ASX investors and newcomers remained in limbo this week as the AI-boom continues to look increasingly at odds with a much more sinister underlying reality.
asserted
boom → remain → reality
Wall Street’s S&P 500 is still flirting with record highs, but the rally is becoming increasingly narrow.
asserted
rally → flirt → highs
In August, around 70 per cent of S&P 500 companies traded above their 50-day moving average.
asserted
cent → trade → average
By early October, that figure had slumped to roughly 28 per cent, with a handful of AI heavyweights doing much of the heavy lifting.
asserted
handful → slump → lifting
Beneath the headline highs, the market is looking increasingly fragile, leaving investors wondering which breaks first — stocks or bonds?
asserted
which → look → investors
Closer to home, Albo and Minister for - expensive - Energy Chris Bowen headed to Fiji for a pre-COP climate summit holiday of grandiose proportions.
asserted
Albo → head → proportions
Carrying an estimated $20 million price tag, Bowen’s summit attracted precisely zero international enthusiasm for its grandstanding, with even the leader of our closest ally, New Zealand, not bothering to show up and Albo the only G20 leader in attendance.
asserted
leader → carry → attendance
While global leaders abandon net zero grandstanding, Labor appears to have missed the memo.
asserted
Labor → abandon → memo
After taking aim in last week’s Runners at Australia’s Net Zero virtue signalling and its convenient approach to keeping coal out of sight and out of mind, we were almost tempted to think the NSW Labor Government had found a way to outdo itself.
asserted
Government → take → itself
Enter the High Court’s ruling on the Hunter Valley’s Mount Pleasant coal mine expansion, adding another layer of legal uncertainty to an industry that remains one of Australia’s most important economic lifelines.
asserted
that → enter → lifelines
The court ruled that NSW planning authorities had failed to properly consider the emissions generated when coal from the Mount Pleasant mine expansion was burned overseas.
asserted
coal → rule → expansion
So, if we can’t have affordable energy, then nobody can?
asserted
nobody → have → energy
The decision does not automatically ban new coal mines, but it sets a precedent that could turn future approvals into a legal minefield and send investors running for the hills.
uncertain
investors → ban → hills
Australia is already making life difficult for our last industry in which it holds a genuine global competitive advantage, despite its enormous contribution to export earnings, investment, regional jobs and government royalties.
asserted
it → make → earnings
The stupidity of the policy direction becomes difficult to ignore.
asserted
stupidity → become → direction
What exactly happens when Australia makes it harder to supply a commodity the rest of the world still wants?
asserted
rest → happen → world
Does India abandon efforts to improve living conditions for its 1.5 billion citizens?
asserted
India → abandon → citizens
Does China suddenly stop making steel because NSW thinks it should consider emissions produced thousands of kilometres away?
asserted
it → stop → kilometres
The demand doesn’t disappear because Australia makes its own projects harder to approve.
asserted
projects → disappear → ?
Buyers instead turn to Indonesia and other suppliers at a premium, while Australia’s economy wilts away.
asserted
economy → turn → premium
After killing the affordability of energy for our manufacturing industry, we are now putting up more legal obstacles in front of our coal industry while competing nations happily supply the very same markets - nailed it.
asserted
nations → kill → it
Mining investment runs on confidence that big, long-term projects can get the green light.
asserted
projects → run → light
Keep shifting the approval goalposts and billions of dollars in potential investment may simply pack their bags and head offshore.
The ASX had its own goalpost-moving moment this week, as buyers evaporated and capital headed for the exits ahead of what was shaping up as our very own AI superstar hitting the boards.
uncertain
superstar → keep → boards
Firmus, the Nvidia-backed AI infrastructure company, looked set to deliver one of the biggest floats in Australian market history, seeking to raise billions at a proposed valuation of $44 billion – Woolworths entire market cap.
asserted
Firmus → back → billion
This was the moment at which something beyond the usual banks, miners and supermarket giants could dominate the local market: an AI infrastructure heavyweight backed by one of tech’s biggest names, promising to build the data-centre capacity needed to feed the world’s insatiable appetite.
uncertain
something → dominate → appetite
Led by co-founder and disgraced former broker Oliver Curtis, Firmus had the story, the sector and the heavyweight backing.
asserted
Firmus → lead → story
What it apparently couldn’t find, however, was enough investors willing to swallow the AI-inflated price tag.
asserted
find → find → tag
A former insider trader promising next to no debt and roaring EBIT in two years doesn’t mean you can slap a $44 billion valuation on the table and expect investors to bite.
asserted
investors → promise → table
Doubts soon mounted, with talks of a potential share repricing gathering pace as the supposedly “heavily in demand” $11-a-share IPO began to show cracks and analysts widely questioned whether the company’s lofty growth expectations had already been worryingly baked-in.
By Friday, the proposed record-breaking float had been pulled altogether, with Firmus’ founders - who stood to make billions on paper - blaming market volatility and prevailing conditions rather than, perhaps, a touch of greediness.
asserted
who → mount → greediness
Our Runners list remained short again this week in a market still struggling to find its feet; however, the junior mining faithful still managed to deliver a few bright spots.
asserted
faithful → remain → spots
Top honours went to a junior rare earths hopeful looking to follow in the footsteps of its recently acquired Brazilian rare earths brethren, after Lynas Rare Earths agreed to take out Meteoric Resources last week for a handy $968 million.
asserted
Earths → go → million
ALVO MINERALS LTD (ASX: ALV)
Up 257% (2.1c – 7.5c)
Bulls N’ Bears Runner of the Week is Alvo Minerals, which absolutely exploded as investors stampeded into its Brazilian rare earths play.
asserted
investors → explode → play
A cocktail of promising heavy rare earth grades and a potentially much cheaper processing route has thrust the project into the spotlight, just as ionic clays are becoming the flavour of the month for Western supply chains, with Brazil emerging as a prime hunting ground.
asserted
Brazil → thrust → ground
Alvo’s Bluebush project sits on the northern slice of the Serra Dourada granite, the same host granite as the world-class Serra Verde mine, which USA Rare Earth agreed to acquire in April for a jaw-dropping US$2.8 billion ($4 billion).
asserted
Earth → sit → billion
When you’re exploring in the shadow of a multi-billion-dollar operation, you’re already playing a different game.
asserted
you → explore → game
The company says its drilling has defined an ionic clay system showing all the right signs.
asserted
drilling → say → signs
The mineralisation also delivered a suite of highly prized heavy rare earths, dysprosium and terbium, two elements critical for high-performance magnets.
asserted
mineralisation → deliver → magnets
Top results included 6m at 2 537 parts per million total rare earth oxide (TREO) and 65ppm DyTb from surface, including a richer 3m at 3,415ppm TREO and 95ppm DyTb.
asserted
results → include → TREO
Another hole returned 11m at 1,032ppm TREO, with most holes ending in mineralisation, suggesting the rare earths system remains open at depth.
asserted
system → return → depth
All up, the valuable heavy rare earth oxides (HREO) account for an impressive 22 per cent of the TREO mix.
asserted
oxides → account → mix
…and 36 more, not listed.
The Aporia
