ASX SPI Futures pointing lower after US PPI comes in hot
More tech losses on Wall street overnight; Tesla cops another downgrade
Oil prices keep rising, iron ore keeps falling
The ASX looks set to inherit some muddled NYSE sentiment for a weaker opening in Sydney on Friday.
At 8.30am in Sydney the ASX Futures (SPI) index was SPI 56 points or 0.73% lower at 7,665.00.
On Wall Street overnight maudlin US stocks ended slumped at the bar, depressed but not drastically lower at the end of a trying Thursday.
The tech-heavy Nasdaq and the broader S&P500 both lost 0.3%. The Dow Jones Industrial fell over 100 points or 0.35% to end its 3-day winning streak.
But it wasn’t total murder on the dancefloor, despite the hotter-than-expected PPI inflation data brought rising bond yields back into play, with losing 0.%.
Factory gate prices in the States rose by 0.6% in February, double January’s 0.3%, flaying market expectations and the most since August.
The core rate increased by 0.3%, a slowdown from the 0.5% advance observed in January, but above market expectations of 0.2%.
Also overnight, initial jobless claims came in unexpectedly lower, but retail sales disappointed. In a box these are ‘stagflationary’ numbers.
The PPI report is the last decent economic crumb to be released ahead of the Fed’s upcoming policy meet next week.
That’s left US traders once more thumping their abaci, again trying to pinpoint the timing of interest rate cuts. Surely the mood is coalescing around the reality that the final mile to the Fed’s 2% inflation target is a long and possibly painful one.
In New York, the selling focused on Property stocks, Utilities, and Healthcare – the three major laggards.
Oil prices at 4-month highs lifted the Energy names.
In techland, Nvidia (NVDA) lost more than 3.3%, while Wells Fargo put the evil eye on Tesla (TSLA), down 4.4% on what looks like absolutely no sales growth for the year ahead.
Apple (APPL) rose 1% for a change. Amazon (AMZN) advanced for a second day and Microsoft (MSFT) gained 2.5%. Software maker Adobe (ADB) clipped early gains and finished 0.5% lower ahead of its earnings release.
Oil prices rise, iron ore under pressure, copper surges
Oil futures are at their highest since early November last year.
Oil prices keep rising, as domestic US demand improves and the squeeze continues on the geopolitical front.
A more bullish IEA is doing its bit. The agency increased its 2024 demand-growth estimate for crude oil to 1.3 million barrels a day from 1.2 million, and revised its forecast to a slight deficit this year instead of a surplus.
Brent crude is at $US85.03/barrel and the US WTI is at $US81.26/barrel.
Iron ore prices dropped almost 3.5% overnight pushing beyond six months lows with the commodity currently trading at US$107/tonne.
The bread and butter of the ASX200 has lost almost 20% in one month on the Dalian exchange.
Copper prices keep surging, reaching the highest in more than 7 months after the cream of China’s state-run copper smelters agreed to reduce production at unprofitable facilities.
The copper price is up 2.94% to US$4.00/ounce.
Gold is down 0.57% to US$2,161.48/ounce.
The US 10-year bond yield is higher at 4.292%.
Bitcoin briefly dipped below $US70,000.00 this morning… maybe after a British judge decided that Queenslander Craig Wright is in fact not bitcoin inventor Satoshi Nakamoto.
The Aussie dollar lost about 0.6% overnight trading around US65.83 cents.
The the S&P/ASX200 ended 16 points or 0.2% lower to 7,713.00 points.
Three Stocks to watch on Friday
PLS says it accepted a pre-auction offer for spodumene concentratebnwith the buyer paying the equivalent of $US1200 a tonne.
Thursday’s sudden Battery Materials Exchange (BMX) auction showed PLS is back chasing prices that go beyond the spot.
It accepted a pre-auction offer for 5000 dry metric tonnes of 5.5% Li2O con at US$1106/t, equivalent to US$1200/dmt including grade adjustments and freight.
Naturally Josh Chiat has everything you’ll need to know of PLS’ Battery Materials Exchange action.
The online auction was actually due next week, but Pilbara told the ASX it had already entertained “a number of pre-auction offers”.
Iress is offloading its UK mortgages business to Bain Capital for $164.3mn.
The financial software maker got into UK mortgages about 10 years ago. It was pegged as a key part of a transformation that didn’t transform.
But CEO Marcus Price says the move is part of a new transformation which involves plugging IRE’s current debt position, as well as providing ballast for its core wealth, market data and super segments.
BC8 is getting hold of some cash.
BC8 is an aspiring goldie with a “vision of being the dominant player in three prolific gold districts – the Paulsens Gold Operation in the Pilbara, the Coyote Gold Operation in the west Tanami and the Kal East Project east of Kalgoorlie.”
The restart of Paulsens is the first step in realising this vision, the company says – so it’s fast tracking funding to accelerate the restart of Paulsens in the current lucrative gold price environment and to further streamline the ODI approval process.
The company says to achieve this it’s canned equity placements with Mingjin and Southeast Mingqing “by mutual agreement,” and replacing them with a $6mn increase in the Sundy unsecured convertible note facility to $15m with the $6m to be received in May 2024 (per Black Cat shareholder approval).
The first $9mn of this facility has already been received and is being used to refurbish Paulsen’s processing facility.
BC8 is also planning to issue some 133.3m fully paid ordinary shares at $0.225 per share for $30m to Sundy.
The drastic moves will be subject to ODI approval, FIRB approval and Black Cat shareholder approval (as supported by an Independent Expert’s Report).
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