%, this is one of the most volatile stocks on the market. It's soars and drops in equal measure, but today was one of the good days, it was up 19%,

7:22so we haven't seen a big move like that for a while, it's been a lot of caution in the market, but there were multiple stocks that were up double digits, Uranium stocks. Funnily enough, Uranium has been one of the more subdued sectors, you think with an energy disruption and all the commentary that we've been reading about Uranium in the last 12 months or even five years, really, it hasn't really done that much, all things considered. Why that is, I can't tell you exactly, but today, pallet and energy was up 11%, and yellow was up 10%, so it could be ongoing opportunity there if the Uranium price decides to move, which is still stuck around that 80 to 90 dollars. Very bad news for a little stock I've followed called amplitude energy. There are small gas producer off the coast of Victoria, they've been doing some exploration. I was about to publish an article about them this morning saying that they had an unsuccessful result for their recent well, and I didn't think it would hit the share price as badly as they would hit previously. That turned out to be wrong, they were absolutely hammered today, and down 36%. So a heavy, heavy sell off there.

8:24That said, look 40 year or two, it's possible if the gas supply situation continues to deteriorate in Victoria that they'll be able to bounce back as the exploration is not their core business. They are actually producing, but a bad day for shareholders today. Another loser as a mask group, that's an interesting one, they were down 8%. They recently announced they were selling their core business, and again, it got heavily hit recently and then rally back up, but it's beginning to weaken, but in some ways they've got rid of their business at the perfect time, because they're largely sitting with a lot of cash coming their way, and they'll be ready to deploy that in whatever future we find ourselves in six months or six to 12 months. So a very interesting day on the market, let's hope the positive trends can continue. I don't know if I'm as confident as the market appears to be, that everything's going to be all okay, but we've got to go with the market, and it's judgment, US futures are up about 1% as I record this, so we'll see if they can hold that game tonight, and we'll

9:29be back in the morning, with the morning code casting, we'll tell you all about the conference that he's been to. Thank you for listening.