It has been a topsy turvy day on the ASX today, but ultimately the market finished higher after hitting a five-week low.
The S&P/ASX200 is up just 5.90 points today to 7,352.70. The index has lost 0.88% for the last five days but sits 3.57% below its 52-week high.
Top-performing stocks in this index were Inghams Group Ltd and QBE Insurance Group Ltd up 11.13% and 3.79%.
It was good news for iron ore miners also after Goldman Sachs (NYSE:GS) forecasted prices to hit $US150 per tonne by the second quarter. Overall Goldman Sachs has a six-month outlook for iron ore prices to be around $US135 per tonne.
The forecast is based on a seasonal boost in Chinese steel production from March.
Iron ore futures for an active March contract were up 0.4% to $US127.05 per tonne on Monday afternoon.
China's central bank injected funds via short and medium-term loans last week, which led the markets to bet on a stimulated demand for iron ore.
Early February figures released by Bloomberg suggest China's daily crude steel production at major mills expanded 3.8% from late January to 2.06 million tonnes – the highest in three months.
Enjoying the attention were BHP Group Ltd (LSE:BHP, ASX:BHP) up 1.18% to $48.56, Rio Tinto Ltd up 0.72% to $125.15 and Fortescue Metals Group (ASX:FMG) Ltd up 1.44% to $22.58.
3 things to watch for the week ahead
eToro market analyst Josh Gilbert shares his three things to watch in Australia in the coming days.
1. ASX200: The biggest week of reporting season
Australian reporting season only comes around every six months and next week is one of the most significant weeks on the calendar, with a host of big names reporting.
On Tuesday, we see the biggest of them all as BHP hands down its first-half results. Expectations are for revenue to fall 12% year over year to A$26.6 billion, with net income falling 23% to A$7.3 billion.
The focus from investors, though, will be on its outlook for the rest of the year, particularly with the re-opening of China and the demand heading into the second half of the year – as well as any changes to its monster dividend. Another name to watch will be Qantas, which is rapidly returning to profitability as borders reopen and prices remain elevated.
The flag carrier of Australia is expected to post profits of A$1.1 billion, a 350% jump from the year-ago period. This could mean the return of its dividend is on the horizon. Falling oil prices should also support profits in what looks set to be a record set of results for Qantas.
2. RBA minutes - more pressure for Philip Lowe
It’s been a tough week or so for RBA governor Philip Lowe as he came under fire from Federal MPs over the current rate hike cycle. The RBA’s guidance led households to believe that interest rates would remain low until 2024, since that time, house prices have fallen dramatically, and inflation has reached 7.8%, meaning many Australians are feeling the pinch.
The minutes from the RBA’s latest meeting will most likely show how the board believes that interest rates have further to go to bring inflation back to target. We will also see the hawkish tone around inflation from the board, as well as if there was a discussion around a larger hike in the February meeting.
The bottom line is that a soft landing is starting to slip away and further rate hikes will cause more pain to Australian households. For investors, it means a continued focus towards interest rate-sensitive sectors such as financials, who continue to reap the rewards as profit margins expand.
3. Bitcoin trades at six months highs, will it continue?
Bitcoin and crypto assets continued their impressive start to the year, as bitcoin soared to a six-month high, closing in on US$25,000.
With a seventh straight decline in US inflation, bitcoin saw some relief as investors took another fall in inflation to mean that the peak of the Fed’s interest rate cycle is in sight. After being beaten down in 2022, any sliver of good news is going a long way for crypto assets, with 2023 being the mirror opposite of last year's performance.
So can this run continue, or will the bull begin to lose steam? Ultimately, it feels like bitcoin and crypto assets may be getting slightly ahead of themselves, and any rising risk of recession will be a major headwind for risk assets, particularly crypto.
However, longer-term investors may not be troubled by short-term movements and instead are seeing value in the world's largest digital asset at a major drawdown.
Five at five
Taiton Resources finds evidence of large magmatic hydrothermal system; potential for silver and molybdenum
Taiton Resources Ltd (ASX:T88) has demonstrated evidence of a large magmatic-hydrothermal system with potential molybdenum and silver mineralisation at the Highway Project within the Gawler Craton of South Australia.
Meeka Metals fields high-grade gold in diamond drilling at Circle Valley
Meeka Metals Ltd (ASX:MEK) has intersected high-grade gold in a diamond drilling program at Circle Valley Project, 100 kilometres north of Esperance in Western Australia.
Terra Uranium starts 100-hole maiden Athabasca winter drilling program targeting major deposits
Terra Uranium Ltd (ASX:T92) has kicked off a 100-hole reverse circulation (RC) drilling program as part of its maiden exploration program, which targets the discovery of major uranium deposits under cover at the 100% owned Pasfield and Parker projects in Canada's prolific Athabasca Basin.
Golden Rim Resources hits 57 metres at 1.0 g/t gold in oxide at Kada, Guinea
Golden Rim Resources Ltd (ASX:GMR, OTC:GMRMF) has identified an area of shallow, broad gold zones at Bereko, some 9 kilometres north of the mineral resource estimate boundary at Massan prospect, within the Kada Gold Project in Guinea.
Recce Pharmaceuticals selects CMAX research facility for Phase 1/2 urinary tract infection clinical trial
Recce Pharmaceuticals Ltd (ASX:RCE, OTC:RECEF) has picked Adelaide’s CMAX Clinical Research as the independent trial facility to conduct its Phase 1/2 intravenous (IV) clinical trial of its lead pipeline candidate R327 in healthy male and female subjects.
On your six
Captain Dynamic – forging a path in stone: Karen Wellman
From rock climbing to geology and an early love for volcanoes and archeology, Dynamic Metals managing director Karen Wellman knows a thing or two about rocks.
The one to watch
SQX Resources raises $5 million in IPO to advance gold-copper porphyry projects
SQX Resources Ltd CEO Mark Purcell joins Proactive’s Elisha Newell to discuss the minerals exploration company’s recent $5 million initial public offering (IPO), and its projects.