You have reached your maximum number of saved items.
AI videos of the US blowing up Iran’s Kharg Island littered President Trump’s social media, welcoming pundits to a mad market on Monday.
The orange leader of the free world was doing his best to unhinge traders, as they immediately did what traders do best — panic about oil. Brent crude flew to as high as US$97.5 a barrel, up over 8 per cent on the week, as attacks were renewed.
As if a near triple-digit oil price wasn’t enough, newly appointed Federal Reserve chair Kevin Warsh used the annual Jackson Hole gathering to remind markets that inflation remains public enemy number one. His hawkish commentary did little to dampen expectations of a September rate hike and as oil moved higher, the teetering bond yields followed.
The bigger concern in bonds, however, may be lurking beneath the surface.
Financial markets are increasingly being asked to digest two borrowing binges simultaneously. Washington continues to issue debt like there’s no tomorrow, while the AI arms race has triggered an unprecedented wave of corporate borrowing.
More than US$1 trillion (A$1.4 trillion) of corporate debt has now been issued to hyperscalers such as Google, Amazon and Meta as they race to build out infrastructure, a number that, remarkably, is double what it was at just the start of this year!
For the first time in years, corporate debt is beginning to compete directly with government bonds for investor capital. The UK’s bond market is already showing signs of strain, trading at its weakest levels since the GFC, while long-dated US Treasury yields continue creeping higher despite increasingly desperate efforts to keep them under control.
Last week’s decision by Treasury Secretary Scott Bessent to double buybacks of long-term government bonds looked suspiciously like an acknowledgement that the debt market is hovering just above the abyss. Yet even that intervention has failed to stop yields from climbing. Markets are now asking a far more uncomfortable question: if doubling bond purchases doesn’t work, what comes next?
Simultaneously, gold tumbled at the start of the week, dropping from above US$4600 (A$6400) an ounce to below US$4300 (A$5965) by Wednesday as traders braced for higher rates and stickier inflation. Then, on Friday, another Fed member, Governor Christopher Waller, poured cold water on expectations of an imminent rate hike, effectively telling markets they were good to go. The knee-jerk traders completely reversed course – of course – sending markets and gold surging, with the yellow metal charging back above US$4520 (A$6210) an ounce, to cap off an intraweek swing of almost 11 per cent.
Resources once again dominated Bulls N’ Bears Runners of the Week list, as a newly listed copper explorer wasted no time announcing its arrival, striking it rich in elephant country. Meanwhile, AI uncertainty, central bank jitters and mounting debt fears sent investors scrambling for the safety of something more valuable in the ground.
The Bulls N’ Bears Runner of the Week is newly listed Namibian explorer Kaoko Metals, which jumped out of the ASX gates in breathtaking fashion after its maiden drilling program hit paydirt in elephant country.
The company struck two spectacular intersections of visible copper mineralisation from its previously undrilled Otniel target at the Chalkos copper-silver project. The first hole returned a staggering 60.25 metres of visible copper mineralisation, while a second hole hit a 51.83-metre zone containing a grab-bag of high-value copper minerals, including chalcocite, cuprite, malachite, dioptase, chalcopyrite and native copper.
The core photos were absolutely stunning and were all the market needed to see. Kaoko’s share price, which had already performed strongly since its 20c debut and closed last week at 75c, literally exploded. The stock rocketed to a high of $2.62 on Thursday, a 249 per cent gain for the week, before the company wisely moved to fill its coffers with a well-timed capital raise on Friday to the tune of $15 million at $2.20 a share.
Kaoko says that within the broader mineralised zones of its stunning hits, the strongest logged interval comprised a hefty 32.36m of intense visible copper from just 59.3m downhole, while the second hole contained a strongly mineralised 17.2-metre section from 58.37m.
