• Aussie shares rise in arvo trade
  • Resources sectors weigh, Real Estate adds 2pc
  • GDP lowest in 40 years ex. COVID

 

The local bourse has come home with a sail wet on Wednesday with the ordinariness of our economy bringing market joy as it did on Wall Street overnight which rose because US (jobs) economic data also added ordinariness to their own economy.

Thus sparking fresh hopes of rate cuts.

The S&P/ASX200 was up 30 points or 0.39% to 7,767.10 at 3.30pm on Wednesday:

Via ASX

In the fat end of town, falling commodity prices weighed on mining stocks after GDP data revealed the economy barely moved in the first quarter as the cost of living crisis and high interest rates depressed everyone.

Iron ore and benchmark index monsters BHP (ASX:BHP) , Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG)  all back-peddled by more than a full per cent each.

The iron ore price has fallen through the US$110 pain threshold, psychological ouch point.

Via TradingEconomics

Iron ore crashed through to $110 per tonne at the start of the month having held closer to $120 all May, amid increasing expectations of low demand from China.

The latest efforts by Beijing to shore up its property market have been about de-stocking vacant housing, and there’s some shifty stuff going on – but the idea is that this will in turn stop the price collapse keeping everyone from buying homes.

Also in the news today – Treasury Wine Estates (up 6.3 per cent) recorded the strongest gains after it reaffirmed its forecasts ahead of an investor day in the United States. TWE said it expects its Californian luxury wine business, Daou Vineyards, to generate EBIT of $US24 million ($36 million) in this financial year.

On the end of the bitter pill, friend of the show, Immutep (ASX:IMM)  crashed almost 9% this morning, feeling the ill-effects of an earlier cap raise. Those losses were trimmed by close of business to circa 3%.

The biotech has however added some $100mn to the coffers at 38¢ per share, comprising an institutional offer of $89.6mn and a retail entitlement of circa $10.6mn.

IMU’s been doing pretty good all year.

Via Google

Alongside most metals spot gold has steadied after dropping 1%. While Brent crude fell 1.1% to $US77.53 a barrel.

The Resources ASX (XKR) index meanwhile has come in for some selling after starting 2024 in a strong position:

 

 

GDP

In some really terrific bad news out of the Australian Bureau of Statistics, our economy grew at its most sluggish and disinterested pace in four decades.

40 years of ups and downs and this was the worst of them save for the fun times of COVID-19.

Real GDP expanded by just 0.1 per cent in the first three months of 2024, versus 0.3 per cent in the previous quarter, dragging annual growth down to 1.1 per cent and its weakest since early 1992, Australian Bureau of Statistics figures showed.

While the economy as a whole has continued to expand, but after accounting for a rapidly swelling population, growth on a per capita basis fell by 0.4 per cent – the fifth consecutive quarterly decline.

The latest national accounts come as Reserve Bank governor Michele Bullock warned the bank “won’t hesitate” to hike rates if “inflation starts to go up again or it’s much stickier than we think”.

“If we think we’re on the narrow path (to bringing inflation under control over the coming two years without triggering a recession), we can stay pretty much where we are: not ruling anything in ruling anything out,” Ms Bullock said.

The usual gaggle of rate sensitive stocks got a kick out of the GDP blues.

The Real Estate sector has added such as consumer staples (up 1.4 per cent) and real estate investment trusts (up 1.9 per cent) advanced.

Eight out of the 11 sectors were trading higher, with energy (down 0.9%) and Materials (down 1.2 per cent) in the red after the prices of key commodities fell overnight.

 

Here’s what the the 11 ASX sectors looked like at around 3.30pm AEST.

Via ASX

 

Not the ASX

On Wall Street, stocks ended higher overnight after ordinary jobs numbers reinforced the picture of an ailing economy probs in need of some rate cutting.

All 3 US majors closed in the McGreen. The Dow Jones the strongest up about 0.35%.

American jobs vacancies for April clocked a 3-year nadir, leaving US investors pricing in a nearly 62 per cent likelihood of two rate cuts this year, up from roughly 36 per cent a week ago, according to the CME FedWatch Tool.

Investors remain focused on the crucial non-farm payrolls read, due out on Friday US time.

In commodity related news, central banks increased gold purchases to 33 metric tons in April, up from 3 tons in March, despite high prices. This reflects sustained demand amid geopolitical and economic uncertainty. Turkey, China, India, and Kazakhstan lead in gold buying this year.

In US company news, Bath & Body Works was the worst-performing stock in the S&P 500, falling 13% after the company provided softer than expected guidance.

Across the region, the good news is India’s markets are steadying after their worst session loss in  almost 4 years after Prime Minister Narendra Modi’s ruling Bharatiya Janata Party fell short of expectations at the electoral box office.

The Nifty 50 plunged 6% on Tuesday, while the BSE Sensex lost 5.75%.

The losses on Tuesday meant the Sensex erased all its circa 6% gains this year in a single day.

At 3.30pm in Sydney, the Nifty 50 was 0.6% higher and the BSE Sensex up 0.75%

Earlier, the Caixin China services read showed expansion at its best clip in almost a year.

At 3pm in Sydney the Hang Seng was ahead by 0.4% in Hong Kong, while the the Shanghai Composite shed 0.1%.

The tech heavy Shenzhen Component rose 0.2% to 9,487 in dull trade with mainland stocks struggling for love despite the better-than-expected Caixin read.

 

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

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This morning The Calmer Co (ASX:CCO), was well above 100% after news retail sales of its kava-based relaxation beverage have risen dramatically.

Surely can’t be the same flava of Kava that this intrepid reporter once had, which is good news for everyone.

CCO says it’s pulling in some $16,000 a day in e-commerce sales for the month of May, an increase of 45%.

Total sales were reported to be up 28% and will exceed $610,000 in May, against April’s total of $470,000.

Group 6 Metals (ASX:G6M) also did well on Wednesday, climbing after the company released an update on how things are going at its wholly owned Dolphin tungsten mine on King Island, Tasmania.

Group 6 says the open pit has exceeded forecast volumes for ore tonnes and metric tonne units (mtu) of WO3 recovered up until the end of April, despite the operation falling behind schedule.

RemSense Technologies (ASX:REM) has jumped after adding some ballast to the board.

As announced on Tuesday, RemSense founders, Richard Pace and John Clegg join the board as Non-Executive Directors, while Ross Taylor, has been appointed as NonExecutive Chair to lead the board.
The company said in an update, there’d been some terrific cost-cutting delivering an operating cost savings of approximately $1 million over prior years.

“In a show of confidence and commitment, Richard and John have collectively invested $300,000 into the company. This, in conjunction with the funds raised from the recent rights issue and the partial placement of the shortfall, has brought our total capital raised
to $883,526.”

And clinical stage biotech PharmAust (ASX:PAA) jumped by almost +20% this morning after sharing some exciting updates about its ongoing research into Motor Neurone Disease (MND), also called Amyotrophic Lateral Sclerosis (ALS).

PAA announced that enrollment for the Open-Label Extension (OLE) study has now been completed.

This study looks at the long-term safety, tolerability, and effectiveness of PAA’s lead drug, monepantel (MPL), for people with MND/ALS.

PAA says that new and updated data provided by Berry Consultants reveals some promising news — patients who took MPL had a 91% lower risk of death from MND/ALS compared to ‘untreated matched-controls’.

This is significant and suggests that MPL could be a really effective treatment for MND/ALS.

 

ASX SMALL CAP LAGGARDS

Today’s best performing small cap stocks:

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IN CASE YOU MISSED IT

Anson Resources’ (ASX:ASN) Ajana zinc project in Western Australia is looking more attractive than ever after extensive high-grade gallium and barium were identified from historical drilling samples.

The Calmer Co (ASX:CCO) has recorded a 28% revenue rise in May thanks to robust eCommerce sales of its kava products. Online sales surged 45% to over $16,000 daily, maintaining a 10-month growth trend.

Independent modelling has found that Challenger Gold’s (ASX:CEL) Hualilan project in Argentina has the lowest carbon intensity of any gold mine listed on the ASX, boosting its ESG credentials.

James Bay Minerals (ASX:JBY) has kicked off its 2024 summer field program with the start of fieldwork across numerous high-priority lithium-caesium-tantalum  pegmatite targets at its Joule property in Quebec, Canada.

Mamba Exploration (ASX:M24) has signed a binding terms sheet to acquire four uranium exploration projects in Canada’s high-grade Athabasca Basin. These include the Black Lake South, which contains several targets for high grade unconformity style deposits at shallow depth.

QMines (ASX:QML) recent electromagnetic survey has identified a new cluster of anomalies at the Artillery Road prospect within its Mt Chalmers copper-gold project near Rockhampton, Queensland.

Venture Minerals (ASX:VMS) continues to demonstrate the scale and consistency of its Jupiter discovery with infill drilling returning strong hits such as 8m at 5716ppm TREO and 16m at 3526ppm TREO, confirming the presence of high-grade mineralisation across the entire 40km2 target.

   

TRADING HALTS

Novonix (ASX:NVX) – reporting that no decision has been made to undertake a capital raising.

Identitii (ASX:ID8) – pending the release of an announcement in relation to a partial underwrite of its Rights Issue.

Caprice Resources (ASX:CRS) – pending an announcement regarding exercise of the option for the Bantam Niobium-REE Project.

Lincoln Minerals (ASX:LML) – pending an announcement in relation to a Top-Up placement to sophisticated and professional investors.

Top End Energy (ASX:TEE)    pending the release of an announcement regarding the grant of a key exploration permit.

 

At Stockhead, we tell it like it is. While Anson Resources, The Calmer Co, Challenger Gold, James Bay Minerals, Mamba Exploration, Qmines and Venture Minerals are Stockhead advertisers, they did not sponsor this article.