• ASX follows Wall Street down 0.85% in early trade
  • ABC report rocks Steadfast, sends strata insurance broker into trading halt
  • Adacel, Macro Metals, Larvotto and Invion among the top small caps

Local markets fell at the open this morning, after the highly anticipated US Jobs data came in well under expectations on Friday night our time, which had US investors storming the exits and left Wall Street even more unsure of how much The Fed’s going to cut rates this month.

The sell off on Wall Street dragged local shares lower, with the benchmark plunging close to 1.0% when the market opened, before finding support around -0.85% as the morning wore on.

There’s a bit more to the morning, but I don’t want to get too ahead of myself, so let’s approach this in a calm, methodical manner.

 

TO MARKETS

At 8am AEST, the SPI ASX200 futures contract was pointing down by 1.3%, but the benchmark has managed to avoid the worst of that, bouncing at around -1.0% to be closer to -0.85% on the way towards lunch.

There’s not much in the way of great news to report, unfortunately. Every sector is down, every index is lower – and there’s only a handful of stocks that make up the ASX 200 that are showing a decent gain for the day so far.

 

ASX winner (ADA)
Chart via MarketIndex

 

It’s all red, all the way down, and worth noting that once again Energy shares are copping it from all sides, after oil prices fell even further since Friday. While they’ve bounced a little this morning, there’s a word doing the rounds this morning that I suspect we’re all going to have to get used to reading.

“Stagflation” – the uncomfortable situation that it looks increasingly the US is heading into, characterised by stubborn inflation, sluggish economic growth and high unemployment.

Why does that sound familiar? Oh… yeah.

While the US Fed seems convinced it has inflation under control – there’s an all-but guaranteed rate cut for the US in a couple of weeks, with the pundits arguing over how big it’ll be – the continued slide in oil prices is putting everything on an imminent knife edge.

The real risk is now a sudden spike in oil prices which would almost certainly have a serious effect on how things are travelling for the world’s major economies – and the risk of Israel and Iran going to war are ratcheting up by the day.

Things could be about to get very ugly.

Anyway – here’s what the ASX indices looked like at midday.

ASX winner (ADA)
Chart via MarketIndex

 

Sorry, I know that did absolutely nothing to lighten the mood.

The Big Bizness headlines this morning are full of news from insurance giant Steadfast, which has taken the step of suspending trade this morning after the ABC went public with allegations of a grubby kickback scheme between the company and strata managers.

Steadfast shed 6.14% before the company called a time out to deal with the reports. Stay tuned on this one… it has all the hallmarks of something else that’s going to get worse before it gets better.

 

NOT THE ASX

Today’s not going well, and it’s mostly America’s fault – so here’s what happened on Friday that sent the ASX into a retreat again this morning.

The S&P 500 was hammered d0wn 1.73% after the crucial jobs report, the blue chips Dow Jones fell by 1.01%, and the tech heavy Nasdaq crumbled by 2.55%.

There’s significant chatter that the Federal Reserve might have missed the boat on dodging a recession in the world’s top economy after the much anticipated payrolls data on Friday missed estimates by a long shot.

US non-farm payrolls climbed by 142,000 vs 160,000 forecasted for August. But the good news is, the unemployment rate ticked down to 4.2%, its first drop in five months. Here’s what the experts had to say…

“All of this does little to clear-up the debate over the September Fed meeting,” said Michael Brown at Pepperstone.

“Doves will point to a cooling pace of headline payrolls growth as potential reasoning for a larger 50bp cut,” Brown said, adding that hawks will opt for a more modest 25 basis point move.

“My base case remains for the latter, particularly given the risk the Fed runs of sparking a market panic were a larger cut to be delivered.”

Jens Foehrenbach at Man Group added: “Valuations [of stocks] are somewhat inflated and don’t incorporate a hard landing. Therefore, any negative surprise can trigger an outsized market reaction.”

In US stock news, Nvidia dropped 4%, hit hard by a broader sell-off in chip stocks.

Taiwan Semiconductor, Advanced Micro Devices, and chip-making giant ASML each slid heavily down.

Apple supplier Broadcom also fell more than 10% after a lacklustre sales forecast. Despite the company riding high on the AI boom, other parts of the business are not pulling their weight.

Apple, meanwhile, will showcase its new iPhone and Apple Intelligence AI platform when the annual iPhone event kicks off later tonight.

In Asia this morning it’s a similar story. Japan’s Nikkei is off by 1.84%, the Hang Seng is down 1.47% and Shanghai markets have fallen 0.73% so far today.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for 09 September [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Wordpress Table Plugin

 

Adacel Technologies (ASX:ADA), which is an industry leader in advanced Air Traffic Management (ATM) and Air Traffic Control (ATC) simulation and training solutions, has advised the market that a hiccup with the bid submission process with the Federal Aviation Administration has been resolved in its favour, and that the 5-year contract it announced in December, worth US$59 million, is set to go forward.

It’s a continuation of the contracts that have seen Adacel and the FAA continuing to work together for around 20 years, providing Tower Simulation system support for training air traffic controllers.

Macro Metals (ASX:M4M) was also up on Monday, after announcing that it has received formal notification that its application for exploration licence 45/6365, covering the company’s Goldsworthy East project. Macro has already filed plans for its Stage 1 drilling programme, to comprise a minimum of 30 Reverse Circulation drilled holes, spaced 50 metres apart and to an average depth of 200 metres, for a total estimated drilling distance of 6-8,000 metres.

Invion (ASX:IVX) was up nicely on Monday morning, but the only news from the company was some housekeeping notices for the ASX. Same with Larvotto Resources (ASX:LRV) – though it saw a Canadian insto emerge as a 5.3% holder after spending $6 million on shares, many possibly traded by a unit of Trafigura on market.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for 09 September [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Wordpress Table Plugin

 

ICYMI – AM EDITION

Finder Energy (ASX:FDR) has been formally acknowledged as the operator of PSC 19-11 offshore Timor Leste at a signing ceremony in the country’s capital of Dili.

The company had acquired a 76% stake in PSC 19-11 from Eni International and Inpex Offshore Timor-Leste for an upfront acquisition cost of US$2m along with an additional consideration of up to US$6.5m on reaching a final investment decision as well as 5% royalty on production.

PSC 19-11 contains four discovered but undeveloped oil fields – the Kuda Tasi and Jahal fields that have also been appraised and flow tested and host a combined gross best estimate (2C) contingent resource of 22 million barrel of oil – as well as the Krill and Jahal fields with combined 2C contingent resources of 23MMbbl oil.

FDR will now move to evaluate potential development of the discovered oil fields as well as appraisal and exploration opportunities.

It has already started the modern, high-end reprocessing of data from the Ikan 3D seismic survey along with engineering studies to evaluate innovative development solutions that could potentially reduce costs and accelerate the time to first oil.

The company has also closed its 1 for 1.26 pro-rata entitlement offer priced at 4.8c per share after receiving valid applications for more than 82.7 million shares, or a 65% take up rate, to raise $4m.

FDR will place the shortfall of 44.1 million shares to eligible institutional investors on or before December 6, 2024.

Strategic Energy Resources (ASX:SER) has completed an airborne magnetic survey for its West Koonenberry project in NSW with a geophysical data review ongoing.

The company has also secured land access and commenced surface mapping of the project, which covers 483km2 of the interpreted western rifted portion of the Koonenberry copper-nickel belt and is interpreted to be analogous to the Pechenga copper-nickel camp in Russia.

SER is targeting mafic host rocks on the western side of the Bancannia Trough equivalent to the Mount Arrowsmith Volcanic Belt on the eastern side currently being explored by S2 Resources (ASX:S2R).

The company has also secured CSIRO Kick-Start funding to map exploration targets undercover.

“These new datasets will aid in the assessment of the prospectivity of the Project and inform future exploration programs that will be essential in drill targeting into the future,” SER managing director Dr David DeTata said.

 

At Stockhead, we tell it like it is. While Finder Energy and Strategic Energy Resources are Stockhead advertisers, they did not sponsor this article.

Read MoreMarkets

Featured Companies

You might be interested in