Market Highlights: Airlines stocks tumble, global microchips on notice, and 5 ASX small caps to watch
Aussie shares are poised to edge slightly higher on Monday as US traders prepared for the Martin Luther King Day long weekend holiday. At 8am AEDT, the ASX 200 index futures contract was pointing up by +0.1%.
In New York on Friday, the S&P 500 rose by +0.75%. The blue chips Dow Jones index was down by -0.31%, and the tech-heavy Nasdaq closed flattish.
Crude prices climbed by 1% more as the World Bank warned of surging energy prices and higher inflation if conflict in the Red Sea is prolonged.
US-China tensions could also escalate after Taiwanese voters backed William Lai Ching-te as its new President. Lai had previously been labelled in China as a “troublemaker”.
To stocks, earnings season is underway as US banks JPMorgan Chase, Bank of America, and Wells Fargo all posted decent results on Friday.
Airlines stocks fell across the board after Delta Airlines trimmed its 2024 guidance. Delta’s shares fell by -9% while United Airlines dropped almost -10%.
Meta rose +1.3% on no specific news as the social media platform traded at a 52-week high and near all-time highs.
In addition to the US earnings season, the week ahead will also see some key insights into growth and inflation trends for some of the world’s largest economies.
Back home, Australia’s unemployment report for December will be the main focus for investors. The unemployment rate had increased to 3.90% in November.
Taiwan’s Democratic Progressive Party’s (DPP) secured a historic third consecutive presidential victory on Saturday, defying warnings from China.
Nigel Green of deVere Group said the victory could stoke more geopolitical uncertainties in the region and in the markets.
“Taiwan plays a pivotal role in the global semiconductor industry, being home to some of the world’s leading semiconductor companies,” Green said.
“The fear among investors stemmed from the possibility that a more assertive Taiwanese leadership, under Lai, could provoke China and trigger a series of sanctions that might severely impact the global supply chain, particularly in the semiconductor sector.”
Taiwanese semiconductor manufacturers, such as TSMC (Taiwan Semiconductor Manufacturing Company), are integral to the production of advanced technology products globally.
“Any disruption in Taiwan’s semiconductor production could have a cascading effect on various industries, from electronics and automotive to telecommunications.
“Given the nature of the global economy, such disruptions could lead to a ripple effect, causing economic challenges worldwide,” Green added.
Gold price jumped by +1% to US$2,048.92 an ounce as traders sought safe haven following escalation in the Middle East.
Oil prices rose by +1%, with Brent now trading at US$78.06 a barrel.
The benchmark 10-year US Treasury yield fell by 2 basis points (bond prices higher) to 3.94%.
Iron ore futures crumbled by -3.5% to US$129.60 a tonne, as BHP and Rio Tinto prepare to publish their latest iron ore export data this week.
The Aussie dollar fell by -0.03% to US6689c.
Meanwhile, Bitcoin was down -1% in the last 24 hours to US$42,478.
Lunnon Metals (ASX:LM8)
First-time Mineral Resource at the historical Fisher mine in WA recorded 4,700 tonnes of nickel metal at 1.9% nickel. The company’s Mineral Resource now stands at 4.06 million tonnes at 2.7% nickel for 109,100 tonnes of contained nickel metal. This new MRE also means Lunnon Metals has now discovered 2.8 million tonnes at 2.5% Ni containing 70,100 tonnes of nickel metal since its June 2021 listing on the ASX.
Biome Australia (ASX:BIO)
Biome announced that its first allocation of Activated Probiotics has commenced delivery into pharmacy and health retail stores in both the United Kingdom and the Republic of Ireland. The allocation follows the recent signing of distribution agreements with UK-based CLF and Ireland-based iiHealthfoods. Biome said it will fund its expansion into European markets from existing working capital.
Calidus Resources (ASX:CAI)
All assays have now been received from the first-pass soil sampling on Pirra’s Tabba Tabba South Project. Elevated lithium and pathfinder elements have confirmed prospectivity of the area. These results have now provided the impetus for drill testing two areas of interest, with plans underway for wide-spaced RC drilling.
Argosy Minerals (ASX:AGY)
Argosy announced a significant upgrade to the JORC Code (2012) compliant Total Mineral Resource Estimate at our Rincon Lithium Project, located in Salta Province, Argentina. Upgraded Total Mineral Resource Estimate (MRE) is 686,875 tonnes of Li2CO3, with a weighted mean average lithium concentration of 329mg/L – a 2.8 times increase from previous resource estimate.
Lithium Energy (ASX:LEL)
LEL announced a significant company milestone, with battery grade lithium carbonate successfully produced from Solaroz Brine, with 99.5% Li battery grade lithium carbonate sample. LEL says the production of battery grade lithium carbonate is a highly important step in the advancement of Solaroz to production, with work conducted to date providing the key design criteria inputs for the advancement of the project.
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