Five things you need to watch this week with trading ideas
- 1- Firstly, shares in the world's and Australias biggest commodity companies, BHP $BHP Group Ltd(BHP.AU$, Rio $Rio Tinto Ltd(RIO.AU$ and Fortescue $Fortescue Ltd(FMG.AU$ – are all trading down 7.5% from their December highs after the iron ore price fell 9% from its December high.
o There is a risk their shares could fall further toward correction (as in trade 10% down from their highs), as China's central bank did not cut its 1-year medium term lending rate from 2.5% to 2.4% as widely expected today.
o Consider that BHP $BHP and Rio Tino $RIO make over 50% of their revenue from China. Fortescue $FMG makes 89% of its revenue from China. And these are some of the biggest dividend payers on the ASX paying 8.5%, 6.5% and 9.1% respectively.
- 2- Secondly consider that the Aussie share market is expected to have a come back year. It doesn't mean all weeks will be positive. You could consider increasing your profits if you buy into the weakness and sell after it rebounds.
o So far this year, the Aussie market'ss ASX200 has fallen 1.2%. I think we could have negative days ahead before returning to positive ones. So it's worth watching ASX200's biggest ETF VAS $Vanguard Australian Shares ETF(VAS.AU$ .
o I think the Aussie market is due for a pull back because the ASX200 rose 13% from November to December last year. Normally, when a market or stock goes up by about 10%, we then see investment managers take profits off the table. It's quiet normal in professional investment management.
o So be aware of that. And on the positive side of things, you could expect savvy investors and maybe people you know, to be 'buying the dip', into the market or stocks they like, to catch stocks 'on sale’
- 3 - Thirdly, consider it will be the first full trading week for the 11 Spot Bitcoin ETFs after their debut last week. Its worth noting what the most 'valuable' Bitcoin ETFs are,as they could become regular fixutures of investment managers porfolios and also frequently 'traded'.
o 1 - Grayscale Bitcoin ETF$GBTChas the most funds under management with $26.4 billion
o 2 - Blackrock's iShares$IBIThas $500 million in funds under management.
- 4 - Fourthly, this week the World Economic Forum kicks off. What's catching my eye there is
o that JP Morgan Chase's $JPMorgan(JPM.US$ CEO Jaime Dimon is advising Ukraine’s President Zelenskiy on how to finance reconstruction of the country.It’ll be interesting in seeing what comes out of that.
- 5 - The final thing to consider is that the Aussie jobs data out on Thursday will be watched like a hawk.
It will likely give more proof that the Reserve Bank of Australia (RBA) can STOP rising rates. Hooray for mortgage holders. As for the number to watch, the unemployment rate is expected to rise from 3.9% to 4%
Happy trading and investing
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Moomoo Official Market Strategist
Investment strategist, featured on TV, radio, newspapers.
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