- The ASX 200 index set to open 1% higher on Thursday
- Wall Street charged higher overnight on a softer US CPI read
- Oil prices find 1%
Local shares are set to open higher today. At 8am AEST, the ASX 200 August futures contract is pointing up by 1%.
Overnight, Wall Street rallied as cooling inflation surprised the market and eased rate hikes fears.
The US annual CPI rate for July came in at 8.5%, lower than market predictions of 8.7%. In June, that headline rate was 9.1%.
There’s a sense of relief now that inflation might have peaked in the US, leaving some to predict the US Fed might ease its rate hikes after back-to-back 75bp increases in the last two months.
Nigel Green, CEO of financial markets advisor deVere Group warned however that investors should not feel too complacent about this development.
“Some of the drivers of the 40-year high inflation rate we’ve been seeing are subsiding. Commodity prices are coming down; and supply chain issues are decreasing – but we still have rising wages, and this will continue to drive core inflation,” Green said.
“It is still too early to say we’re out of the woods with inflation, and the impact it could have on the Fed’s decision-making.
“Investors’ response should be to avoid complacency, and a ‘buy everything’ mindset and stick to basic investment fundamentals.”
Meanwhile in Deutschland…..
All three major US indices rose – the S&P 500 by 2.13%, the Dow by 1.63%, and tech heavy Nasdaq by 2.89%.
Tesla gained almost 4% despite news that Elon Musk had sold 7.9 million (or US$7bn) more Tesla shares between Friday and Tuesday, leaving him with a 15% stake in the company.
Most Big Tech stocks also climbed higher, Meta was up 6%, while Apple, Alphabet and Amazon all rose 2-3%.
In other markets, global oil prices were up 1% overnight following the release of encouraging data on US inventories. According to the release, US crude inventories increased by 5.5 million bbl from the previous week.
At 432 million bbl, these inventories are about 5% below the 5-year average for this time of year – giving hope that gasoline demand at the pump might be rebounding.
Bitcoin also bounced back strongly in the last 24 hours, up by 3.5% to trade at US$23,938.
Looking ahead today, the ABS will release its weekly payroll jobs and wages data, and later tonight US initial job losses are due out (all sources: Commsec).
5 ASX small caps to watch today
Viva Leisure (ASX:VVA)
The lifestyle services company says its H2 revenue will exceed previous guidance of $54-56 million. Viva’s H2 margin is also tracking toward the upper end of the previous guidance of between 15-17%. The company also reported a record monthly Revenue Run Rate (MRRR) of $10.2 million in June, up 7.4% on pcp.
Catalyst Metals (ASX:CYL)
Drilling at the shallow Cradle Zone at the Henty Gold Mine in Tasmania has revealed numerous high-grade intersections in shallow zone. Results include: 4.6m@56.7g/tAu,220g/tAg, and 2.1m@28.5g/tAu,113.9g/tAg.
Empire Energy (ASX:EEG)
Ongoing flow testing of the Capenteria-2H well in Empire’s 100% owned EP187 tenement located in the Northern Territory’s Beetaloo Sub-basin has generated strong initial gas flow rates. Flow rate was achieved from 927m effective stimulated horizontal length, indicating a normalised rate of 2.8 mmscf per day per 1,000m of horizontal section.
Chrysos Corp (ASX:C79)
The mining services company has increased its Total Contract Value to $705m with 10 new PhotonAssay lease agreements. These 10 new agreements have been signed with existing Chrysos customer Britannia Mining Solutions, and are in addition to the two previously-announced leases with the same company.
Medallion Metals (ASX:MM8)
Medallion has secured reverse circulation and diamond drill rigs for the recommencement of drilling at the 1.37Moz AuEq Ravensthorpe Gold Project. Drilling is scheduled to restart in the first week of September. Assays are pending for approximately 8,000 metres of completed drilling, and will be reported in the coming weeks.
At Stockhead we tell it like it is. While Medallion Metals is a Stockhead advertiser, it did not sponsor this article.