The local sharemarket fell one-and-a-half per cent yesterday to its lowest level in nearly seven weeks as surging oil prices, more bad news in the Middle East, rising bond yields and the hangover from last week’s budget, particularly the changes to CGT and negative gearing, spooked investors.

Around 80 per cent of stocks ended the day lower, with some big falls among the miners and property groups, while a couple of blue-chips also got hit hard.

At the moment any bad news is jumped upon to sell, and yesterday BHP, Macquarie, Fortescue, Rio Tinto and Goodman Group all fell sharply. The S&P/ASX 200 is now eight per cent below its peak in February.

Listen to today's episode 🎧 

Greed-o-meter

Fear & Greed Q+A today

On what looks like a fundamental shift on the ASX from banks towards miners, and the companies he's watching:

 

"We like what we call ‘halo stocks’ — heavy asset businesses with low obsolescence risk. These are companies that generally won’t be disrupted heavily by AI or rapid technological change.

Examples in Australia would be stocks like Aristocrat Leisure, Transurban, Telstra and APA Group. APA in particular has strong pricing power because it owns pipeline infrastructure. Compare that with companies like Origin or AGL that buy energy and then resell it — they’ve got much higher variable costs.

 

We also like the materials side of the market, especially rare earths. China has introduced export controls and Australia is actually in a very strong position to supply critical minerals globally. Lynas is a really interesting example because it’s effectively the only significant commercial producer outside China of both heavy and light rare earths."

 

This is general information only. Seek professional advice tailored to your circumstances before making investment decisions.

News in brief

Pallet maker Brambles share price tumbled 19 per cent yesterday after it downgraded its financial year earnings forecast, not because of a drop in consumer demand, but because it can’t repair pallets to an adequate level, fast enough, to get them back into action.

ASX200-listed Tuas Limited tumbled 62 per cent yesterday, losing more than $700 million in value after Singapore’s regulator delayed a potential merger and said it was looking into the group’s activities.

The gloves are off between the two major parties when it comes to the federal budget, with the proposed minimum taxing of discretionary trusts at 30 per cent being labelled a “death tax” by the opposition.

The federal government has ordered six China-linked investors to sell their holdings in Northern Minerals, a rare earths miner that has received support from Export Finance Australia and the US Export-Import Bank.

Nearly 80 per cent of US professional worker say they’re ready for a new job, and roughly half of that crowd is actively trying to switch fields this year. The main reasons: remote options, higher salaries, and better work-life balance are the top three, but also recent layoffs in tech and media have forced some people to find new roles.

Fear-o-meter

Federal Labor is sustaining some damage, electorally, following last week’s budget. The Resolve Political Monitor in Nine newspapers shows Labor’s primary vote has fallen three percentage points to just 29 per cent, after the budget.

But the Opposition didn’t benefit much – rather 24 per cent of voters opted for One Nation and 23 per cent the Liberal-National Party.

One Nation leader Pauline Hanson is now the most “likeable” politician in the country, with a net performance rating of plus 12 percentage points. Angus Taylor is in second place with a net rating of plus 11 percentage points. In contrast, Anthony Albanese is languishing on a net likeability rating of minus 13 points.

And a post-budget Newspoll in The Australian rated the budget the worst for the economy since 1993, with younger Australians unconvinced that Labor’s new measures will reduce inflation or deliver on intergenerational equity and housing.

That was the bad news. The good news for Labor was that its primary vote remained static at 31 per cent, One Nation was 27 per cent and the Coalition just 20 per cent.

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