ASX 200 set for losses on US market woes and Fed uncertainty
Nvidia soars while Boeing falters; Live Nation hit by antitrust worries
SpaceX eyes share sale, aiming for $200B valuation
The ASX 200 is poised for sharp losses again when the market opens on Friday as stocks faltered in New York. At 8am AEST, the ASX200 futures contract was pointing down by more than -1%.
Overnight, the S&P 500 fell by -0.74%, the blue chips Dow Jones index tumbled by -1.53%, and the tech-heavy Nasdaq slipped by -0.39%.
US stocks and bonds took a hit after data showed US business activity picking up alongside rising inflation, suggesting the Fed Reserve might remain on hold for now.
The main trigger was the unexpectedly strong PMI (Purchasing Managers’ Index) data, which came in much higher than anticipated.
“The data put the US economy back on course for another solid GDP gain in the second quarter,” said Chris Williamson at S&P Global Market Intelligence.
To stocks, Nvidia, now the third biggest company by market cap, added over 9% to a record high after reporting seven-fold increase in profit yesterday.
However, the gains didn’t extend to the rest of the market.
Boeing’s woes continue, down by -7.5% as the company predicts negative cash flow this year, and that new aircraft deliveries won’t likely improve in Q2.
Live Nation Entertainment fell almost -8% after the Justice Department filed an antitrust lawsuit, saying the company, which owns Ticketmaster, should be split up.
Over the Atlantic, the FTSE 100 was only down -0.37% in London after UK PM Rishi Sunak called for a general election on July 4, about six months earlier than he legally had to. Sunak’s Conservatives are lagging behind the Labour Party by quite a bit in the polls.
Meanwhile, the gold price dropped -2% overnight to US$2,330.47/oz.
China remains firmly in control of the bullion price action. Recent data reveals that China’s private sector imported 543 tonnes of gold in Q1, while the People’s Bank of China added another 189 tonnes to its reserves during the same period.
SpaceX valued at US$200B
SpaceX is apparently in talks to sell some of its shares, aiming for a valuation of around US$200 billion, insiders told Bloomberg.
The company is looking at starting a tender offer in June, possibly selling shares at between US$108 to US$110 each.
However, details are still up in the air, and the offer’s size might change based on interest from potential buyers and sellers.
This valuation would top the US$180 billion from its more recent tender offer, putting SpaceX in the league of some of the world’s biggest publicly traded companies.
A tender offer is an event that allows employees and early backers of a private company the chance to sell their shares.
The shares could be sold to another investor or sometimes even back to the company itself, all at a fixed price. It’s basically a way for shareholders to cash in while the company’s still private.
In other markets …
Gold price fell by -2.15% to US$2,331.47 an ounce.
Oil prices eased by almost -1%, with Brent crude now trading at US$81.39 a barrel.
The benchmark 10-year US Treasury yield rose by 6 basis points (bond prices lower) after the PMI report to 4.48%.
The Aussie dollar dropped -0.20% to 66.08 cents.
The iron ore price retreated by -2% to US$119.55 a tonne.
Bitcoin meanwhile slipped by -2.5% in the last 24 hours to US$67,631, while Ethereum rose by +1.5% to US$3,809.
5 ASX small caps to watch today
Althea Group (ASX:AGH)
Althea announce that its wholly-owned subsidiary, Peak Processing, has signed a binding JV deal in the US with Flora Growth (NASDAQ:FLGC) to enter the thriving legal hemp derived delta-9-THC cannabis-infused beverages market. The US cannabis beverages market is valued at US$966.92 million in 2024, and projected to reach US$19.06 billion by 2028.
Tivan (ASX:TVN)
Tivan and CSIRO, Australia’s national science agency, have successfully completed a significant development testwork program for the TIVAN+ critical minerals processing technology. Testwork outcomes have exceeded expectations, delivering excellent results that confirm the technical viability of processing Speewah concentrate with the TIVAN+ technology.
Oceania Healthcare (ASX:OCA)
Oceania advised that Suzanne Dvorak has today been appointed as Chief Executive Officer. Dvorak has been in the Australian aged care and retirement living sectors for the past decade, which included leading the single largest residential aged care provider in Australia. She has most recently been an external advisor at Bain & Company in Melbourne.
Yandal Resources (ASX:YRL)
RC drilling has been completed across the Oblique and Quarter Moon Prospects within the company’s Ironstone Barwidgee Gold Project. Results from the RC drilling program will be returned over the coming weeks. Yandal says it remains well funded with approximately $7m in cash, and is well positioned to maintain a high level of exploration throughout 2024.
PlaySide Studios (ASX:PLY)
Playside and Warner Bros have announced the development of a new “Game of Thrones” real time strategy game for the PC. Featuring multiple game modes, fans will be able to play on their own, team up with friends or engage in multiplayer skirmishes.
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