On theASX we had a $36bn CASH takeover offer for Santos from an Abu Dhabi consortium at a 30% premiumwhich will need FIRB approval [see Commodities section below]. The Board are all in and long- sufferingshareholders are desperate for a deal. The fact that Santos shares are trading 15% below the offer pricetells you that investors are highly uncertain that FIRB will approve the deal.
Blackrock, the world’s largestfund manager, is reducing its exposure to Australian equities due to expensive share valuations.
The oilprice rose sharply due to Geopolitical risk in the Middle East and then fell back as the market realizedthere is plenty of supply.
The Gold price surged and then fell sharply the next day. The probability of afull-blown Middle East war including US participation has gone up substantially, as the US and Israeldemand regime change in Iran.
ISRAEL/IRAN WAR: President Donald Trump is considering whether to launch a military strike againstIran, current and former administration officials told NBC News. Trump warned Iran’s leader, AyatollahAli Khamenei, that he is an “easy target” and “our patience is wearing thin.” Trump demanded Tehransurrender in its escalating conflict with Israel.
TRADE WAR: President Donald Trump said he intended to send letters to trading partners in the next oneto two weeks setting unilateral tariff rates, ahead of a July 9th deadline to reimpose higher duties ondozens of economies. “We’re going to be sending letters out in about a week and a half, two weeks, tocountries, telling them what the deal is,” Trump told reporters. Meanwhile tariffs on Chinese importsinto the US are a punitive 55%, and US imports into China have a 10% tariff on them. Japan still has somesticking points with the US which can’t be agreed on. The EU has many sticking points with the US and soit goes. Australia cannot even get heard in the Trade War, never mind do any sort of deal.
ATTACK ON THE FED’S INDEPENDENCE: Meanwhile the attack on the independence of the FED is in fullswing with both Trump and Vance making scathing remarks towards Fed Chairman Jerome Powell.Clearly they are trying to force him to cut interest rates. They are implicitly threatening him. Theindependence of the FED is now in question. The markets shouldn’t like this one bit and we could be atthe start of a really nasty sell-off on Wall Street.
