ASX to open slightly lower after Wall Street fell overnight
Fed’s Christopher Waller said the central bank won’t rush to cut rates
And here are the most crowded trades in the market
Aussie shares are poised to open flattish on Wednesday as Wall Street closed lower. At 8am AEDT, the ASX 200 index futures contract was pointing down by just 3 points.
In New York overnight, the S&P 500 fell by -0.37%. The blue chips Dow Jones index was down by -0.62%, and the tech-heavy Nasdaq was also lower by -0.19%.
Traders revised their views on rates after Fed Reserve Governor Christopher Waller said the central bank won’t rush to cut interest rates until it is clear lower inflation will be sustained. However he admits that the Fed is “within striking distance” of the 2% inflation goal.
“When the time is right to begin lowering rates, I believe it can and should be lowered methodically and carefully,” he added.
To stocks, Boeing tumbled by another -8% after naming a retired U.S. Navy admiral, Kirkland Donald, as a special adviser for improving the quality control on its planes.
Goldman Sachs rose +0.7% after topping Q4 revenue estimates on better-than-expected asset management division results.
Morgan Stanley meanwhile dipped -4% after its Q4 profits fell by almost a third, impacted by a one time charge of US$535 million.
The most crowded trades in the market
Bank of America’s January survey of fund managers has identified the most crowded trades in the market:
Long Magnificent Seven at 52%
Short China stocks at 24%;
Long Japan equities at 7%
Long 30-year US Treasuries at 5%.
“An outright majority (52%) of these investors sees the Federal Reserve as the most important driver of equity prices in 2024,” said the note from BofA.
“A 79% majority of fund managers expect the global economy to experience either a “soft” or “no” landing in 2024, a nine-month high. Parallel with this, only 17% expect a “hard” landing, a nine-month low, the survey said.
In other markets …
Gold price retreated by -1.3% to US$2,027.63 an ounce.
Oil prices fell by -1%, with Brent now trading at US$77.62 a barrel.
The benchmark 10-year US Treasury yield rose by 10 basis points (bond prices lower) to 4.05%, on the back of Fed’s Waller’s speech.
Iron ore futures reversed yesterday’s losses as it lifted by +1.5% to US$129.35 a tonne.
The Aussie dollar slumped by over -1% to US65.85c.
The US dollar has now staged the biggest rally since March, as traders questioned the Fed Reserve’s cuts already baked into the greenback.
Meanwhile, Bitcoin was up +1.5% in the last 24 hours to US$43,372.
5 ASX small caps to watch today
Kinatico (ASX:KYP)
The pre-employment screening provider reported profit to half year of $0.4m, up 136% on pcp. Kinatico’s profit has been earned from half-year revenue of $14.3m,an increase of 6% on the pcp. SaaS revenue over the first half was $4.4m (up 159% on pcp), and representing 31% of the total revenue.
Haranga Resources (ASX:HAR)
Haranga reported discovery of new significant uranium anomalies at Mandankoly prospect, located within the 1,650km2 Saraya Uranium permit in Senegal. Two notable uranium anomalies revealed through infill survey, comprising 4,065 termite mound samples on a 200m x 50m grid. The uranium concentrations in these anomalies have been recorded at up to 15ppm, seven times higher than the 2ppm background levels – each of these anomalies extends approximately 600m in length.
Basin Energy (ASX:BSN)
Field work has now commenced for Basin’s winter program across the entire of Basin’s land portfolio. A high-resolution ground Stepwise Moving Loop Time-Domain Electromagnetic (EM) survey is now underway at the North Millennium and Marshall projects, and final preparations are being made for phase 2 drilling at the Geikie project. The company says positive uranium market sentiment continues to build, with U3O8 SPOT price exceeding US$105/Lb.
Everest Metals (ASX:EMC)
Everest says a current AUD gold price of over $3,000 per ounce with a favourable outlook materially changes the economic outcomes for developing the Mt Dimer Taipan project. The company is now committed to the development of its 100% owned project, with a view to commencing a profitable mining operation in the medium term. The Mt Dimer Taipan project currently contains a JORC 2012 compliant resource of 722kt @: 2.10 g/t Au for 48,545 ounces, and 3.84 g/t Ag for 89,011 ounces.
Amplia Therapeutics (ASX:ATX)
The first patient in Ampli’s Phase 2a portion of the ACCENT trial has begun dosing with narmafotinib. The ACCENT trial is examining the combination of Amplia’s best-in-class FAK inhibitor narmafotinib in combination with standard-of-care chemotherapy in first-line patients with advanced pancreatic cancer.
At Stockhead we tell it like it is. While Haranga Resources and Basin Energy are Stockhead advertisers, they did not sponsor this article.
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