Markets continue to be uncertain as choppy conditions continue

Markets continue to be uncertain as choppy conditions continue

It was another mixed bag for the equity market last week as traders and investors tried to make sense of the current rally. With the indices seemingly pausing from their rally the market is still yet to determine if this current momentum is a true reversal and a sign of a potential Federal Reserve pivot or just another Bear trap. This created a choppy week for the major indices with the Dow Jones finishing down 0.01%, the Nasdaq down 1.06% and the S&P 500 down 0.69%. The ASX200 followed suit dropping by an insignificant 0.09%. Like the Dow Jones, the XJO is sitting near its long-term resistance as it determines which direction it will go next.

In the commodities market gold reached a short-term top of $1750 USD per ounce after its spike the prior week. On the other hand, Brent Oil suffered its worst price drop since August as the price fell by 8.00% to $87.49 a barrel. All eyes continue to be focused on the cryptocurrency market as exchange, FTX, filed for bankruptcy sending shockwaves and heightened volatility to the growth market. As the fallout continues and other Cryptocurrency entities become embroiled the impact continues to be felt far and wide.

Australian Stocks in the Spotlight

OZ Minerals, (OZL)

The mining company that produces critical minerals for electric vehicles including, nickel and copper has been the subject of multiple takeover attempts by giant, BHP. BHP had originally offered to take over the company at $25.00 per share which was knocked back by the board of OZL. However, with a revised offer of $28.95 per share which values OZL at an enterprise value of $9.6 Billion, the OZL is set to recommend the revised proposal to its shareholders. The deal will provide BHP with more exposure to the EV sector as it looks to diversify its critical mineral holdings. The OZL share price closed the week trading at $27.34.

Fortescue Metals, (FMG)

Andrew ‘Twiggy Forrest’s mining company has seen a recent spike in its share price as the underlying Iron ore price has bounced in recent weeks as hopes for an easing of Covid restrictions in China continue and the USD weakens. Furthermore, in the last week, FMG announced its plans to decarbonising its operations and to produce green hydrogen and ammonia in Indonesia. Forrest noted how this pivot may aid its operations in China, “The Chinese steel industry is many times the scale of Indonesia and has significant issues,” implying the opportunity to utilise the new technology in China. The share price rose 12.39% for the week to $19.96 which is its highest level since June.

Lovisa Holdings, (LOV)

The Jewlery company has seen its share price reach all times highs in recent weeks after a positive trend update. The retailer announced that its total store sales were 60% higher than the previous year. The company has also been committed to opening more and more stores with the company now having 676 shops in 26 countries. With new countries set to come online in the next few years, LOV is making clear its intentions for global expansion. LOV’s share price is currently, trading at $23.85 and is up 18.72% for the year.

Weekly Ex Dividend dates

21 November

KPG – Kelly Partner

ELD – Elders

MBLPD – Macquarie Bank

22 November

AMC – Amcor Plc

SDG – Sunland Group

TWD – Tamawood

23 November

EVO – Embark Education

USQ – US student Housing REIT

24 November

TER – Terracom Ltd

ALQ – ALS

AVG – Australian Vintage

WHF – Whitefield Industrials

NUF – Nufarm

Key Economic Events -Australian Eastern Standard Time

Tuesday

6:00pm – AUD RBA Gov Lowe Speaks

Wednesday

12:00pm – NZD Official Cash Rate

12:00pm – NZD RBNZ Monetary Statement

12:00pm – NZD RBNZ Rate Statement

1:00pm – NZD RBNZ Press Conference

7:15pm – EUR French Flash Services PMI

7:30pm – EUR German Flash manufacturing PMI

7:30pm – EUR German Flash Services PMI

8:30pm – GBP Flash Manufacturing PMI

8:30pm – GBP Flash Services PMI

Thursday

1:45am – USD Flash Services PMI

6:00am – USD FOMC Meeting Minutes