It could be a quiet start for the local market today. ASX 200 futures are trading just two points higher, up 0.02% as of 8:20 am AEST.
The ASX200 finished 40 points (0.55%) higher yesterday at 7,323 led by Energy (+1.70%), Financials (1.49%) and Real Estate (+0.98%). On the flipside, the Materials (-0.56%) and Communications (-0.51%) sectors were the weakest.
IG Market analyst Tony Sycamore said, “Expectations that the Fed is approaching the end of its hiking cycle, better-than-expected US bank earnings and buying ahead of dividend season have propelled the ASX200 Financial ~6.5% higher over the past seven sessions, to its highest close yesterday in almost five months.”
The Australian labour force report for June is due at 11.30 am AEST, so we’ll see how the market reacts to that. The market is looking for a 15,000 rise in jobs and the unemployment rate to remain stable at 3.6%.
In the US, the Dow advanced for an eighth straight session, while the Nasdaq began to fatigue.
The big news Stateside came from Netflix and Tesla.
Netflix took a dive on a mixed second-quarter result, while Tesla posted a record quarter for revenue and vehicle production. Tesla exceeded Wall Street’s expectations, with its 2023 goal of making about 1.8 million vehicles this year intact.
However, the stock was lower as results didn’t quite match expectations of a blowout quarter.
Tesla earned $2.7 billion, or 78 cents a share, in the quarter, compared with $2.3 billion, or 65 cents a share, in last year’s period.
“The truth is that the bar had been set pretty high heading into this release given Tesla’s meteoric run-up so far in 2023,” CFRA analyst Garrett Nelson told MarketWatch.
He said, “This was sort of an uneventful release with no change to prior 2023 volume guidance.”
In a letter to shareholders, Tesla executives noted it is focusing on “cost reduction, new product development that will enable future growth, investments in R&D, better vehicle financing options, continuous product improvement and generation of free cash flow.
“The challenges of these uncertain times are not over, but we believe we have the right ingredients for the long-term success of the business through a variety of high-potential projects,” the letter said.
Tesla shares have more than doubled this year.
What happened in the markets
Here’s what we saw (source Commsec):
US sharemarkets
Rose on Wednesday as investors looked ahead to technology earnings due at the close trade.
Shares of Goldman Sachs (NYSE:GS) rose by 1% after reporting a 3-year low in profit but CEO David Solomon made positive comments about signs of a recovery in investment banking.
Citizens Financial shares jumped 6.4% after it beat Wall Street estimates for second-quarter profit. US Bancorp shares added 6.5% as the lender posted a 28% jump in quarterly net interest income.
Apple shares gained 0.7% after a Bloomberg report on its efforts to build AI tools. But Microsoft shares dipped 1.2%.
AT&T shares lifted 8.5% after the telecom company said it did not intend to immediately remove lead cables from Lake Tahoe pending further analysis. Halliburton shares shed 2.9% after posting disappointing quarterly revenue.
The Dow Jones index rose by 109 points or 0.3%, notching its longest daily winning streak since September 2019. The S&P 500 index gained 0.2% and the Nasdaq index added 4 points or less than 0.1%.
European and UK sharemarkets
Gained on Wednesday as British inflation fell below 8% for the first time in more than a year, boosting sentiment. The UK consumer price index was 7.9% higher than a year ago in June, a sharp drop from the 8.7% reading in May (survey: 8.2%).
The UK FTSE 100 index rose by 1.8% with shares of homebuilders up by 7% on hopes of peaking UK interest rates. The continent-wide FTSEurofirst 300 index edged higher by 0.1%, with real estate stocks up 4.3%, while basic resources shares declined by 1.1%.
Currencies
Were weaker against the US dollar in European and US trade.
The Euro fell from US$1.1238 to US$1.1174 and was near US$1.1200 at the US close.
The Aussie dollar dipped from US67.95 cents to US67.50 cents and was near US67.70 cents at the US close.
The Japanese yen eased from 139.21 yen per US dollar to JPY139.98 and was near JPY139.70 at the US close.
Commodities
Global oil prices dipped on Wednesday, as investors took profits following earlier gains on tighter US crude supplies and China's pledge to reinvigorate its economic growth. US crude inventories fell by 708,000 barrels last week to 457.4 million barrels, compared with analysts' expectations for a drop of 2.4 million barrels.
- The Brent crude price fell by US17 cents or 0.2% to US$79.46 a barrel.
- The US Nymex crude price shed US40 cents or 0.5% to US$75.35 a barrel.
Base metal prices fell on Wednesday, weighed down by investor worries about a lack of major stimulus and weak demand in China.
- The copper futures price fell by 0.4%.
- The aluminium futures price dipped by 1.2%.
- The gold futures price settled unchanged at US$1,980.80 an ounce. Spot gold was trading near US$1,976 an ounce at the US close.
- Iron ore futures fell by US9 cents or 0.1% to US$112.08 a tonne after Rio Tinto said second-quarter iron ore shipments fell due to weak Chinese demand.
The small cap track
The local small cap market finished on a positive note yesterday. The S&P ASX Small Ordinaries (XSO) finished 0.85% higher to 2,899.20.
While it’s been quiet this morning, there has been some activity.
- Tempest Minerals Ltd (ASX:TEM) will acquire the Five Wheels Base Metals Project, comprising Exploration Licence 69/3884. It is an underexplored base metal exploration project in the Earaheedy Basin.
- Stellar Resources Ltd (ASX:SRZ) has reported assay results for drill holes ZS159, ZS160 and ZS161 from the recently completed Phase 2B drilling program. The program is focused on growing the indicated mineral resource at Severn, the largest deposit in the company’s flagship Heemskirk Tin Project.
- Astral Resources NL (ASX:AAR) has completed an updated JORC 2012 mineral resource estimate (MRE) of 37 million tonnes at 1.1 g/t gold for 1.27 million ounces of contained gold at the Mandilla Gold Project, 70 kilometres south of Kalgoorlie in WA. The updated MRE represents a 22% increase in contained metal on the previous MRE.