ASX adds $80 billion but Iran might be the big winner

ASX adds $80 billion but Iran might be the big winner

News in brief

The union covering tens of thousands of council workers in NSW has launched a case in the Industrial Relations Commission, seeking emergency workplace conditions - including work-from-home rights, four-day week options, and a big lift in fuel subsidies – on the back of the conflict in the Middle East.

 

Property market leader Goodman Group has launched a 50/50 joint venture with US-based DataBank to develop a 32‑megawatt data centre Los Angeles, sending Goodman’s share price up seven per cent yesterday.

 

DroneShield has announced a major leadership shake-up. Long-time chief executive Oleg Vornik has resigned effective immediately, and chair Peter James will retire next month.

 

Energy Minister Chris Bowen has pushed back hard on questions about the government’s energy transition, after Labor’s 82 per cent renewables target was reportedly omitted from a preliminary draft of the party’s national policy platform.

 

Kanye West has been blocked from travelling to the UK after calls mounted for the government to ban the US rapper from performing at a London music festival this summer over previous antisemitic remarks and conduct.

Fear-o-meter

Clearly Donald Trump’s bark is worse than his bite, although he might argue he used tough language purely as a negotiating tool. While yesterday’s ceasefire won’t help at the petrol pump or supermarket any time soon, it is definitely a welcome step pulling back inflationary pressures and helping economic growth.

 

From a geopolitical viewpoint, what has emerged is that Iran holds a strategic mega weapon – the Strait of Hormuz. The 20 million barrels of oil that pass through each day, and the general shipping movements, are relevant to much of the globe’s existence.

 

US gas at $4 a gallon, Aussie winter crops not being planted because of fertiliser shortages, Chinese renewable energy projects booming because fossil fuels aren’t flowing, interest rates rising around the world – they are all results of Iran’s dominance of the Strait. And it has only been closed for six weeks.

 

The fallout from the conflict, assuming the two-week ceasefire holds and negotiators find a lasting peace, could well be that Iran ends up more powerful because of its geography, and dominance of the Strait. Until now, only the policy wonks understood its significance. Now we all know.

Fear & Greed Q+A today

On yesterday's rally on the ASX, and why he still considers the wisdom of the Oracle of Omaha in times like this:

 

“Warren Buffett famously once said one of the most underrated investment strategies of all time is sloth — doing absolutely nothing, or doing things very, very slowly.

 

I think it’s important to stick to your rules about what things are worth and what kind of return you want.

 

... I think there’s always room for fundamentals. And this probably explains why there’s about 400 billion US dollars in cash being held by Warren Buffett and Berkshire Hathaway. The fundamental story probably hasn’t improved dramatically — and that’s why he’s still holding cash.

 

And when we return to worrying about things other than the war, the market will start to focus again on things like AI disruption, jobs, inflation and US debt — which is going to be a big story this year and into next.

 

So I think that positioning — holding that level of cash — tells you something about how cautious you should be.”

Global share markets surged on the back of a two-week ceasefire in hostilities in the Middle East war and hopes for a lasting peace. The ASX opened more than two-and-a-half per cent higher yesterday and stayed there all day. It finished at 8952 points, having added about $80 billion in value, and is only 2.7 per cent below its all-time high at the beginning of the Middle East war. Oil prices tumbled with Brent dropping back to $US94 a barrel. Gold prices are up ten per cent over the past week, and is now trading back above $US4800 an ounce. The Aussie dollar jumped against the greenback is heading towards 71 US cents. Cryptocurrencies, led by Bitcoin, were flat, though it is one asset class that has held up very well during the turmoil.

Greed-o-meter

	Movie	Week of release	Box office (this week)	Box office (total)
1	The Super Mario Galaxy Movie	1	$8,416,018	$9,439,324
2	Project Hail Mary	3	$4,842,812	$21,029,328
3	The Drama	1	$1,327,653	$1,469,962
4	The Magic Faraway Tree	2	$1,127,168	$2,699,504
5	Hoppers	2	$973,740	$4,050,539
6	Dhurandhar: The Revenge	3	$737,597	$7,528,166
7	GOAT	4	$547,837	$8,027,431
8	Rabb da Radio 3	1	$284,466	$284,466
9	Reminders of Him	4	$241,151	$4,718,075
10	I Swear	2	$161,051	$799,000

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It was a bumper long weekend at Australian cinemas - the second biggest Easter period of the decade, with box office takings up more than 50pc on the same time last year. The Super Mario Galaxy Movie boosted the result - it delivered the biggest opening weekend of any film so far this year. Globally, it's the fifth-biggest animated opening of all time.

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Source: FilmInk, Val Morgan Cinema