I used to live in Shanghai.

Right now, it’s the change of season. The streets turn crazy lush and green and warm and we all head outside to munch on Xiao Long Xia (小龙虾) little lobsters. In summer we’re dragging our beds outside to sleep on the footpaths – everyone is in PJs by 5pm.

It’s really starting to look like those days were more halcyon than I realised.

There’s a big cost to these lockdowns – commodities demand is shot, smashed supply chains are backed up – but nothing would suck quite as much as living in Shanghai while being locked-off from everything that it is…

 

To Markets…

Only slightly less sucky than locked-down Shanghai is the benchmark ASX 200 index, which was 0.33 per cent lower just ahead of lunch. The ASX Emerging Companies index was down 0.6 per cent. Wall Street provided skittish traders with a fourth day of totally crappy leads, although the surging volatility was expressed best by some loopy trade on the Nasdaq which closed 1 per cent the better.

China’s lockdowns are the dominant theme, while hopes remain largely unspoken that the looming US inflation read tonight in the States will provide signs that we’ve already hit peak crazy prices. It’s not been fun for the Americans in particular. The last annual beat for consumer prices (CPI) in the US was almost 9 fat per cent. Anything along those lines might cause some real bloodletting.

Energy prices are likely to be a negative for the States’ April’s CPI result.
 

Commodities overnight

Brent crude oil futures fell 3.2 per cent to $103, copper fell 0.5 per cent, gold fell 0.7 per cent, and iron ore fell 2.3 per cent to $128.

So, here at home. It’s wet again on the east coast. It’s wet for oil prices. Iron ore is wet, metals wet and the Aussie dollar is treading water at sub US70 cents, and that’s just wet, wet, wet.

The Westpac-MI Consumer Sentiment delivered a bigger shock in May with the earlier and more aggressive than anticipated start to the RBA’s tightening cycle. In April consumer confidence fell 5.6 per cent on March, Westpac says.

That’s our lowest point since August 2020.

Outside the pandemic, it’s the soggiest confidence hit since June 2015.
 

Can the US regain its economic mojo in the Indo-Pacific?

Certainly former US President Donald Trump had a solid crack at making that answer a definitive f*$k off. Trump masterminded (OK, he signed a bit of paper) the unilateral US dummy-spit across they greater Asia region when the Americans backed the hell out of the Trans-Pacific Partnership (TPP), the kick-ass regional free-trade deal which they flagged in the first place, yielding up the ground to China as the largest economic player in the region.

Now incumbent Joe Biden has announced a post-COVID tour of the facility – he’s booked in a visit to Japan this month, to kick off some shiny new acronym-friendly regional economic framework, according to Japan’s man in Washington, ambassador Koji Tomita.

Biden will then head on to South Korea again, the purpose being advancing America’s “rock-solid” commitment to a free and open Indo-Pacific.

That starts in a week or so and now it seems we’ve chosen sides too, China’s response is what to watch for.

 

ASX SMALL CAP WINNERS

 

Here are the best performing ASX small cap stocks for May 11 [intraday]:

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Galileo Mining (ASX: GAL) has found some Wednesday strut and that’s a weak description for a metals digger which came roaring out of the blocks some 200 per cent higher when markets opened.

GAL says it’s unearthed some very serious palladium-platinum at its Norseman project in WA.

Apparently all it took was six holes at its Callisto discovery to whack right on to a significant mineralised sulphide unit tucked nicely under an ultramafic sill.

Results are in for all but one hole so far, and that baby delivered fat grades at 2.66g/t palladium, 0.41g/t platinum, 0.14g/t gold, 0.48 per cent copper and 0.46 per cent nickel.

The share price has settled a bit and is now just a wee 137 per cent ahead.

 

ASX SMALL CAP LOSERS

 
Here are the worst performing ASX small cap stocks for May 11 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort: