Market Highlights: S&P500 above 5,000 for first time, AI to be ‘bigger than internet’, and 5 small caps to watch

The S&P 500 closed above 5,000 for very first time
Nvidia is said to be building a new business focusing on cloud chips
Half of Aussie fundies believe AI will be bigger than internet

The ASX is poised to open flat on Monday.

On Friday, the S&P 500 rose by +0.57% and closed above the 5,000 mark for the very first time at 5,026.

The blue chips Dow Jones index was down by -0.14%, and the tech-heavy Nasdaq lifted by +1.25%. This was Nasdaq’s highest level since November 2021.

Driving the Nasdaq’s rise on Friday were Amazon and Nvidia, which rose by around +3% each.

Nvidia extended its ascent after Reuters reported that the company was “building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced artificial intelligence processors”.

Earnings season continues and PepsiCo shares slipped by -3.55% after sales missed analysts’ estimates amid price hikes.

Biotech stock Moderna fell -6.7% after analysts at UBS and TD Cowen said GSK and Pfizer had shown better results for the efficacy of their experimental respiratory syncytial virus (RSV) vaccine than Moderna.

Back home, reporting season on the ASX is about to crank up to another gear as CSL, AMP, CBA, Magellan and Telstra are scheduled to release their earnings this week.

AI to be ‘bigger than internet’

Natixis IM surveyed 500 investment professionals across 26 countries, including Australia, managing a total of US$34.8 trillion in funds.

Here’s a few interesting things revealed by the survey:

Around 75% of Australian fundies believe artificial intelligence (AI) it is here to stay, and 44% think it is an even bigger opportunity than the internet.

While the outlook on AI was positive, uncertainty remains the dominant theme for fundies in 2024. Recession is at the top of their list of concerns (52%), followed by the threat of war and terrorism (50%), and a central bank policy error (36%).

Most fundies (69%) think stock valuations still don’t reflect company fundamentals, and 65% expect stock market volatility to be even greater this year than last.

However, 62% believe their country’s economy will experience a soft landing.

And to shore up portfolios, fundies are not making wholesale changes to investment strategy. Instead, they’re making tactical tilts within asset classes to better prepare clients for a new environment.

In other markets …

Gold price fell by -0.5% to US$2,022.90 an ounce.

Oil prices lifted another half a per cent, with Brent now trading at US$81.90 a barrel.

The benchmark 10-year US Treasury yield was higher by half a basis point (bond prices lower) to 4.17%.

Iron ore futures was down -1% at US$127.00 a tonne.

The Aussie dollar climbed +0.3% to US65.18c.

Meanwhile, Bitcoin was down -0.2% in the last 24 hours to US$48,045.

5 ASX small caps to watch today

Turners Automotive (ASX:TRA)
Turners announced an upgrade to its FY24 guidance to a net profit before tax of at least NZ$48m, ahead of the NZ$45.5m achieved in FY23. Now an NZX top 50 company, this will be Turners’ fourth consecutive record profit result. Forecast dividend has been increased to NZ25 cents per share (+9% YoY), up from prior guidance of NZ24cps. The company says it is approaching a decade of sustainable dividend growth, with an 11% compound annual dividend growth rate since FY15.

Global Uranium and Enrichment (ASX:GUE)
Drill Permit applications have been lodged at GUE’s 100% owned Maybell Uranium Project in Colorado, USA. Drilling is expected in July, and will comprise up to 40 holes for 4,600m. Maybell historically produced 5.3 Mlbs U3O8 between 1954-1964 and 1976-1981. The proposed drill program will evaluate both extensions to shallow high-grade mineralisation to support conversion of the Exploration Target to a JORC compliant resource.

Iondrive (ASX:ION)
ION announced the appointment of Dr Ebbe Dommisse as its new CEO. Dr Dommisse brings over 25 years of diverse industry experience and a strong track 
record in operations and commercialisation. The appointment follows Dr Dommisse’s progress achieved, over the last three months, with the pre-feasibility study for the company’s lithium battery recycling technology. Former CEO Robert Smillie is retiring as CEO, but will continue with the company in a consulting capacity.

Argent Minerals (ASX:ARD)
Extensive silver, lead and zinc mineralisation has been confirmed by a rock chip reconnaissance program over the Sugarloaf Hill Prospect within the Kempfield Project in NSW. High-grade silver assays up to 98.1g/t Ag, 0.68% Pb and 0.35% Zn received, including highlights of: 98.1g/t Ag, 0.11% Pb in 3000076, and 43.3g/t Ag in 3000074.

SI6 Metals (ASX:SI6)
Maiden exploration (Phase 1) program will commence, targeting Ionic Adsorption Clays (IAC) enriched with REE at the Caldera Project in the Pocos de Caldas Alkaline Intrusive, Brazil. The project area is situated close to Meteoric Resources’ (ASX: MEI) world class Caldeira Project, as well as Viridis Mining and Minerals’ (ASX: VMM) Colossus REE project.

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