• The ASX is set to open lower on Tuesday
  • Arm Holdings and Paypal slapped with downgrades
  • Is it time to get into Aussie bonds? Here’s what an expert says


Australian shares are poised to open lower again on Tuesday after Wall Street drifted sideways. At 8am AEST, the ASX 200 index futures was pointing down by -0.3 %.

In New York, the S&P 500 rose slightly by +0.07%, blue chips Dow Jones up by +0.02%, and tech heavy Nasdaq by +0.01%.

Arm Holdings was down -4.5% after Bernstein’s analyst Sara Russo gave it a sell rating, arguing that it may not be the clear-cut AI winner that everyone had been expecting.

“While expectations that Arm will be a beneficiary from AI growth may be adding a premium to the share price, we believe it is too soon to declare them an AI winner,” Russo wrote.

Another company to have been downgraded was Paypal, which dipped -2% after MoffettNathanson cut its rating to “market perform” from “outperform.”

Pharmaceutical company Moderna tumbled -9% after co-founder and board member Noubar Afeyan sold 15,000 shares for a total value of US$1.65 million.

Apple meanwhile rose +1.7% after JP Morgan and Goldman Sachs said the outlook for iPhone 15 sales is good.

Over the Atlantic, European shares fell broadly ahead of the Fed and Bank of England policy meetings later this week.

Back home, the RBA will release the minutes of its September 5 meeting today.


Is it time to buy Aussie bonds?

The Australian fixed income landscape is vastly different in 2023 to what it was just 12 months ago, with yields on fixed income assets back to being very compelling.

In his latest video update, Anthony Kirkham, head of Australian Investment Management and Operations for Western Asset, part of Franklin Templeton, says the fixed income landscape has evolved.

“2022 was an incredibly painful year for anyone investing in bonds. But it’s not surprising that we had a year like that because there were multiple programs pushing yields down to incredibly low levels,” said Kirkham.

“At the same time, a very easy monetary and fiscal policy led to a lot of money being thrown at consumers. And then suddenly inflation reared its head and all those programs disappeared.

“Today bonds have returned to fair value,” notes Kirkham.

Kirkham added that the the Australian bond market is not really that well understood.

“Investors don’t know how deep it is, but we see opportunities in the investment grade market.

“And it can provide real diversification across local companies, the banks and, big infrastructure funds within the Australian market,” he said.


In other markets …

US bond yields were mixed overnight – with the 2-year lifting by 3bp and the 10-year falling 2bp.

Gold price jumped +0.5% to US$1,933.76 an ounce.

Crude prices climbed another 1.7% on Friday, with Brent closing in at US$95 at US$94.75 a barrel.

The International Energy Agency (IEA) warned last week that the ongoing supply cuts made by Saudi and Russia would create a “significant supply shortfall”, which will make the oil market more volatile.

Base metals fell, with nickel futures sliding -0.2%, and copper futures down -0.65%.

Iron ore futures however gained +0.8% to near five-month highs of US$122.20 a tonne.

The Aussie dollar little changed at US64.36c.

Bitcoin meanwhile rallied +1.35% in the last 24 hours to US$26,837.

“Despite inflation falling in both economies, signs are there that the crypto retreat might not be fully felt yet,” said Simon Peters of eToro in a note.


5 ASX small caps to watch today

SensOre (ASX:S3N)
Sensore’s 30% owned subsidiary Exploration Venture has confirmed the presence of lithium bearing pegmatites at the recently discovered Buttamiah Prospect on the Abbotts North project leases in WA. Lithium mineralisation has been confirmed with rock chip samples, reporting encouraging assays up to 1.25% Li2O.

Raiden Resources (ASX:RDN)
High grade lithium and rubidium samples with new 50-metre wide mineralised pegmatite has been defined at Andover South. The pegmatite discovered returned grades of up to 1.81% Li2O. These pegmatites are situated within a ~3.5km x ~600m wide pegmatite swarm.

Mandrake Resources (ASX:MAN)
Permitting is well advanced for the re-entry of two wells to sample lithium brine at the 100%-owned Utah Lithium Project. The Bureau of Land Management has completed a site visit as part of the review of Mandrake’s Notice of Intent. Drilling workplan and detailed engineering planning is now complete.

Stellar Resources (ASX:SRZ)
Results from maiden exploration drill at the North Scamander Project in NE Tasmania have confirmed a significant new high-grade polymetallic discovery. Significant intercepts include: 32.0m @ 141g/t Ag, 0.34% Sn, 3.8% Zn, 2.0% Pb, 77g/t In and 19g/t Ga from 130.0m.

Prodigy Gold (ASX:PRX)
High-grade results have been returned from the initial 15 holes of the 37 hole RC drill program at Tregony. Highlight intercepts include: 3m @ 10.7g/t Au from 84m, and 6m @ 15.7g/t Au from 91m. Results for the remaining 22 holes from Tregony are expected in October or November.


At Stockhead we tell it like it is. While Raiden Resources is a Stockhead advertiser, it did not sponsor this article.