Expect sell-off, volatility around the US election, says expert. Picture via Getty Images
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The ASX is set to open higher when the market resumes on Monday, as the US election and key central bank meetings shape the outlook for markets this week.
At 8am AEST, the S&P/ASX 200 was pointing up by 0.4%.
The Federal Reserve, the RBA and Bank of England will convene at various times this week, with expectations for rate cuts from all but the RBA.
In the US, all major indices closed higher on Friday. The S&P 500 was up 0.51%, the blue chips Dow Jones climbed by 0.69%, and the tech-heavy Nasdaq lifted by 0.8%.
Markets brushed disappointing jobs report, which showed the US economy added only 12,000 jobs in October, falling well short of expectations. This report is the final key economic indicator ahead of the Fed’s policy decision on November 7.
Amazon shares surged over 6% following a strong earnings report that exceeded expectations for both revenue and profit, along with a positive outlook for the upcoming quarter.
Investors were encouraged by CEO Andy Jassy’s optimistic comments about the company’s AI projects, which have already brought in billions for AWS, Amazon’s cloud division.
Intel jumped almost 8% after the tech giant reported Q3 that surpassed revenue expectations. The stock also rose thanks to a strong Q4 guidance.
Trump Media & Technology dropped over 13% on Friday, ending a volatile week with a total decline of about 20%, as trading remains uncertain ahead of the presidential election. Some predict it could fall to $0 if Trump loses.
“It’s a binary bet on the election,” Matthew Tuttle at Tuttle Capital told Yahoo Finance.
Super Micro Computer fell 10.5% and 40% for the week, which has netted short sellers US$2 billion. The plunge followed a Wednesday filing revealing that accounting firm Ernst & Young had resigned, citing unwillingness to associate with the company’s financial statements.
E&Y’s resignation piled on more trouble for Super Micro, especially after an earlier Hindenburg Research report that flagged accounting issues.
Equity markets could see more sell-off this week based on two major uncertainties: the US election and the Fed Reserve’s decision on interest rates, says moomoo Australia’s Jessica Amir.
“We’ve been speaking about the big warning signs for markets to pull back for some time,” said Amir.
“It’s almost as if markets have been driving down a metaphorical freeway with signs coming toward us, saying ‘steep descent ahead.’”
Then, suddenly, the market’s fear gauge, the VIX, surged last week, rising 17% in three days as options traders bet on potential further declines.
“The last time the VIX rose this fast was in August, before markets fell 10% and then recovered.”
Amir also noted that it’s important to understand “the market is forward-looking”.
Despite stronger-than-expected profits from big tech companies like Apple, Meta, and Microsoft – along with others in the S&P 500 – these companies have all projected lower revenue growth ahead.
However, it’s not all doom and gloom.
“The Fed’s preferred inflation gauge fell in line with monthly expectations, suggesting the Fed can probably cut rates by 0.25% this week,” she said.
Additionally, copper and gold prices have moved higher with the weaker US dollar, which is great for ASX’s mining stocks.
“All in all, remember that stocks could face pressure until we know who will win the election, but expect a little dip buying.”
All prices at 8.30am AEST.
Gold price retreated by 0.3% to US$2,736.50 an ounce.
Oil prices climbed by around 0.3%, with Brent crude now trading at US$73.02 a barrel.
The benchmark 10-year US Treasury yield surged higher by 10 basis points (bond prices lower) to 4.39%.
The Aussie dollar rose by 0.5% to US66.13 cents.
Bitcoin fell by 0.55% in the last 24 hours to US$69,163, while Ethereum slipped by 1% to US$2,469.
Meanwhile, iron ore traded lower by 1% to $US102.75 a tonne.
Hexagon Energy Materials- HXG (ASX:)
Hexagon has secured a non-binding agreement with Chevron Australia for gas supply to its WAH2 Clean Ammonia Project. This deal aims for a formal gas sales agreement by September 2025, supporting Hexagon’s investment decision planned for late 2025. The agreement includes a supply of 33 terajoules per day, covering 60% of Phase 1 needs, with an initial term of 10 years and a potential five-year extension. Hexagon also intends to establish additional agreements for gas supply and CO2 sequestration in the coming months, progressing towards the project’s engineering phase by late 2024.
Ordell Minerals (ASX:ORD)
Ordell has reported encouraging results from its recent drilling at the Barimaia Gold Project in WA. The second phase of shallow reverse circulation drilling confirmed significant gold mineralisation at McNabs East, with one intersection showing 29 metres at 2.52g/t Au, including a high of 47.5g/t Au. The defined gold zone extends over 1,000 metres and remains open for further exploration, with diamond drilling planned for November to gather additional data.
Macro Metals (ASX:M4M)
Macro has provided an update on its Wandanya Manganese Project, revealing the extent of surface manganese mineralisation through detailed geological mapping and rock chip sampling. The mapping has identified priority drill targets at the Crossroads and Wandanya prospects, with past samples showing grades of up to 55.2% and 64.96% manganese, respectively. The company plans to conduct 50m x 50m spaced RC drilling at Crossroads. Also, Macro said it wants to expedite applications for a bulk sample at Wandanya and a mining lease for the Donkey and Crossroads prospects.
Allup Silica (ASX:APS)
Allup Silica announced promising results from its Pink Bark Project in southern WA, highlighting its potential for rare earth elements (REE), uranium, graphite, and kaolin. Recent analysis of samples from its November 2023 drilling program revealed significant uranium results of up to 232ppm U3O8 and total rare earth oxide (TREO) grades as high as 1,985ppm in fresh bedrock. The project also shows kaolin quality comparable to existing Australian deposits, along with graphite-rich bedrock discovered in one drilling hole. The exploration area, located in the Albany Fraser Province, has been identified as having significant mineralisation potential.
Enlitic (ASX:ENL)
Enlitic has signed a three-year global distribution agreement with Darwinist, a clinical AI model distributor. Under this agreement, Enlitic’s Ensight 2.0 modules will be integrated into Darwinist’s Beagle platform, which streamlines AI tool integration in healthcare. Once onboarding is complete, Enlitic will be listed as a Supported Vendor and has the potential to become a Recommended Vendor, increasing revenue opportunities. The contract is expected to generate initial shared revenues of up to US$100k per year, with plans for further expansion to clinical trial sites.
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