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RIO - Rio Tinto News Story

6250p -25.0  -0.4%

Last Trade - 4:38pm

Basic Materials
Large Cap
Market Cap £101.59bn
Enterprise Value £105.45bn
Revenue £31.56bn
Position in Universe 13th / 1824

LIVE MARKETS-Commodities: First remove the froth

Wed 7th April, 2021 2:25pm
* U.S. equity index futures little changed; Fed Minutes at 2 PM * Euro STOXX 600 down ~0.2% * Dollar ~flat; gold falls, crude rises * U.S. 10-Year Treasury yield ~1.66% April 7 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at COMMODITIES: FIRST REMOVE THE FROTH (0919 GMT/1319 GMT) Maybe it's a bubble, or perhaps we should say frothy trade. But whatever we call it, it seems that speculative buying drove some commodity prices recently, and this should come to an end sooner or later, impacting shares in miners. "We expect that some of this froth will fade over the summer, with inflation concerns and eventual rate hike pressures weighing on metal prices," according to Berenberg analysts. But it does not seem to be over yet. "The upbeat 'playlist' of stimulus measures and optimism have scope to enable commodity prices to surprise to the upside, at least in the near term." But as new supply is coming, Berenberg analysts expect price corrections in the second half of 2021. They are cautious on gold after net outflows of exchange-traded funds (ETFs) and believe it is likely to drift lower unless the pandemic's fallout keeps rates lower for longer. Bottom line, Berenberg takes a neutral/negative stance on precious metal miners, favoring Polymetal POLYP.L . Preferred names remain Central Asia Metals on strong free cash flow and dividend yields, such as Kenmare KMR.I and Tharisa THST.L . Anglo American is its favored diversified miner, while it remains hold-rated on Rio Tinto RIO.L and BHP BHPB.L . (Stefano Rebaudo) ***** NASDAQ COMPOSITE: GENERALS GYRATE, TROOPS COIL (0900 EDT/1300 GMT) Since topping on Feb. 16, the Nasdaq Composite .IXIC has been on a roller-coaster ride. Indeed, the tech-laden index slid as much as 12.5% in just 13 trading days, into its March 5 trough. Now, over the last 21 trading days, the Composite has rallied as much as 11.1%. That said, the IXIC has yet to join the Dow Jones Industrial Average .DJI and the S&P 500 .SPX , in record high territory this April. The Composite ended Tuesday about 3% shy of its February closing high. With this, the IXIC stalled right in the 76.4%/78.6% Fibonacci retracement zone of its February-March slide, in the 13,755.49/13,794.61 area. The Composite hit 13,776.71 and then backed off into the close: Meanwhile, since the Composite's February top, a measure of internal strength, the Nasdaq daily Advance/Decline line .AD.O , has been coiling in a contracting range. On the plus side, the A/D line made a higher low with the Composite's early-March trough. Now, however, despite the Nasdaq having exceeded its mid-March high, at 13,620.71, the A/D line is so far failing to confirm that move, by threatening to roll over shy of its commensurate level. Ultimately, to add confidence in continued Nasdaq gains, traders will want to see the index close above the retracement zone, coupled with the A/D line breaking out above its mid-March high, and resistance line from its February high. Conversely, if the Composite falls back below its mid-March high, and the 61.8% Fibonacci retracement of its February/March slide, at 13,495.90, along with an A/D line break of the support line from its late-January low, the potential for a more sustained decline may be back at the forefront. (Terence Gabriel) ***** FOR WEDNESDAY'S LIVE MARKETS' POSTS PRIOR TO 0900 EDT/1300 GMT - CLICK HERE:*:nL1N2M010D <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ IXIC04072021 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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