Three things that got the team talking this week - Firetrail Investments

Weekly insights from the Trail

Three things that got the team talking this week

April 26, 2024May 3rd, 2024

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1. Gold Spree…

The People’s Bank of China has been on a buying spree for gold for 17 straight months, its longest-ever run of purchases!

Imports have surged into China. Over the first 3 months of 2024, gold imports are 34% higher than they were in 2023.

China is the worlds biggest producer and consumer of gold. And in the last two years, China’s overseas purchases totalled over 2,800 tons, or more than all of the metal that backs ETF’s around the world, or about a third of the stockpiles held by the US Federal Reserve. And China’s proportion of reserve holdings still lags behind most other major economies.

Source: China Customs, Bloomberg (April 2024)

Source: Evans, TS Lombard (April 2024)

2. Credit Check…

Higher for longer interest rates do come with consequences. The number of Aussie companies entering external administration has tripled this calendar year. And US credit card defaults are up around 5.7%, noting the previously peaked at 9% in the GFC.

Source: ASIC, Macrobond, Antipodean Macro (April 2024)

Source: SEC Filings (April 2024)

3. Dollar dollar bills…

The demand for $100 bills in the US took off when the Fed lowered interest rates to 0 in 2008, growing much faster than the demand for $1 bills. Consequently, there are now many more $100 bills than $1 bills in circulation. That’s a nice tip!

Source: Federal Reserve Board, Apollo Chief Economist (April 2024)

Disclaimer

This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email service@pinnacleinvestment.com

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