The ASX is expected to bounce today after Wall Street booked back-to-back gains overnight.
“US equities ripped higher overnight, following reversals lower in crude oil, US yields and the US dollar. While it’s too early to suggest that all three problematic asset classes have topped out, initial signs are encouraging, particularly for those hoping for a rebound in equity indices,” IG Markets analyst Tony Sycamore said.
“In terms of economic data, 2Q GDP was left unrevised at 2.1% vs. 2.2% expected. Initial jobless claims edged higher to 204k, well below the 215k expected. Attention now turns to the release of the Fed's preferred measure of inflation, the Core PCE at 10.30 pm tonight, expected to fall to 3.9% in August from 4.2% in July. Keep in mind that if the US Government shuts down as soon as this weekend, it may delay the release of critical economic data, including the September CPI.”
ASX 200 futures are up 45 points, or 0.63% as of 7:45am AEST.
We’re expecting a quiet day today ahead of the AFL and NRL Grand Finals this weekend and the states’ respective celebratory public holidays.
Over the last few days, the ASX 200 has had to claw its way back from early losses, so let’s see what happens throughout the day as long lunches and grand final parades grip the cities.
Yesterday, the ASX 200 finished lower for a third consecutive session on what was a fairly uneventful day. The Index bounced between session highs of +0.32% and lows of -0.38% and is clearly struggling for direction.
The one bright spot for investors, but not for motorists, is the Energy sector, which was again a standout yesterday as oil prices tested US$95 a barrel for the first time since November 2022.
What happened overnight?
Here’s what we saw (source Commsec):
US markets
Rebounded on Thursday, led by the tech sector, while US Federal Reserve Chair Jerome Powell sidestepped investor concerns over interest rates at an event. Tech giants, including Nvidia (+1.5%), Meta Platforms (+2.1%) and Tesla (+2.4%) drove the Nasdaq index higher as bond yields steadied ahead of a key US inflation report. Intel and Cisco Systems (NASDAQ:CSCO) rose 1.7% and 1.3%, respectively, lifting the Dow Jones index. Technology services provider Trimble jumped 6.5% following an announcement that AGCO Corporation (NYSE:AGCO) will acquire an 85% stake in Trimble's agribusiness for US$2 billion.
- The Dow Jones index rose by 116 points or 0.4%.
- The S&P 500 index gained 0.6%.
- The Nasdaq index added 108 points or 0.8%.
European markets
Rose from six-month lows on Thursday after a jump in mining stocks, while German inflation rose less- than-expected in September, boosting investor sentiment. The basic resources index soared 2.2%, led by a 5% jump in Sweden- based Billerud after broker SEB raised the stock's rating to "buy." Germany's Thyssenkrupp jumped 6.5% after Handelsblatt reported that the company is in talks to sell 50% of its steel division to Czech billionaire Daniel Kretinsky. German consumer prices rose by 4.3% on the year in September after a reading of 6.4% in August (survey: 4.5%).
- The continent-wide FTSEurofirst 300 index rose by 0.4%.
- The large-cap UK FTSE 100 index edged higher by 0.1%.
Currencies
Were stronger against the US dollar in European and US trade.
- The Euro rose from US$1.0490 to US$1.0577 and was near US$1.0565 at the US close.
- The Aussie dollar lifted from US63.64 cents to US64.32 cents and was near US64.25 cents at the US close.
- The Japanese yen firmed from 149.47 yen per US dollar to JPY149.15 and was near JPY149.30 at the US close.
Commodities
Global oil prices slid by up to 2.1% on Thursday, as traders took profits after prices earlier soared to 10-month highs and some worries that high interest rates may weight on western economies and oil demand.
- The Brent crude price fell by US$1.17 or 1.2% to US$95.38 a barrel.
- The US Nymex crude price dipped US$1.97 or 2.1% to US$91.71 a barrel.
Base metal prices climbed on Thursday.
- The copper futures price rose by 2.1% as inventories in warehouses monitored by the Shanghai Futures Exchange fell by 28% from last Friday.
- The aluminium futures price lifted 1.8%.
- The gold futures price fell by US$12.30 an ounce or 0.7% to US$1,878.60 an ounce.
- Spot gold was trading near US$1,864 an ounce at the US close, near the lowest level since March.
- Iron ore futures were unchanged at US$120.84 a tonne ahead of the Golden Week holiday break in China.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) dropped 0.55% yesterday to 2,650.80.
There have been a few active small cap stocks this morning and you can read about the following and more throughout the day.
- Queensland Pacific Metals Ltd (ASX:QPM) wholly owned subsidiary, QPME, has received Federal Government approval under EPBC Act for the QPM Energy Northern Hub. All major approvals and native title requirements for the Northern Hub have now been received.
- Fenix Resources Ltd (ASX:FEX) has signed a binding agreement with Terra Mining Pty Ltd and Extension Hill Pty Ltd to transfer all of Fenix’s assets, liabilities, rights and obligations relating to the decommissioned Extension Hill hematite operation from its wholly owned subsidiary Fenix Extension Hill Pty Ltd to the Buyers.
- Lindian Resources Ltd (ASX:LIN, OTC:LINIF) has updated on activities to progress the development and commissioning of the Stage-1 mine and processing plant at the Kangankunde Rare Earth Project in Malawi.
- Nova Resources Ltd says that drill results are expected to prove up the RPM South inferred resource to the higher confidence indicated category within the RPM starter pit.
- Silver Mines Ltd (ASX:SVL, OTC:SLVMF) announced an update on exploration activities within and surrounding the Bowdens Silver Project, as well as an update on a technical review of results for drilling activities completed at the Barabolar Project.