ASX to open higher as US earnings results continue to impress
Apple rose 6pc after topping analysts’ expectations
Tailwinds for Bitcoin and cryptos ahead
Aussie shares are poised for a higher open on Friday as corporate earnings on Wall Street continue to impress. At 8am AEST, the ASX200 futures contract was pointing up by +0.5%.
Overnight, Wall Street rallied across the board. The S&P 500 rose by +0.91%, the blue chips Dow Jones index was up by +0.85%, and the tech-heavy Nasdaq surged ahead by +1.51%.
Stocks are recovering from Wednesday’s volatile session dominated by Jerome Powell’s message that had left more questions than answers on the Fed’s likely rate path.
Earnings season continues, as Apple topped Wall Street’s Q2 expectations. The company reported an an all-time high on services revenue, but the iPhone, iPad, and wearables missed expectations.
Of note was Apple’s additional program to buy back US$110 billion of its stock. Apple’s stock price rallied by +6% in post-market trading.
Chip stock Qualcomm rose roughly 10% after the company beat quarterly expectations and guided the market to an upbeat sales outlook.
Shares of Paramount Global jumped +13% after a potential bid from Sony Pictures Entertainment and private equity firm Apollo Global Management was reported.
Block Inc lifted +7% post-market after disclosing its intentions to reinvest a portion of its Bitcoin-derived profits back into the cryptocurrency, showcasing Jack Dorsey’s firm views on the prospects of BTC.
The biggest mover last night however was Carvana, an online used car retailer based in Arizona, which rose over +30% after posting record quarterly results.
Tailwinds ahead for Bitcoin
The price of Bitcoin has dropped to its lowest level since February 27 yesterday, starting Thursday’s trading at US$57,405. It’s now trading at US$59,180.
The decline comes on the back of fading expectations of future Fed Reserve interest rate cuts. Outflows from Bitcoin exchange-traded investment funds have continued for five consecutive days.
But there are tailwinds ahead, according to Rania Gule, a market analyst at XS.com
“I believe the enactment of the cryptocurrency payment law in the United States will allow banks like JPMorgan to enter the crypto market.
“It’s worth noting that one of the main reasons for Bitcoin’s decline is the former CEO of Binance, Changpeng Zhao, being sentenced to four months in prison after the US Department of Justice demanded a three-year prison sentence,” Gule said.
Gule also believes that the expectation of future interest rate cuts could significantly support Bitcoin and cryptocurrency markets.
“I also expect to see stability for a month or two in Bitcoin prices, trading in a volatility range of US$10,000 on both sides.
“And perhaps the positive impact of the halving, which led to a decrease in Bitcoin supply, will show in the latter months of this year or even early next year,” Gule added.
In other markets …
Gold price fell by -0.8% to US$2,304.39 an ounce.
Oil prices also rose around half a percent, with Brent crude now trading at US$83.83 a barrel.
The benchmark 10-year US Treasury yield was down 6 basis points (bond prices higher) to 4.58%.
The Aussie dollar surged further by +0.65% to US65.69 cents.
Bitcoin meanwhile was up +2% in the last 24 hours to US$59,180.
5 ASX small caps to watch today
Cash Converters (ASX:CCV)
Quarterly revenue was up 19% pcp to $93.0m, driven by Australian store network momentum and contribution of strong trading results from the UK franchise network acquisition (Capital Cash) completed in July 2023. Gross loan book was up 9% pcp to $291.7m, on the back off strong customer demand for credit.
Infini Resources (ASX:I88)
Geophysical surveys including high resolution UAV drone magnetics have been approved at Portland Creek Uranium Project by the Newfoundland Government in Canada. Initial reconnaissance field work was successfully completed despite adverse weather, with field crews to recommence activities including soil sampling and geological mapping/sampling within a week.
Patagonia Lithium (ASX:PL3)
Patagonia announced the receipt of outstanding assays from the first drill well at the Formentera Lithium Project in northern Argentina. The company reported 591ppm lithium assay in 21m aquifer zone. It also reported an interval of 200m with lithium values over 235ppm, calling it “truly an indication of a world class project”.
Haranga Resources (ASX:HAR)
Infill termite mound sampling (TMS) at Diobi East has returned encouraging uranium concentrations (52 ppm eU3O8 pXRF) of up to 20 times above background, with auger drilling to follow in the near-term at the Saraya Project in Senegal. To date, 8 regional uranium (pXRF) anomalies have been delineated at the project.
Count (ASX:CUP)
The accounting company has today updated the market on the cost synergy benefits expected to be achieved following the integration of Diverger Limited. Annualised expected cost savings have been upgraded to approximately $4m, to be achieved in FY25. This represents a considerable increase from the initial $3m expectation announced at the time of the transaction.
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