Selloff on Wall Street after higher than expected PPI
All eyes will be on Nvidia’s earnings later this week
Earnings season also hots up for ASX investors this week
The ASX is poised to rise modestly at the open on Monday despite a selloff on Wall Street. At 8am AEDT, the ASX 200 index futures contract was pointing up by +0.1%.
On Friday, the S&P 500 fell by -0.48%. The blue chips Dow Jones index was down by -0.37%, and the tech-heavy Nasdaq tumbled by -0.82%.
US stocks fell after the Producer Price Index, a key gauge measuring wholesale inflation, jumped 0.3% in January from the prior month. This was much higher than the 0.1% rise expected by economists.
“If we see continued strength in the inflation data, it’s possible that the Fed could push its rate cuts into 2025,” said Clark Bellin of Bellwether Wealth.
Among the biggest stock movers was Coinbase, which rose +9% after it reported its first quarterly profit since 2021.
Roku, the TV streaming company, plunged -24% after the company slightly missed its quarterly guidance estimates for gross profit, citing more competition from tech giants like Amazon.
AI cloud storage company, Super Micro Computer, slumped by -20% after Wells Fargo said the upside related to AI has already been reflected in its price.
All eyes will now be on Nvidia, which is set to report its quarterly earnings on February 21st (Thursday AM AEDT).
Quick one on reporting season
Back home, this week will also see more than 80 ASX companies report their earnings. On schedule today include Westpac, Cochlear, and A2 Milk.
ASX-listed companies must report their financial results to shareholders at least twice a year, within two months of the end of their balance sheet date.
As most companies have balance sheet dates of 30 June, the main reporting season takes place in August when many companies release their full-year results. Half-year results generally are released in February.
“Not all companies report during these periods as not all have balance sheet dates at the end of June,” said a note from Commsec.
“A company’s website will often have information about when it is scheduled to release earnings reports.”
Most companies release several documents to help shareholders and analysts in their assessment of information.
“The main document is the statutory result, often called the ‘preliminary final report’. Some companies release their annual report at the same time.”
“As a shareholder, or would-be shareholder, it’s important to know as much as you can about a company’s financial health to inform your views about its potential to perform in line with your investment strategy,” Commsec noted.
In other markets …
Gold price rose by +0.45% to US$2,013.12 an ounce.
Oil prices were up +0.5%, with Brent now trading at US$83.30 a barrel.
The benchmark 10-year US Treasury yield lifted by 4 basis points (bond prices lower) to 4.28%.
Iron ore futures lifted by +1.3% US$131.10 a tonne.
The Aussie dollar jumped by +0.1% to US65.35c.
Meanwhile, Bitcoin rose by +0.5% in the last 24 hours to US$51,790.
5 ASX small caps to watch today
Nuix (ASX:NXL)
For H1, statutory revenue was $98.4m, up 12.3% on the pcp. Underlying EBITDA was $28.4m, up 12.8% on the pcp. However, statutory NPAT was a loss of -$4.8m, down from a profit of $1.3m in the pcp. Nuix says targets for the rest of FY24 include targeting ~10% in ACV (annual contract value) and statutory revenue growth in constant currency.
Infini Resources (ASX:I88)
I88 announced the staking of four large extensions of radiometric anomalism at its 100% owned Portland Creek uranium project in Canada. The highly prospective project has now grown by 58% to 113km2. All four newly staked areas are located adjacent to existing mineral claims where Infini is targeting the discovery of new economic uranium deposits.
Argosy Minerals (ASX:AGY)
Argosy provided an update on the key developments at its Rincon Lithium Project. Around 2,000tpa operational and associated testing works are progressing, with positive results being achieved to improve operational performance and increase production operation. Environmental EIA approval for the 10,000tpa operation expansion is expected near term. Following recent substantial resource increase, production forecast upgrade works are now being conducted.
Marmota (ASX:MEU)
Marmota has announced the results of the Yolanda Prospect project review by uranium specialist, Mark Couzens. An extensive uranium-bearing Eyre Formation palaeochannel has been interpreted from the Yolanda project review, with a south to north trend heading towards Marmota’s Saffron Uranium Deposit. The Yolanda uranium exploration target stretches over 8km long and more than 1km wide. Drilling to date has shown that high-grade uranium mineralisation exists in flood plains on the sides of the palaeochannel.
Variscan Mines (ASX:VAR)
A comprehensive geological assessment and structural targeting study has been completed by world-renowned expert, Dr Brett Davis. Work has resulted in a significantly improved understanding of the controls on multi-phase Zn-Pb mineralisation at the San Jose mine in Spain. Geological and structural controls point to new targets within the mine. The study has also identified numerous target zones within the broader Novales – San Jose – Udias corridor.
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