• The ASX gained 0.5% this week, snapping a three week losing run
  • Healthcare and IT sectors flying the flag, while materials weigh
  • Creso Pharma a standout winner of the Stockhead small cap hamper

 

Despite the obvious impending armageddon looming over global markets like the fabled Heckler and Koch HK416 A5 Assault Rifle of Damocles, local markets continue to display resilience, ignorance or a mix of both.

Friday was no different – commodities got hit during the London session (as recessionary fears took further hold etc), but by the close in Sydney, the benchmark managed to close a smidgen higher, but ending with almost 65% of the top 200 stocks in the green.

Defensive stalwart, the Healthcare Sector claimed best on ground honours (+1.23%) while Technology stocks (+0.1%) and  Consumer Discretionary (+0.65%) did good, ran hard.

For the week the ASX200 gained 0.5%, lifted by tech stocks (+3%) and healthcare (+1.5%).

Materials and Energy (-0.5%) were the only two sectors to close lower, with the major resource players dragging the market lower. Iron ore was ~1% down in Asia and the big three followed,  BHP (ASX:BHP) -0.5%, Fortescue Minerals (ASX:FMG) -0.6%  and Rio Tinto (ASX:RIO) -1%.

Talking commodities, copper stocks were the canary in the recessionary mine and Sandfire (ASXSFR) got trounced for it, shedding well over -5.5%. It’s down about 13% on this time last month.

As Dr Josh Chiat said of his colleague this week, Dr Copper is looking rather peaky.

“It is said the copper price is able to provide a diagnosis of the health of the world economy with its price generally tied to global industrial growth,” Josh said, possibly on a dictaphone looking in the mirror. “We contend this makes it more of a thermometer than anything.”

It must be said, the tres useful metal’s been behaving in a most underwhelming fashion, staggering its way below US$8500/t to a seven-month low this week.

An unperturbed Dr Chiat, in cahoots with doctors Hynes and Kumari from the ANZ , dismiss this as more a bout of flu rather than anything to write home about. Consensus is demand will easily outstrip supply in the near-term. EVs, bottlenecks and the like, apparently.

“As such, we expect copper demand growth to rise to 5.2% in 2023,“ is the diagnosis this week from Hynes and Kumari.

“European and US copper demand is also expected to lift,“ adds Doc Chiat, “driven by rising renewable capacity and EV sales.“

Meanwhile, lithium stocks are living off the fun times, borrowed generously this week from Allkem (ASX:ALK) and its megabucks marriage in the US.  Lake Resources (ASX:LKE) +13.% and Core Lithium (CXO) +5%, the heroes of the Friday dish.

Reuben wrote a fab piece this week on ASX goldies vs the stonking price of bullion. Gold stocks are down circa 10% over Q1. Gold itself is nearing record highs, although this week local players struggled on the weaker bullion price, a theme Market Matters’ James Gerrish believes think could continue in the short-term should the USD build up some muscle.

The ASX gold majors in Newcrest (ASX:NCM) and Evolution (ASX:EVN) fell -2.2% and -2.6% respectively. The mad cats at St Barbara (ASX: SBM) dropped -6.7%.

That said, the signs for gold strength make this year’s rush of a different colour altogether according to Reuben and those noted gold bears at the World Gold Council.

Geopolitical risks and sanctions against Russia have highlighted the importance of central banks maintaining gold holdings, WGC head of Asia-Pacific and director of central banks Shaokai Fan told the deputy editor of this fine publication.

“When sanctions were announced against the Bank of Russia last year, it was really the first time that a major large central bank was sanctioned in this way,” Fan said.

The World Gold Council declared the March quarter this year the best in a decade for central bank purchases.

National reserves added around 228t of bullion, equivalent, Reuben says, to some two-thirds of Australia’s annual gold production and a full-third higher than the previous record in 2013. China bought about 8 tonnes alone last month, according to Xinhua.

Gold was up down another $US6 in Asia today, settling at $US2008 at our close.

Elsewhere Asian stocks were mixed. The Hang Seng in Hong Kong lost over -0.5%, Japan jumped over +1% while mainland China shares gave away -1%.

At the time of writing, Bitcoin was trading at US$26,316.

The best of blockchain fell below the US$27,000 mark on Thursday. It’s a volatile old thing, but worth noting that was its deepest trough since about the Ides of March.

As the Badman has pointed out this week, there’s a number of chronic issues facing crypto markets and not just traumatised investors. There’s low liquidity, a regulatory crackdown gaining pace in the States and the asset seems a bit more exposed to these   macroeconomic headwinds about the place.

Speak of the devil, Disney shares are dragging on Wall Street following an okay earnings report. That’s put a slight mocker on an otherwise solid week in the US. Ahead of Friday trade the Tech Heavy Nasdaq is on track to post its third consecutive winning week.

The Dow and the S&P 500 are heading into Friday looking a little glum, staring down a second straight week of losses.
 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks from 1-5 May:

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

Wordpress Table Plugin

Hats off to the bold Aussie cannabis play Creso Pharma (ASX:CPH), which jumped 25% Thursday, making its weekly gains around 90%.

The company’s wholly-owned US subsidiary, Sierra Sage Herbs, has finalised a new product range of functional (non-psychedelic) mushrooms.

On top of that, Sierra Sage Herbs has also inked a deal to expand its distribution partnership with global e-commerce marketplace Groupon, that connects shoppers with merchants through group voucher discounts and promotions, opening up avenues to significantly increase its market share in the US.
 

ASX SMALL CAP LOSERS

Here are the best performing ASX small cap stocks from 1-5 May:

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

Wordpress Table Plugin

 

Were there any local IPOs this week?

No.

You are welcome to request more information emailing me a stamped, self-addressed envelope, which I 100% promise to ignore until (at least) Monday.

 

Read MoreCannabis

Featured Companies

You might be interested in