The ASX is likely to endure another flat day. The ASX200 finished just 1 point (0.02%) higher yesterday at 7325, with the strongest sectors being Financial (+0.40%), IT (+0.35%) and Industrial (+0.23%). Health Care (-0.49%), Property (-0.48%) and Utilities (-0.35%) were the main drags.
Currently, ASX 200 futures are trading 6 points higher, up 0.08% as of 8:20 am AEST.
Over the last few weeks, the ASX 200 has tested and bounced off the 7000 round number, and tested but rejected the 7400 level.
Yesterday’s rejection could see lead to further selling, especially if we see a down day on the ASX today.
In the US, the Dow enjoyed a ninth straight session of gains as the rotation into value and out of growth stocks accelerated. This was supported by strong labour force data, which indicates the economy remains resilient.
IG markets Tony Sycamore said, “In yesterday's Traders View, we noted the recent revival in US banking stocks post their better-than-expected earnings reports. Overnight it was Johnson and Johnson's turn to power the value-laden Dow Jones higher as J&J’s stock price soared 6.07% to $168.38 following an upbeat earnings report.
“Meanwhile, in the tech sector, a classic 'buy the rumour, sell the fact' type reaction played out for Tesla and Netflix, which fell 9.74% and 8.41%, respectively, following their earnings reports. Fellow tech giants Microsoft, Apple, Meta and Amazon will need to shoot the lights out in their earnings reports next week to avoid a similar fate.”
What happened in the market?
Here’s what we saw (source Commsec):
US sharemarkets
Were mixed on Thursday. Seven of the 11 sectors rose. The Dow Jones index extended its winning streak to nine straight days of gains - the longest winning streak since September 2017. But technology stocks fell.
Of the S&P 500 companies that have reported earnings so far, 74% have beaten market expectations according to Factset.
The Dow Jones rose by 164 points or 0.5%. But the S&P 500 index lost 0.7% and the Nasdaq index fell by 295 points or 2.1%.
European sharemarkets
Advanced on Thursday. But while miners (+1.6%), banks (+0.6%) and healthcare (+1.6%) rose, the technology sector slumped, down 2.5%.
Positive corporate earnings lifted sentiment as well as data showing a slowdown in UK inflation. But shares in Electrolux slumped 20.3% after Europe's biggest home appliance maker recorded a quarterly loss.
The continent-wide FTSEurofirst 300 index lifted by 0.5%. In London, the UK FTSE 100 index rose by 0.8%.
Currencies
Currencies were weaker against the US dollar in European and US trade.
- The Euro fell from near US$1.1220 to US$1.1116 and was near US$1.1125 at the US close.
- The Aussie dollar fell from US68.46 cents to US67.70 cents and was near US67.80 cents at the US close.
- The Japanese yen eased from 139.32 yen per US dollar to near JPY140.50 and was near JPY140.05 at the US close.
Commodities
Global oil prices lifted modestly on Thursday. Reuters noted lower
- US crude inventories, strong crude imports from China and a weaker demand outlook as factors influencing prices.
- The Brent crude price rose by US18 cents or 0.2% to US$79.64 a barrel.
- The US Nymex crude price rose by US28 cents or 0.4% to US$75.63 a barrel.
Base metal prices rose on Thursday.
- The copper futures price rose by 0.5%. And the aluminium futures price lifted by 0.3%.
- The gold futures price fell by US$9.90 cents or 0.5% to US$1,980.80 an ounce.
- Spot gold was trading near US$1,970 an ounce at the US close.
- Iron ore futures rose by US35 cents or 0.3% to US$112.43 a tonne.
What about small caps?
The S&P ASX Small Ordinaries lost 0.18% yesterday to finish at 2,894.00.
There’s been little activity this morning, but a few stocks to watch in the small cap sector today will be:
- Buru Energy Ltd (ASX:BRU, OTC:BRNGF), which has executed a contract with Terrex Pty Ltd to undertake a 3D seismic survey principally within exploration permit EP 428 which contains the company’s 100% owned and operated Rafael conventional gas and condensate discovery.
- QMines Ltd (ASX:QML) has executed an access and compensation agreement with the landowner of the Artillery Road Electromagnetic (EM) anomalies at its flagship Mt Chalmers copper and gold Project, located 17km north-east of Rockhampton, Queensland.
- Incannex Healthcare Ltd (ASX:IHL, NASDAQ:IXHL) has successfully submitted an Investigational New Drug (IND) application to the US Food and Drug Administration (FDA) for IHL-42X for treatment of obstructive sleep apnoea.
You can read more about these developments on Proactive throughout the day.