• ASX to open lower despite a mini rally on Wall Street
  • US bond yields surged higher on fears over Fed’s strategy
  • Two data points to watch this week

 

Aussie shares are poised to open lower once again this morning despite a modest rally on Wall Street overnight. At 8am AEST, the ASX 200 index futures was pointing down by -0.1%.

In New York, the S&P 500 rose by +0.40%, the blue chips Dow Jones index was up by +0.13%, and the tech-heavy Nasdaq climbed by +0.45%.

US bond yields surged much higher, with the 10-year jumping by 10bp to 4.54% and hitting multi-year highs – on fears over the Fed Reserve’s “higher for longer” interest rate strategy.

And with less than a week left to avert yet another potential US government shutdown, bond investors are fretting over the impact that would have on the economy.

To stocks,  Amazon rose +1.67% after announcing  a deal to invest up to US$4 billion in AI startup, Anthropic. Anthropic was founded by former OpenAI (the company behind ChatGPT) executives, and recently debuted its new AI chatbot named Claude 2.

“AI is not just another technology trend; it is a game-changer. Investors need to pay attention and include it as part of their mix,” said de Vere Group’s Nigel Green.

Shares in media companies Disney, Netflix, and Warner Bros were mixed after union leaders and Hollywood studios reached a tentative agreement to end the screenwriters’ strike.

Nike shares fell -0.3% after broker Jefferies downgraded the stock from Buy to a Hold.

Back home, it’s a big week on the dividend front, with billions of dollars to be paid out to shareholders from the likes of BHP, Coles, Telstra, Woodside Energy, Commonwealth Bank and many more.

 

Two important data to watch this week

On the economic front, there are two key data points for investors to watch this week, which may give some more insight into the RBA’s next move.

Monthly CPI is released on Wednesday, while retail sales are handed down on Thursday.

“Both are key data points for the Reserve Bank, and Michele Bullock will be hoping for no major surprises as she settles into her first few weeks as the new governor of the Reserve Bank,” said Josh Gilbert, market analyst at eToro.

Monthly inflation has continued to decline meaningfully since peaking in December 2022 at 8.4%, with July showing a decline to 4.9%.

However, that downtrend may stall this week with the expectation for inflation to pick back up to over 5%.

“Markets, however, still believe that inflation is moving in the right direction, pricing in just a 50% chance of another hike by the RBA by year-end,” added Gilbert.

 

In other markets …

Gold price was down -0.5% to US$1,915.96 an ounce.

Crude prices fell -0.2%, with Brent closing at US$93.24 a barrel.

Iron ore futures also fell slightly by -0.1% to US$121.18 a tonne.

Base metals prices were lower, with nickel futures losing ground by over -1%, and copper futures by -0.9%.

The Aussie dollar dropped -0.3% to US64.22c.

Bitcoin meanwhile fell -0.8% in the last 24 hours to trade at US$26,275.

 

5 ASX small caps to watch today

Olympio Metals (ASX:OLY)
Lithium grades of up to 7.43% Li2O were discovered in rock chips at the Cadillac Project. Sample results also confirm a strong relationship between elevated lithium and potassium/rubidium ratios (K/Rb<30) within the Wells-Lacourcière pegmatite.

Askari Metals (ASX:AS2)
An 864-sample soil Auger survey completed on the Callawa Project has returned results up to 1,808ppm Ni, 2,349ppm Cr and 111ppm Co. These results indicate strong nickel sulphide mineralisation potential associated with the elevated magnetic anomalism. Magnesium and chrome content and Ni:Cu ratio of the sample results indicate potential peridotite/dunite-associated nickel mineralisation, says Askari.

Calidus Resources (ASX:CAI)
A review of historical mining and exploration at Bamboo Creek has confirmed multiple brownfield prospects hosting shallow, high-grade mineralisation. The review shows that Bamboo Creek has strong potential to increase the inventory and production at Warrawoona. The historic mining centre has produced over 220,000oz of gold at 8.7g/t Au.

Lindian Resources (ASX:LIN)
Lindian has signed a contract with global metals trading company, Gerald Metals. The contract provides for the supply and sale of 45,000 tonnes of monazite concentrate from the Stage 1 development of the Kangankunde Rare Earth Project in Malawi. Gerald Metals is one of the world’s leading global commodity trading companies.

Perpetual Resources (ASX:PEC)
Perpetual has exercised the two separate options to acquire key landholdings in the spodumene rich “Lithium Valley” in Minas Gerais, Brazil. A comprehensive three-week on-site investigation is completed. Follow up meetings with Invest Minas are now planned to further progress exploration MOU.

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