Gold! Gold! Got You…. – Fat Tail Daily | Australian Markets

Three issues I’m fascinated by right now…

1) On Friday, Murray Dawes and I launched the latest episode of our Closing Bell podcast.

Here’s me banging away…

You can test it out under in case you like.

I carry it up for an additional motive. Every Monday I’ll examine how many views every episode obtained.

We can guarantee you of one thing. The episode will get a increased quantity if ‘gold’ is within the title than some other matter.

Australians are drawn to gold in the identical approach Americans are drawn to oil. Big money can come from a huge discover, or bull run within the sector.

And now gold stocks are sizzling. They have a lot of fuel to keep going. It’s natural there’s high curiosity round gold.

However, it’s at all times fruitful to take a look at concepts that almost all people aren’t paying the slightest consideration too.

There’s at all times prone to be higher worth when no one is even pondering, not to mention bidding strongly on an concept – but.

I’ve one for you right now…

2) It begins with a heads up from the Closing Bell…

In final week’s episode I identified that I imagine the RBA desires increased home costs to assist the home economic system and shopper confidence.

Michele Bullock says that home costs are a matter of provide and demand, and subsequently out of her remit.

Piffle!

The strongest explanatory issue for home price growth is bank lending. Bullock pretends this isn’t the case for a motive.

The just one that is smart to me is that increased property values give center Australia a kick into gear. The RBA can offset worldwide weak point this manner.

That places cyclical corporations uncovered to shopper spending on a stronger footing.

One of these is Myer ($MYR).

I’m one of these males who hates procuring. I discover the entire thing a ball ache.

However, if I’m going wherever, it’s most likely going to be Myer. I’m 43, with zero curiosity in fashion. I’m not alone. Myer’s loyalty program has 4.6 million energetic members.

More importantly, Myer simply gave us a trading replace too. What did they inform us?

It was by no means a great replace, in phrases of industry trends.

Myer’s gross sales are okay, however stated shopper are nonetheless attempting to find worth and beneath value of dwelling stress. Retailers generally are discounting to keep up gross sales and market share.

However, it’s the market response that issues to me. Nothing Myer stated goes to be a shock anybody at this level.

And so it proved.

The stock initial bought off when that replace got here out. But assist got here in for it. I’ve marked that on the chart under…

Myer solely has a market cap of $652 million. At beneath 80 cents a share, that’s a long approach off its former highs. It has $280 million in money ultimately accounts.

It’s onerous to see that as something however low cost.

That stated, it’s onerous see the stock taking off quickly. It’s been a few a long time since shops have been a “thing”.

However, Myer’s broad community of shops and energetic members will present helpful clues to trace the potential restoration of the Aussie shopper discretionary sector.

I’d be stunned to see it break the current April low at any level within the subsequent few years, assuming the cyclical upswing occurs, as I anticipate.

Best needs,

Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator

With the US Dollar Index struggling to carry above main assist at 98.00, the Australian greenback is getting stronger.

That is regardless of the primary rate of interest cut in two years occurring final week in Australia.

The restoration within the Australian greenback has been fast because the sharp promote-off in April that took it under 60 cents.

The collapse within the Australian greenback final month took the price down into a main buy zone between 58-62 cents (see chart above).

Confirmation of a month-to-month buy pivot this month will firm up the constructive vibes for the Aussie greenback, giving targets back to the center of the most important vary at 68 cents (presently 65 cents).

The long-term pattern primarily based on the month-to-month transferring averages stays down, so I will probably be fast to shift back to a bearish footing if the rally doesn’t proceed. But for now the Australian greenback appears to be like constructive for more upside in coming months.

Regards,

Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps

All advice is basic advice and has not taken under consideration your personal circumstances.

Please search impartial financial advice relating to your own state of affairs, or if doubtful concerning the suitability of an investment.

Callum’s Premium Subscriptions