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With oil, gold and many base metals rallying strongly in recent times, share prices have been well supported, helped (predominately in the UK) from a rotation from investors to reposition portfolios away from stocks directly exposed to the UK economy.
With valuations now so rich in many names we are going to need to see solid production and earnings numbers, so investors can mark-to-market where valuations are in relation to the recent commodity price rise. Obviously production numbers feed into the upcoming earnings, so they are important despite historically having a low impact on share prices on the actual day of release.
In the next couple of weeks we will be getting production numbers from the likes of BHP, Antofagasta and Fresnillo, with Rio Tinto already having reported numbers today that were modestly below expectations on the quarter. Rio’s full-year guidance has been maintained and we should see this from BHP as well. In this video Chris Weston takes a look at the sector, the catalysts, what to expect from production numbers and how these numbers may translate into earnings.