Markets on tenterhooks; gold hits $US5000; BlueScope looks for buyers

Markets on tenterhooks; gold hits $US5000; BlueScope looks for buyers

News in brief

Australia’s biggest steelworks company, BlueScope, is shopping around for a buyer. BlueScope execs were in Korea and Japan talking to representatives from POSCO and Nippon respectively, about the global steel companies taking a stake in the Aussie company, or even buying it, according to media reports.

 

Speculation about who will lead the federal Liberal Party in 2026 is gathering pace, with incumbent Sussan Ley facing potential challenges from frontbencher Angus Taylor and backbencher Andrew Hastie.

 

Australia Day yesterday was a mix of celebration and protests, with rallies held in cities including Sydney, Melbourne, Brisbane and Canberra. There were invasion day protests, organised by indigenous Australians, as well as March for Australia rallies.

 

On average, four in five Qantas flights take off within 15 minutes of their scheduled time, while 77 per cent of Virgin and 74 per cent of Jetstar are on-time.

 

A former flight attendant conned his way onto hundreds of free flights over four years by posing as a pilot, a court has heard. Dallas Pokornik used a fake employee ID card and his insider knowledge to fly for free across three major airlines, prosecutors alleged.

Fear-o-meter

One part of the economy that gets, and maintains, Donald Trump’s attention is financial markets. It is how he and millions of others have made money over many years.

 

Financial markets are telling the US President that they are not overly happy with his administration.

 

Investors still like US dollar assets, but not as much as they did a few months ago. And that shift is worth billions of dollars.

 

Trump’s international and domestic policies are starting to scare investors. In the past fortnight, investors have had to contend with Trump’s determination to use force to take Greenland, his threat to slap a 100 per cent tariff on Canadian goods if that nation does a trade deal with China, and the potential for a military incursion into Iran, with a US armada currently heading towards the Middle East.

 

There is also internal unrest in the US over two killings by ICE agents in Minnesota. These actions, more than the Epstein files, the abduction of the leader of Venezuela or Liberation Day tariffs, have spooked not just Democrats, but Republicans as well. They, along with right-wing influencers, are wary of the use of US Immigration and Customs Enforcement in major US cities.

 

Trump can be pragmatic. It would not be a surprise if he soon decides that ICE should retreat from Minnesota saying “job done”. But that might not be enough to calm financial markets.

Fear & Greed Q+A today

On the potential for a year of M&A activity in the mining sector, led by a possible deal between Rio Tinto and Glencore:

 

“It’s really been a decade in the making, but one of the reasons this is happening now is that mining companies are chasing growth. It’s no secret that Rio Tinto and BHP have been jockeying for position as the biggest miner in the world. When BHP tried to buy Anglo-American late last year, that really raised the stakes for Rio Tinto. A transaction like this gives a company the opportunity to inherit a large portfolio of assets and then be selective. You keep the high-quality assets — long mine life, strong cost structures — and you divest the assets that don’t fit, like higher-cost operations or those with shorter mine lives. You might lose some production in the process, but you’re improving the overall quality of the portfolio. That’s where the economics of these mega deals come from. And at the same time, it gives you greater exposure to key commodities like copper, which is becoming increasingly strategic.”

Global markets are on tenterhooks, with investors wearying of US assets, and gold pushing beyond $US5,000 an ounce for the first time. The yen, euro and Canadian dollar are all rising against the greenback. Some big Wall Street tech stocks are being dumped (Intel fell 17pc over the weekend) or are losing friends (Apple is off eight per cent this year). At home, local markets are bracing for tomorrow’s inflation figures. Anything higher than expected and an interest rate hike next week is likely. Bond markets have already priced in a better than even chance of an increase.

Greed-o-meter

Rank	Name	Market Cap (USD)	Country
1	Tesla	$1.493T	USA
2	Toyota	$296.31B	Japan
3	BYD	$124.01B	China
4	Xiaomi	$120.58B	China
5	Hyundai	$88.70B	South Korea
6	General Motors	$75.86B	USA
7	Volkswagen	$63.75B	Germany
8	BMW	$63.39B	Germany
9	Mercedes-Benz	$61.22B	Germany
10	Ferrari	$60.54B	Italy
11	Ford	$54.02B	USA

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Tesla's market cap is almost $US1.5 trillion. But what's most remarkable is that the EV company has a higher value than the next twenty carmakers combined, including Toyota, BYD and Volkswagen.

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Source: Statista