ASX200 futures point downwards despite Wall Street’s rally
Trump Media surged +31pc after Trump’s assassination attempt
Fed Chair Powell hints at potential rate cuts from September
The ASX200 index is expected to retreat modestly from yesterday’s record levels when the market opens on Tuesday. At 8am AEST, the ASX200 futures contract was pointing down by -0.1%.
Overnight, Wall Street rallied as traders factored in the possibility of Donald Trump winning the election after he survived an assassination attempt.
The market believes that if Trump wins the election, he will likely reduce taxes, increase trade tariffs, and relax regulations.
Apple CEO Tim Cook meanwhile seems to think the election’s a done deal, calling for “President Trump’s” rapid recovery.
I pray for President Trump’s rapid recovery. My thoughts are with him, the other victims and the Trump family. I strongly condemn this violence.
— Tim Cook (@tim_cook) July 14, 2024
The S&P 500 was up by +0.28%, the blue chips Dow Jones index rose by +0.53% to another all-time high, and the tech-heavy Nasdaq lifted by +0.4%.
Trump Media & Technology soared by +31%, hitting its highest level in five weeks, following the weekend’s incident.
Goldman Sachs climbed +2.5% after announcing a 150% increase in profits driven by strong performance in investment banking, indicating that Wall Street is recovering from a two-year downturn.
BlackRock fell -0.6% despite exceeding profit expectations as assets under management reached a new high of US$10.6 trillion.
Meanwhile, investors also paid close attention to Fed Chair Jerome Powell’s remarks at a Washington, D.C. event last night.
Powell told the audience that recent inflation data shows progress in controlling inflation. His speech seemed to reinforce market expectations that rate cuts might begin as early as September.
“If you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects, which will probably drive inflation below 2%,” Powell said.
Morningstar’s pulse report on the mining sector
Morningstar has released the latest pulse report on the mining sector by its analyst Jon Mills, which includes an outlook for commodities.
Mills notes that balance sheets are strong, and dividends and buybacks are a priority for many companies in the sector.
However, he also said that high commodity prices encourage miners to pursue growth opportunities.
Merger and acquisition activity has increased, as evidenced by BHP’s unsuccessful attempt to acquire Anglo American during the quarter.
Commodity prices meanwhile diverged again in the quarter.
Copper prices rose due to supply issues and hopes of faster global growth, while gold prices also increased.
Iron ore prices remained broadly stable, and metallurgical coal prices dropped, despite strong steel production in China. However, compared to historical figures, prices remain elevated, supported by the cost curve.
During the quarter, most miners saw a decline in their share prices, and the average price-to-fair-value estimate fell to 1.05.
“Mineral sands miner Iluka is the cheapest of our coverage on concerns about slowing housing markets in China and the West,” wrote Mills.
“Gold miners Barrick and Newmont are also among the cheapest. Sales volumes have disappointed, inflating unit costs, though we think volumes and margins will improve.
“Coal miners New Hope and Whitehaven are undervalued too, with many investors averse to investing in coal. Both benefit from above-average thermal coal prices while Whitehaven has also bought two metallurgical coal mines from BHP,” he added.
Back to markets …
Gold price rose by around +0.4% to US$2,421.30 an ounce.
Oil prices were down -0.4%, with Brent crude now trading at US$84.85 a barrel.
The benchmark 10-year US Treasury yield ticked higher by 5 basis points (bond prices lower) to 4.24%.
The Aussie dollar slipped by -0.35% to 67.62 cents.
The iron ore price climbed by +0.6% to US$108.70 a tonne.
Bitcoin meanwhile surged by +5% in the last 24 hours to US$64,254, while Ethereum jumped +6% to US$3,457.40.
Trump has gained strong support from the Bitcoin and crypto community by pledging to safeguard the right to hold Bitcoin. He is also set to be a keynote speaker at the Bitcoin 2024 conference later this month.
5 ASX small caps to watch today
Encounter Resources (ASX:ENR)
Initial assays from wide-spaced aircore drilling at the Green target have identified niobium and rare earth element (REE) mineralisation hosted in carbonatite over a 1.6km stretch, which remains open for further exploration. Assay results from seven selected drill holes across four sections, spaced between 400 meters to 800 meters apart, have shown zones of niobium-REE oxide mineralisation. The mineralised trend at Green extends eastward towards the Stromness fault and remains open for further exploration. Additional assay results from aircore drilling on the eastern side of Green are expected in August.
Marmota (ASX:MEU)
Marmota announced the start of drilling at the potential new gold find at Goolagong. This follows the promising initial discovery hole (23MR184) drilled to a depth of 38 meters, where the last 2 meters revealed significant gold grades. The drilling program, which includes 15 planned holes, aims to further investigate this discovery. Once completed at Goolagong, the drilling rig will move to the main gold exploration areas at Aurora Tank and Campfire Bore.
Predictive Discovery (ASX:PDI)
Predictive has released new drilling results from its Bankan Gold Project in Guinea, focusing on the NEB and BC areas. The company conducted 1,019 meters of infill drilling at the BC deposit and 1,585 meters across 22 holes at the 800W target near NEB. These efforts are part of ongoing programs to refine Mineral Resources and support the Definitive Feasibility Study (DFS). Additionally, PDI has completed the Environmental & Social Impact Assessment (ESIA) and is now progressing towards obtaining the Exploitation (Mining) Permit for the project.
Wildcat Resources (ASX:WC8)
Wildcat has achieved promising results in whole ore flotation tests, with Li2O recoveries ranging from 79% to 84% at 1.0% to 1.4% Li2O grades, producing clean spodumene concentrates with low iron content (<0.5% Fe2O3) and no harmful elements. Testing at a coarse grind size (212μm) showed excellent recoveries, with plans for further optimisation.
A six-month test program used core samples from nine drillholes across Leia, demonstrating high-quality groundwater characteristics. Wildcat is advancing Pre-Feasibility Study activities, including expanded metallurgical testing, engineering designs, and environmental studies, aiming to enhance recovery processes.
Integrated Research (ASX: IRI)
IRI, a company providing performance management solutions for payment transactions and collaboration systems, has released its trading update for the fiscal year ending June 30.
Highlights include a strong rebound in Total Contract Value (TCV), Statutory Revenue, and EBITDA, surpassing previous guidance from May 2024. Cash at bank has risen to $31.9 million, marking a 72% increase year-over-year, reflecting robust cash conversion. These results set the stage for a strategic shift towards product-led growth, coinciding with plans for new leadership and CEO transition at an opportune time, the company says.
The post Market Highlights: Wall Street factors in a Trump win; and 5 ASX small caps to watch today appeared first on Stockhead.
