ASX predicted to rebound after modest gains in New York
Levi Strauss and Target’s shares plunge
Treasurer Jim Chalmers approves ANZ’s acquisition of Suncorp Bank
There’s hope the ASX can snap its two-day losing streak and rise when the market opens on Friday, tracking modest gains in New York. At 8am AEST, the ASX200 futures contract was pointing up by +0.3%.
Overnight the S&P 500 and the blue chip Dow Jones index inched higher by +0.1%, and the tech-heavy Nasdaq lifted by +0.4%.
In company news, Levi Strauss & Co plunged by -15% after announcing tight quarterly sales too narrow for expectations.
Nike Inc also plunged by -12% post-market. Nike exceeded expectations for earnings in Q4, but its sales figures and Q1 guidance fell below expectations due to weaker consumer demand in North America and China.
Online comics company Webtoon Entertainment jumped +9.5% on its Nasdaq debut. Webtoon is a digital platform where comic book and manga artists can publish their creations, reaching global audiences.
Customers of major US telecommunications companies like AT&T, T-Mobile US, and Verizon have encountered difficulties connecting to their networks while traveling abroad, it was discovered last night.
Target is tightening its rules to combat shoplifting in its US stores. Now, if someone tries to steal items totalling US$50 or more, store employees are instructed to intervene. This is a change from the previous threshold of $100. Target, based in Minnesota, has been concerned about how theft is affecting its profits.
Meanwhile, the market is cautiously anticipating the release of the US PCE (Personal Consumption Expenditures) index later tonight (US time),
If the PCE data falls short of expectations, experts warned of potential stagflation headlines. However, if estimates are met or exceed expectations, it could smooth the market’s transition into July.
“Still, an overbought market and relatively expensive market based on just a handful of mega names may need to recalibrate, and allow other sectors to co-exist with them or even begin to lead the market,” said Quincy Krosby at LPL Financial.
Chalmers approves ANZ-Suncorp deal
Back home, Treasurer Jim Chalmers has given the green light for ANZ’s acquisition of Suncorp Bank, with certain conditions attached.
These conditions include a 3-year prohibition on closing regional branches, a requirement for ANZ to join Australia Post’s banking network, and a commitment to maintaining employment levels across Australia for three years following the transaction.
Chalmers said his decision was based on comprehensive advice from Treasury and regulators, as well as extensive consultation over nearly two years with industry stakeholders including the Finance Sector Union and the Queensland Government.
While acknowledging competition concerns raised by the ACCC earlier, the Australian Competition Tribunal ultimately determined that the acquisition was unlikely to significantly reduce market competition.
“As the ACCC has since publicly acknowledged, the tribunal’s decision demonstrates the checks and balances of an administrative merger approval process,” Chalmers said in a statement.
Back to markets …
Gold price rose by around +1.2% to US$2,326.10 an ounce.
Oil prices climbed by +1.25%, with Brent crude now trading at US$86.30 a barrel.
The benchmark 10-year US Treasury yield retreated by around 4 basis points (bond prices higher) to 4.29%.
The Aussie dollar was steady at 66.49 cents.
The iron ore price slipped by -0.9% to US$105.65 a tonne.
Bitcoin meanwhile rallied by +1% in the last 24 hours to US$61,550 while Ethereum rose by almost +2% to US$3,449.70
5 ASX small caps to watch today
Pointerra (ASX:3DP)
Pointerra has been awarded a $1.63 million contract by the US Department of Energy (DOE) for a program aimed at modelling electric grid resilience investment scenarios by utilities. This initiative, utilising Pointerra3D technology, will assess the effects of different resilience investments amidst projected climate changes. The goal is to establish a scalable best practice framework applicable across various regions in North America.
Genex Power (ASX:GNX)
Genex has successfully refinanced its senior debt for the Kidston Solar Project (KS1) and Jemalong Solar Project (JSP) with a new $162 million facility lasting 5 years. The refinancing, provided by Deutsche Zentral-Genossenschaftsbank (DZ BANK) and Westpac, reflects their confidence in Genex and its solar projects. This move allows Genex to repay its subordinated loan, improve its capital structure, and secure favourable interest rates hedged until 2030, with the facility maturing in June 2029.
Legacy Iron Ore (ASX:LCY)
Legacy announced the completion of reverse circulation (RC) drilling at its Patricia North tenement. This tenement is strategically important for potentially increasing the gold resources at the Mount Celia Gold Project, where mining began in November 2023. A total of 1,686 meters were drilled to better define exploration targets and test for gold mineralization continuity and extensions identified in previous exploration and drilling. Samples collected will update geological and mineralization models to guide future exploration efforts. These samples will undergo geochemical analysis at a Kalgoorlie laboratory, with results expected in Q3 2024.
M3 Mining (ASX:M3M)
M3M has discovered new bedrock gold anomalies at its Edjudina Gold Project in WA, with drilling revealing samples up to 4m @ 0.55g/t Au. The El Capitan gold trend has expanded to 4.5km, and exploration is now focused on the recently granted Old Plough Dam Prospect near Carosue Dam gold operations.
Adore Beauty (ASX:ABY)
Adore Beauty is acquiring iKOU for $25 million in cash, with $20 million paid upfront and the remainder in 18 months. iKOU, based in the Blue Mountains, is known for its premium range of over 300 organic skincare, bath, body, and home fragrance products. The brand, which promotes clean beauty with Australian-made and cruelty-free items, operates retail boutiques in key locations and sells through its website and luxury spa partnerships. This acquisition expands Adore Beauty’s offerings into the wellness sector.
The post Market Highlights: Retailers Nike and Levi plunge; Chalmers approves ANZ-Suncorp deal appeared first on Stockhead.
