Australian shares are expected to open lower, parting ways with Wall Street, which enjoyed a modest rally that propelled the S&P 500 to a new high.
ASX futures indicate a slight decline, down 1 point to 7,443 this morning. The Australian dollar is weaker, dropping 0.4% to US65.72.
Wall Street enjoyed modest gains overnight, driven by technology stocks, and the S&P 500 reached a new record, closing up 0.2%, while the Nasdaq increased by 0.3%.
Notable movements included Apple's 1.2% increase and Western Digital's 4.1% jump following a favourable analyst report from Morgan Stanley (NYSE:MS).
Commodities mixed
In contrast, commodities presented a mixed picture, with oil surpassing the US$80 per barrel mark, while iron ore and gold prices fell. Rio Tinto's US-listed shares declined by more than 2% and BHP's shares dropped 0.7% in New York trading.
Market analysts are closely monitoring US equities with Ed Yardeni highlighting the potential onset of an "exuberant melt-up phase", alongside rising risks.
The S&P 500 has surged more than 17.5% since its October low, with the Nasdaq 100 seeing over a 22% increase in the same period.
Yardeni raised concerns about Federal Reserve chairman Jerome Powell potentially fueling "irrational exuberance" and warned against the Fed's next possible error of inflating a speculative stock market bubble.
Corporate earnings remain a key focus, with companies like Netflix, Tesla and Intel scheduled to report this week.
European markets also experienced a boost, with technology stocks leading gains. ASML Holdings saw a 3.1% rise after an upgrade from Bernstein and Barclays gained 2.8% following Morgan Stanley's optimistic view. That said, basic resources stocks experienced a 0.9% decline amid falling industrial metal prices.
US government bond yields decreased as investors capitalised on recent dips in bond prices. The US 10-year Treasury yield fell by 4 points to 4.11%, and the two-year yield declined by 1 point to 4.39%.
In commodities, global oil prices rose around 2%, driven by supply concerns and bullish US stock market signals. Brent crude increased by 1.9% to US$80.06 a barrel while US Nymex crude rose 2.4% to $75.19 a barrel. However, copper futures fell by 0.6% amid concerns over demand in China.
Gold futures dipped slightly, losing 0.3% to US$2,022.20 an ounce, with spot gold near US$2,020 at the US close. Iron ore futures decreased by 0.3% to US$135.42 a tonne, with investor focus on China's steel-intensive property sector.
Economic data ahead
Looking ahead, key economic data and corporate earnings are anticipated. In Australia, business and consumer confidence surveys are due, alongside production updates from Cooper Energy, Coronado Global Resources, and Stanmore Resources.
Internationally, the Bank of Japan's monetary policy decision and a host of US earnings reports, including from 3M, Baker Hughes and Johnson & Johnson (NYSE:JNJ), are anticipated.
Cobre Limited (Cobre Ltd (ASX:CBE)) is pleased to advise that, following a rigorous and thorough selection process, it has been selected to participate in the 2024 BHP Xplor Program, which will assist in its advancement of exploration plans on its Kalahari Copper Belt projects, Botswana.
What’s happening in small caps?
The S&P/ASX Small Ordinaries closed at 2,873.30 yesterday, up 0.33% on the previous day.
Making news this morning, which you can read more about throughout the day with Proactive:
- Auric Mining Ltd (ASX:AWJ) has announced Stage Two of mining the Jeffreys Find Gold Mine near Norseman, WA, will recommence in March 2024.
- Sovereign Metals Limited (ASX:SVM, OTC:SVMLF, AIM:SVML) has appointed SocialEssence Pty Ltd to assist in the development of its stakeholder relations, social performance objectives and Community and Social Responsibility (CSR) framework.
- Maximus Resources Ltd (ASX:MXR, OTC:MXRRF) says Steve Zaninovich has advised of his decision to resign as a non-executive chair and director of the company to rationalise his work commitments in Australia and overseas.
- Orion Minerals Ltd (ASX:ORN, JSE:ORN) has reached an agreement to access and acquire the surface ownership rights of properties owned by Mora Plase Proprietary Limited.
- Galileo Mining Ltd (ASX:GAL, OTC:GLMGF) has delivered an exploration update for the company’s 100%-owned Norseman project in Western Australia.
- Cobre Ltd (ASX:CBE) (Cobre Ltd (ASX:CBE)) advises that, following a rigorous and thorough selection process, it has been selected to participate in the 2024 BHP Xplor Program, which will assist in its advancement of exploration plans on its Kalahari Copper Belt projects in Botswana.