Market Highlights: CBA expects soft landing as CPI data looms, and 5 ASX small caps to watch today

ASX to open modestly lower today
World Bank said global growth will slow down in 2024
CBA expects a soft landing in Australia

Aussie shares are poised to open lower on Wednesday after a mixed session on Wall Street. At 8am AEDT, the ASX 200 index futures was pointing down by -0.2%.

Overnight, the S&P 500 fell by -0.15%. The blue chips Dow Jones index was down by -0.42%, but the tech-heavy Nasdaq climbed by +0.1%.

Commodity and financial shares led losses as a report from the World Bank said it expects global growth to slow from 2.6% in 2023 to 2.4% in 2024.

Amongst the biggest movers was Match Group Inc – the owner of dating app Tinder – up 3% after Elliott Investment Management was said to have bought a US$1b stake in the company.

Boeing continued its decline, down another -1.4% after air-safety officials probing last week’s Air Alaska fuselage blowout could not find four bolts, and several other airlines said they found loose parts.

Netflix was down -0.6% after being cut to “neutral” by Citigroup from a “buy”, citing risks in 2024 and 2025 related to revenue and higher cash content costs.

Spanish blood plasma firm Grifols SA crashed by -25% after hedge fund Gotham City questioned the company’s accounting, prompting the Spanish drugmaker to “categorically” deny any wrongdoing.

Back home, the focus today will be on the CPI report to be released by the ABS at 11.30am AEDT.

Aussie economy to be in good shape in 2024 – CBA

CBA is forecasting the annual rate of inflation back to 3% at the end of 2024, well ahead of the RBA’s current forecast and closer to the government’s latest forecast.

“We also expect the RBA to begin a modest monetary policy easing cycle from September 2024 onwards,” said CBA chief economist, Stephen Halmarick.

Chances are high that the RBA could achieve the desired “narrow path” or soft-landing in 2024, Halmarick added.

However, he warned that in 2024, we will have more than our fair share of risks and challenges, particularly geopolitical risks as well as the US presidential election.

“Despite these obstacles, the Australian economy remains in relatively good shape,” he said.

In summary, CBA is also forecasting that:

– The RBA will lower the cash rate by 75bp in H2 2024, starting in September, and a further 75bp in H2 25
– Employment growth is expected to remain positive in 2024, but the unemployment rate will move up to 4.5% by year-end 2024
– A slowdown in net migration
– Dwelling prices to rise by a further 5% in 2024, following 9.6% growth since the trough in February 2023.

In other markets …

Gold price rose by +0.1% to US$2,029.41 an ounce.

Oil prices lifted by +2%, with Brent now trading at US$77.56 a barrel.

The benchmark 10-year US Treasury yield climbed by 2 basis points (bond prices lower) to 4.02%.

Iron ore futures fell another -0.4% to US$137.40 a tonne.

The Aussie dollar tumbled by -0.5% to US66.86cc, ahead of the CPI reading today.

Meanwhile, Bitcoin was down by -2% in the last 24 hours to US$44,006.

5 ASX small caps to watch today

Pantera Minerals (ASX:PFE)
Pantera continues to grow its land position across America’s new lithium super-highway, with the Smackover Lithium Brine Project acres now growing by a further 16.6%. This means the Superbird Project has increased its land position by 127% since Pantera’s investment in Daytona Lithium, from 5,325 to 12,103 acres, with a further 9,000 acres under negotiation. Pantera will also purchase 100% of the share capital in Daytona Lithium, a deal which has been approved by Daytona Lithium shareholders.

High-Tech Metals (ASX:HTM)
HTM continues to progress its exploration work program and is planning to identify lithium bearing pegmatite occurrences at its Ketele LCT Project. The field team will begin with channel sampling of prospective bedrock over the course of January and February. The company said it will then move quickly to an advanced exploration phase, with these results to assist in identifying multiple drill targets at each of the potential occurrences.

eNova Mining (ASX:ENV)
ENV will proceed with the acquisition of Poços de Caldas REE and Lithium Valley tenements in Brazil. Due diligence has been carried out, and numerous pegmatite outcrops in the tenement were identified. The company believes the land package is prospective and of exceptional exploration value.

Brightstar Resources (ASX:BTR)
Inaugural diamond drilling program has commenced at Cork Tree Well at the Laverton Gold Project. Approximately 2,000m of diamond drilling program was designed for metallurgical and geotechnical test work, as part of the Pre-Feasibility Study underway. Assays for the RC drilling completed at the Menzies Gold Project in Q4 2023 are also due imminently.

Gladiator Resources (ASX:GLA)
Updated uranium grades have ahieved up to 7139ppm U3O8 in South West Corner Trench Assays. The highest grading samples are 7139 and 4442ppm U3O8, which confirm the potential for very high grades. Vertical intervals include: 1.95m with an average grade of 1776ppm U3O8 in Trench 1, and 1.40m with an average grade of 3170ppm U3O8 in Trench 2.

At Stockhead we tell it like it is. While Pantera Minerals and Brightstar Resources are Stockhead advertisers, they did not sponsor this article.

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