Miners take the lead over banks; $US9m lunch with Buffett; house auctions, prices fall
News in brief
The preliminary auction clearance rate in Sydney fell below 50 per cent over the past week – the lowest result since April 2020, the early COVID period. The country’s biggest market was easily the worst performing major market.
Federal Treasurer Jim Chalmers continued selling his budget over the weekend, calling on critics to focus more on the substance of the changes, and less on the politics.
Illegal tobacco is a major problem for honest sellers and the federal government’s coffers. The total take from tobacco excise is forecast to go from $16 billion in 2020, to just $2 billion in 2030 because the illegal market is booming. Yet commonwealth prosecutors have handled just 405 illicit tobacco cases in more than seven years, with only 107 people spending time behind bars, according to The Australian.
Iran has said that transit through the Strait of Hormuz will flow once the conflict with the US and Israel is over, but there is no indication that the sides are any closer to resolving their differences.
An anonymous bidder has paid $US9 million to have lunch with Warren Buffett, the former Berkshire Hathaway CEO, basketball star Steph Curry, and his wife, entrepreneur Ayesha Curry.
Fear-o-meter
There has been a fundamental change on the ASX. Resources are back while other sectors have struggled. The ASX Materials index is up 50 per cent while the healthcare and tech indices have fallen 45 per cent and 35 per cent respectively.
Consumer discretionary stocks have been sold down. But the miners are on a tear and it isn’t just the big three iron ore diggers.
The gold companies like Evolution Mining, Newmont and to a lesser extent Northern Star have ridden the rise in the price of the precious metal.
Lithium and rare earth miners have done very well. In late 2024, early 2025, fears of overproduction in lithium pushed the metal’s price to 20 per cent of its peak. But now it has rebounded.
Then there are the energy companies – the oil and gas giants Woodside, Santos and Beach Energy, the coal players like New Hope and Whitehaven, the refiners Ampol and Viva Energy and the uranium stocks Paladin and Deep Yellow. They have benefited from the turmoil in the Middle East.
The financials index is always relevant on the ASX because it comprises around 25 per cent of the market. It is mixed over the past 12 months. ANZ is up 20 per cent while Macquarie and Westpac have jumped 13 per cent. Yet CBA and NAB have gone backwards. Some deal with the insurers, with QBE flat while Suncorp and IAG have both fallen more than ten per cent.
Australia is known as the “lucky country” because of its abundance of resources and geographic isolation. And for the past 12 months, that has paid big dividends.
Fear & Greed Q+A today
On the week ahead for the economy, including jobs figures for April, and the minutes of the RBA meeting where rates were hiked. Plus, how business owners might be feeling now in the wake of three interest rate increases and the federal budget:
"If you’re a business owner right now, you’d be, as they say in the classics, hunkering down. We’ve got the preconditions — and I think it’s coming through in these business and consumer surveys — that conditions are pretty tough right now.
Businesses and consumers know their financial position very well. They’re very alert to when there’s a squeeze on finances, and the small and medium business sector is seeing that now.
We’ve got a cooling in household spending outside petrol. If you’re a petrol station you’re probably doing well because people are filling up not only their cars but jerry cans and everything else they can find. But the general shopping part of the economy — the retail side — is particularly weak and vulnerable.
The economy could get worse before it gets better. These rate hikes and the petrol shock are still permeating their way through the economy and haven’t had their full effect yet."
Australia’s commodity companies – miners and energy players – have been the shining lights of the local ASX, preventing losses on the bourse over the past 12 months. While recent years have been all about tech companies and then the big banks, it’s the miners who are now the stars.
The materials index on the ASX is up 50 per cent over the past year, while the energy index is up 17 per cent. The utilities index is also higher, but all other eight sub-indices are either flat or lower.
BHP and Rio have risen more than 50 per cent over the past year and Fortescue is up 35 per cent. That’s on the back of iron ore prices pushing back above $US110 a tonne, while copper prices have hit a new high.
BHP is one of the world’s largest copper producers, and copper is used in everything from data centres to electronics and communications. That has supercharged the Big Australian’s share price.
Greed-o-meter
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