• ASX to lift again today after a mixed session on Wall Street
  • German shoe brand Birkenstock’s debut listing was disappointing
  • Some caution needed in the quarters ahead, says expert

 

Aussie shares are poised to rise for the fifth day straight after a mixed session on Wall Street. At 8am AEST, the ASX 200 index futures was pointing up by +0.1%.

In New York, the S&P 500 rose by +0.43%, the blue chips Dow Jones index was up by +0.19%, but the tech-heavy Nasdaq fell by -0.42%.

Traders parsed through the Fed Reserve board’s minutes which suggest rates have now peaked. However the minutes also noted that rates won’t come down until policymakers are convinced inflation is heading back to 2%.

To stock news, the much anticipated IPO debut of German shoe brand Birkenstock turned out to be disappointing as the stock price slid more than 12% at the close.

Drugmakers Novo Nordisk and Eli Lilly jumped over 4% after Novo said  its diabetes and weight-loss drug, Ozempic, could delay the progression of chronic kidney disease. Eli also has a similar drug called Mounjaro.

To data, traders shrugged off hotter-than-estimated inflation reading (PPI), which rose 0.5% in September (versus survey of +0.3%). Bond yields rose modestly after the release.

More crucial data are expected tonight in the US, including the consumer price index (CPI) and jobless claims figures.

Back home, Australia’s weekly payroll jobs data will be released today, along with consumer inflation expectations.

 

Bit of caution needed in the quarters ahead – expert

 Jeff Schulze, director and head of Economic and Market Strategy at ClearBridge Investments, warned investors not to get too carried away with the recent rally.

“We worry that many investors have fully embraced the soft landing narrative, and are facing potentially the most dangerous part of this cycle’s climb with their guard down,” Schulze says.

Schulze says that as supportive macro tailwinds fade, cracks in the economy could appear.

“Consumer balance sheets continue to show increasing signs of strain, with delinquency rates for credit card, auto and other loans on the rise,” he said.

Another crack is evident in the labor market itself, says Schulze, and that while the economy continues to add jobs, every payroll release this year has been revised lower.

“This data should not set off an immediate recession alarm, but rather is a sign that the labor market may be weaker than perceived.”

He added that unusually narrow market breadth and tepid small cap performance suggest the current rally could be short lived.

“In summary, widening cracks across the economy and capital markets could short circuit the current rally. That path should become clearer in the coming quarters as we move through the crux,” he said.

 

In other markets …

Gold price spiked up +0.75% to US$1,874.20 an ounce.

Oil prices eased by -3%, with Brent crude now trading at US$85.50 a barrel.

Russia’s Vlad Putin announced that withholding oil will ‘most likely’ continue, despite Israel-Hamas war pushing crude towards US$100 a barrel.

Iron ore futures rallied by +0.8% to US$118.31 a tonne.

Base metals prices were weaker with nickel futures falling by -1.35%, and copper futures slipping by -1%.

The Aussie dollar lost all its gains the previous day as it tumbled -0.3% to US64.15c.

Bitcoin meanwhile fell almost -3% in the last 24 hours to US$26,679, its lowest level since September.

 

5 ASX small caps to watch today

Visioneering Technologies (ASX:VTI)
VTI announced positive interim 1-year data for its NaturalVue Multifocal 1 Day Contact Lens from the PROTECT multi-center, randomised, double-masked clinical trial for myopia progression control. The company says the results were observed to be consistent with those of the only treatment approved by the US FDA for myopia progression control.

Antipa Minerals (ASXX:AZY)
Antipa says assay results from the split samples at the Minyari Dome Project revealed significantly higher gold mineralisation within the original GEO-01 four-metre composite samples. Notable revised GEO-01 intersections include: 11m at 1.6g/t gold from 24m down hole, and 50m at 2.3g/t gold from 72m down hole.

First Graphene (ASX:FGR)
FGR has entered into a development and commercialisation agreement with leading UK cement manufacturer, Breedon Group. The collective objective of the agreement is to enhance Breedon Cement’s CEM II mechanical properties to improve compressive strength and reduce the company’s carbon footprint. Graphene-enhanced grinding aids and cement admixtures will be formulated and supplied by FGR, as well as developing methods for adding them into cement production facilities.

Singular Health (ASX:SHG)
Singular announced the appointment of Denning Chong as its new managing director and CEO. As a co-founder of Singular Health and previous non-executive director of the company, Chong has a strong knowledge of the medical technology landscape, the company’s operations and the support of the team and significant shareholders.

James Bay Minerals (ASX:JBY)
Recent helicopter surveys of the Aqua property have identified multiple large outcropping pegmatite dykes up to 500m in length along the project’s mid-west boundary at James Bay Minerals Aqua property. Five large outcropping dykes appear to be part of the broad pegmatite field recently discovered by FIN Resources (ASX:FIN) at its Cancet West Project.

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