Closing Bell 23rd November: Commodity Stocks Weigh Down ASX; Nick Scali and Nickel Industries Slide

Oil falls as OPEC+ meeting delay dims hopes for more output cuts
Oil prices fell as the delayed OPEC+ meeting caused uncertainty about tightening supplies. US crude stockpiles increased significantly, adding pressure on prices. Despite concerns, the market is hopeful that the delay, mainly due to disagreements with African members, will not lead to a drastic deviation from expected outcomes. Overall, oil markets remain volatile, with supply concerns and the upcoming US holiday influencing trading.

AI stocks proving their resilience, even Nvidia
Capital Economics’ Thomas Mathews suggests AI-linked equities could rise further, despite high tech stock price/earnings ratios. He believes that compared to the dotcom bubble, tech valuations are not excessively high. Wedbush Securities’ Dan Ives also sees AI as a key tech sector driver, citing robust results from companies like Nvidia and Microsoft. Investor enthusiasm for AI’s potential impact on productivity and technological advancement could continue to boost AI stocks.

China’s troubled shadow bank warns of insolvency
Zhongzhi Enterprise Group, a major Chinese shadow bank, has warned of severe insolvency, with debts more than double its assets. This development signals deepening troubles in China’s $3 trillion trust sector. The company’s assets significantly fall short of covering its debts in the short term, highlighting the risks in China’s financial system amidst a housing crisis and slow economic growth. Zhongzhi’s financial distress reflects broader challenges in managing high-yield investment products in the country’s volatile economic landscape.