ASX to open over 1pc this morning after a big rally on Wall Street
Apple slid after reporting more losses
Ritu Vohora of T. Rowe Price talks soft landing
Aussie shares are poised to open higher again this morning, tracking more gains on Wall Street. At 8am AEST, the ASX 200 index futures was pointing up by +1.2%.
In New York, stocks rallied for the second straight day on hopes that US interest rates have peaked.
The three major gauges ended with strong gains after the Fed Reserve held interest rates steady at their highest range in 22 years on Wednesday.
The S&P 500 rose by +1.89%, the blue chips Dow Jones index was up by +1.7%, and the tech-heavy Nasdaq climbed by +1.78%.
To stocks, Qualcomm rose 6% after the chip designer provided a higher-than-expected revenue forecast for the December quarter at the midpoint of its guidance range.
Moderna fell 6.5% as declining Covid vaccine demand drove revenue lower in Q3.
Novo Nordisk rose 3% after record profits in Q3, but said supplies of its blockbuster Wegovy weight loss drug will continue to be restricted.
And just a few minutes ago, Apple slid 1% post-market after the company posted its fourth consecutive quarterly revenue decline, with US$89.5bn in revenue – a 1% decrease from the previous quarter. But Apple did enjoy a record US$43.81bn in iPhone revenue for the quarter.
Over the Atlantic, European sharemarkets closed higher across the board after the Bank of England held its rate steady at a 15-year high of 5.25%, as expected.
Will we have a soft landing, then?
With uncertainties on rates pretty much out of the way now, the question has turned to whether we will have a hard or soft landing.
Ritu Vohora of T. Rowe Price believes the narrative has shifted to hopes of either a soft landing, or no landing scenario.
“But are markets being too complacent?,” Vohora said.
“Many challenges remain. We have not felt the full impact of aggressive rate hikes, which act with a lag before filtering into the real economy.”
She said the path down to the Fed’s 2% inflation target is unlikely to be linear. With winter a few months away, a cold snap could easily see inflation inflect higher.
When investing, the tide can change rapidly in markets, says Vohora, adding that it’s prudent to be diversified across geography, style and asset class.
“A focus on quality, profits resilience, durable growth and relative valuations will matter most in building resilient portfolios.
“Small cap stocks have been shunned, and tend to do well in periods following regime changes.
“Being agile and diversified can help navigate conflicting narratives,” said Vohora.
In other markets…
Gold price rose 0.2% to US$1,985.74 an ounce.
Oil prices climbed 2.5%, with Brent trading at US$86.80 a barrel.
Iron ore futures jumped 2.65% to US$125.57 a tonne.
Base metals prices were mainly lower, with 3-month nickel futures falling by -65%, and copper futures by -0.01%.
The Aussie dollar climbed another +0.5% to US64.32c on the back of Fed pause.
Meanwhile, Bitcoin was down -1.2% in the last 24 hours to US$34,900.
5 ASX small caps to watch today
Austco Healthcare (ASX:AHC)
Austco Healthcare has won a $3.8 million contract to refresh the nurse call system for Jurong Health Campus in Singapore. With this contract win, Austco’s sales orders stand at a new all-time high of $40.7 million. A portion of the contract revenue will be recognized in the current financial year, with the remaining balance anticipated to be delivered in FY25.
Integral Diagnostics (ASX:IDX)
In Australia, Q1 revenue growth was 8.4% on pcp. In New Zealand, IDX achieved a 4.1% NZD increase in revenue vs pcp. IDX conceded that clinical staff shortages, particularly in regional areas, and cost inflation have continued into FY24. The company said it’s responding to these pressures by accelerating productivity and efficiency initiatives.
Findi (ASX:FND)
Findi’s existing SBI (State Bank of India) ATM outsourcing agreement was due to expire on 31 December 2023. This has now been extended until 30 September 2024, or until all existing ATMs are replaced under the SBI contract. The extended SBI contract is expected to deliver $27-$29 million in revenue and $9-$10 million in EBITDA over the 9-month period to 30 September 2024.
iTech Minerals (ASX:ITM)
Recent drill holes demonstrated increasing thickness and grade from north to south at Central Lacroma Graphite Prospect. Significant graphite results from the latest drill assays at Central Lacroma include: 93m @ 6.9% TGC from 64m, and 74m @ 7.7% TGC from 85m.
Catalina Resources (ASX:CTN)
Prospective Gold-Nickel-REE tenement licence has been granted near Laverton in WA. The tenement is located adjacent to the Mt Weld REE deposit, a major source of critical metals. Geophysical modelling has been conducted on small discrete magnetic anomalies, and cumulate textured ultramafic unit was identified as a nickel target.
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