ASX set to bounce back on Wednesday
Tech stocks will be in focus today after gains in Apple and Tesla stocks
Bitcoin nears US$44k, while AUD slumps to US65c handle
Aussie shares are poised to bounce back at the open on Wednesday after a mixed session in New York. At 8am AEDT, the ASX 200 index futures was pointing up by +0.5%.
Overnight, the S&P 500 fell by -0.06%, the blue chips Dow Jones index was down by -0.22%, but the tech-heavy Nasdaq rose by +0.31%.
Tech stocks will be in focus today after gains in Apple and Tesla stocks.
Apple rose by over 2% to a 4-month high, with its market cap topping the US$3 trillion mark once again.
Tesla closed 1.3% higher after reporting that insurance registrations for its cars in China continue to pick up, totalling 17,600 last week, up 5.4% from 16,700 the prior week.
Robinhood Markets Inc surged over 10% after reporting that November crypto notional trading volumes were 75% above October levels.
Dell Technologies Inc closed flat after Bloomberg reported that 58-year old founder Michael Dell is taking steps to donate Dell Technologies Inc. shares worth as much as US$1.74 billion.
US Treasuries meanwhile resumed their rally, with the benchmark 10-year yield plunging by 10bp (bond prices rise).
This comes after data last night showed that US job openings slid to 8.73 million in October, down from 9.35 million openings in September.
Stocks will be under pressure in 2024 – expert
As job openings decline in the US, the strength of consumer sentiment will increasingly be tested as we move through 2024.
This will begin to impinge on many companies’ ability to maintain margins as costs rise, and price increases become more difficult to sustain.
Darren Thompson, Chief Investment Officer at Equity Trustees Asset Management, said that whilst not all companies are created equally, this will be a headwind for corporate earnings and potentially a greater impact on dividends as Boards exercise caution.
“Financial Year 2023-24 market earnings are expected to be down moderately (~6%) on FY23 ,with low to no growth anticipated in FY25,” said Thompson.
In Australia, Thompson expects the market will be impacted by 3 significant factors:
The first is the significant weighting to the Bank sector, which is anticipated to have earnings decline due to a combination of anaemic credit growth, higher costs, increased competition, and a tick up in bad debts.
Second, there will be margin pressures for many businesses, as rising costs are less able to be passed on to a weakening consumer.
And thirdly, there are potential weaknesses in commodity prices, notably iron ore. The latter factor being volatile and heavily dependent on China policy and economic conditions.
“As a result, we expect equities to trade on reasonable valuation multiples,” said Thompson.
“However, they may come under pressure if the market’s consensus view of a soft landing fails to materialise, and economic conditions worsen.”
In other markets …
Gold price fell by -0.5% to US$2,019.36 an ounce as it retreats from all-time high levels earlier this week.
Oil prices slumped by another -1%, with Brent now trading at US$77.12 a barrel.
Iron ore futures rose +0.25% to US$130.77 a tonne.
The Aussie dollar fell -1% and is now back to the US65c handle at US65.52c. This comes after the RBA decided to pause on rate hike yesterday.
Meanwhile, Bitcoin was up 4.3% in the last 24 hours to US$43,825.
BTC is now up 165% in the last 12 months, and has been rising recently as investors see a rising chance of rate cuts, which has reignited interest in cryptos.
5 ASX small caps to watch today
Errawarra Resources (ASX:ERW)
New LCT pegmatite was discovered at Andover West, 600m east of high-grade Raiden LCT Pegmatite, following the receipt of reconnaissance rock chip and soil samples. Regional reconnaissance soil sampling has also identified new lithium target areas within the soil covered terrain along the southern margin of the Andover Mafic Intrusion.
Chalice Mining (ASX:CHN)
The Government of Western Australia has approved the Stage 3 Conservation Management Plan (CMP) and Programme of Work (PoW) for exploration drilling at Chalice’s 100%-owned Julimar Nickel-Copper-PGE Exploration Project in WA. The drilling program is expected to continue for at least the next six months.
SRJ Technologies (ASX:SRJ)
SRJ announced the award of two contracts with US-based companies for the supply of its BoltEx® product, marking SRJ’s entrance to the US market. The combined value of both contracts is $225k (USD$126k). These two initial contract awards mark a major milestone in SRJ’s strategic outlook as its provides reference points to target the USA’s significant addressable market in 2024.
Findi (ASX:FND)
Findi says total merchants on its platform were 18,062 at 30 November, representing 90% growth since 30 June. Merchant acquisition is tracking above 2,000 per month. Gross transaction volume (GTV) is currently at an annualised rate of $160m, with further 25% growth expected by financial year-end.
DevEx Resources (ASX:DEV)
Drilling at the U40 Prospect at DEV’s 100%-owned Nabarlek Uranium Project in the NT continues to define significant uranium mineralisation on the eastern margin of the U40 Fault (East Zone), including:.6m @ 0.43% eU3O8 (4,300ppm) from 257.3m down-hole, and 7.0m @ 0.42% eU3O8. Importantly, the high-grade intercept in RC220 represents the deepest hole of the U40 campaign, demonstrating that high-grade uranium mineralisation remains open at depths well below the current level of drilling.
The post Market Highlights: Tesla up on China data, Bitcoin nears US$44k, and 5 ASX small caps to watch today appeared first on Stockhead.
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