Trending On Livewire: Weekend Edition - Saturday 8th February
Gold hits record highs, investor sentiment soars, and markets rally as earnings season heats up.
Record-high gold prices and a raft of new trade tariffs were the big stories in a week when global and local shares marched higher. Demand for gold globally hit record levels, with central bank buying, flows to gold ETFs, and political uncertainty pushing the precious metal to a new record of US$2,900 per ounce.
Investor sentiment is also sky-high, with record levels of mum-and-dad investors pouring money into the best-performing stocks. Retail investor sentiment reached the highest level on record this week, surpassing the meme-stock mania of 2021, according to Bloomberg. On Tuesday, President Donald Trump unleashed a raft of new Tariffs, spooking professional investors, yet the retail crowd was unphased, pouring $3 billion into the market on the day. 70% of this new money went into the Magnificent Seven stocks, with Nvidia the primary beneficiary.
The bullish tone was matched on the ASX, with Information Technology and Materials being the best-performing sectors. Investors cheered on strong results from proven performers, including Pinnacle and REA Group. Even the short sellers were put on notice, with fallen angel Domino’s Pizzas announcing store closures and plans to cut costs - the move prompted a 20% surge in the heavily shorted stock.
Reporting season will gather pace over the coming weeks and will no doubt set the tone for markets - don’t forget to check out our February Reporting Season guide. The RBA will decide on rates in just over a week, with markets pricing a 95% chance of a 25-point cut. While the party might not be in full swing yet, the pre-drinks are underway.
Chris Conway, Managing Editor, Livewire Markets
Australia’s next hot property markets: 17 suburbs and regions tipped to boom
Some suburbs quietly appreciate year after year, while others explode in value seemingly overnight. So where should investors be looking? Ray White’s Nerida Conisbee, Capital Property Advisory’s Matthew Hughes, and I opine on the next suburbs primed for serious growth. Whether it’s gentrification, infrastructure spending, or supply constraints, these areas tick all the right boxes. If you’re looking for your next move in the property market, start here.
Earnings optimism is back!
The February results season will soon be in full swing. As I like to point out: every season has its specific character. This time will be no different. But results seasons are rarely guided by earnings reports only. Recent events have reminded investors US policy decisions will be part of the mix this year. Last year’s August season proved a rather underwhelming experience, generating 37% in misses - well above average - and only 27% of beats, marking the worst milestone for corporate results in Australia post 2013. So, should investors worry about a lack of progress made since? Here, we discuss why or why not.
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Chart of the Week: All that glitters is... a roaring dislocation
After a wonderful and incredibly productive three years, this week was my last at Livewire. So to mark this moment, I’ve gone with a chart showcasing what I think has been one of the big stories of my time here - the end of a decades-long principle in markets.
Traditionally, the US Dollar gold price has an inverse relationship with the 10-year real yield (nominal 10-year bond yield + inflation). In late 2023/early 2024, that relationship snapped. While many experts hypothesised that this dislocation wouldn’t last, it most certainly has. One person who believed the dislocation would last was Janus Henderson’s Daniel Sullivan. In a March 2024 episode of Signal or Noise, he said gold presented a generational buying opportunity. And boy has he been right.
From me to you, I just want to say it’s been an honour to write, to present, and to produce content for you - the best audience anywhere. Thank you for your loyalty, your feedback, and your support. As Dorothy from The Wizard of Oz said to the Scarecrow, “I think I'll miss you most of all.” Good luck and farewell.
Hans Lee, Senior Editor, Livewire Markets
Weekly Poll
With earnings season upon us, what are you expecting?
a) Strong results showing a healthy corporate Australia and the rally to continue
b) Mixed results - some sectors flying, some really struggling, bringing into question lofty valuations
c) Weak results, highlighting that the market has run ahead of itself and needs to rerate lower
LAST WEEKS POLL RESULTS
We asked "It was a big week for market-moving headlines. Did any of the following cause you to make any portfolio changes?"
The poll shows 0% reacted to DeepSeek’s rise and Nvidia’s moves, 6% to Australian inflation data, 2% to US earnings, 1% to the Fed’s rate decision, and 81% didn’t act on these events.
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