• The ASX is set to open lower on Thursday following a modest selloff on Wall Street
  • Franklin Templeton says “don’t sell”
  • Energy stocks on watch as crude oil prices rose almost 1% overnight


Aussie shares are set to open lower on Thursday as US stocks mostly fell after the July 4 holiday. At 8am AEST, the ASX 200 index futures was pointing down by -0.50%.

Overnight, both the S&P 500 and Nasdaq closed -0.2% lower following the release of the June Fed Reserve meeting minutes. The minutes indicated that FOMC members wanted to hike the Fed Funds rate in June before deciding to keep it at 5%-5.25%.

Analysts believe the upcoming CPI report on July 12 will determine whether or not the Fed will hike in July.

To stock news, US chip stocks mainly fell after China said it will curb some metal exports used in producing semiconductors.

Meta Platforms rose 3% ahead of the release of its Twitter-rival app, Threads, later today (US time). Dubbed the “Twitter killer”, Threads is described as “Instagram’s text-based conversation app.”

Moderna meanwhile rose 1.5% after signing an agreement to conduct research, develop and manufacture mRNA medicines in China.


Franklin Templeton says ‘don’t sell’

As investors look towards the second half of 2023, Franklin Templeton’s chief market strategist Stephen Dover believes that equities and bonds should benefit from a taming of inflation and earnings optimism.

After a miserable 2022, the classic 60%–40% mix of US stocks and bonds etched a 6% gain in the first six months of 2023.

“Does that portend a weak second half? Will the familiar adage, “sell in May and go away” prove prescient for the final two quarters of 2023?”, Dover said.

“We don’t think so, and we don’t subscribe to selling in May — or June or July for that matter.”

“Nor do we think returns will be soggy; that is a risk, but not our base case.

“Rather, we believe the second half of 2023 offers opportunities for investors to get cash off the sidelines. There will be challenges, and a vertical bull market is hardly our view.

“But the opportunities on offer — near and longer term — point to a simple conclusion. It is time to engage more fully,” says Dover.


In other markets …

Crude oil prices rose almost 1% overnight, with WTI trading at US$71.85 a barrel.

The move came after fresh comments from the Saudi Energy Minister at the OPEC Seminar in Vienna, who said that markets will “not be left unattended”. This comes just a day after he announced the extension to production cuts for an extra month.

Gold prices meanwhile continue to flirt with a resistance of around US$1,930 an ounce, trading at US$1,917.36.

Bitcoin dropped 1% in the last 24 hours to US$30,468.

Binance CEO, CZ, was asked whether BlackRock’s move to set up a Bitcoin exchange-traded fund (ETF) poses a challenge for Binance.

“Short answer is no,” he replied. “It would be hugely beneficial to crypto for large entities to come into the space, noting that they serve a clientele that is currently being underserved by the industry.”


5 ASX small caps to watch today

Lucapa Diamond Company (ASX:LOM)
Lucapa has announced the recovery of a 180 carat white Type IIa diamond from the Lulo Alluvial Mine in Angola. The diamond, which weighs 180.87 (pre-acid), is classified by the Yehuda meter as Type IIa and is the 37th +100 carat diamond to be recovered from the Lulo Alluvial Mine. The diamond is the second +100 carat diamond recovered from Lulo this year, following a 150 carat white Type IIa diamond which was recovered in February.

Calidus Resources (ASX:CAI)
Calidus reported record quarterly production at Warrawoona of 16,177 ounces. The strong result means Calidus has met its guidance for the six months to 30 June of 31,000 – 36,000oz by producing 31,364oz. The record production is particularly pleasing given the impact of Tropical Cyclone Ilsa during the quarter.

Cirrus Networks (ASX:CNW)
Cirrus announced record revenues for FY23. The company says it expects to deliver consolidated FY23 revenue (unaudited) of $112m, a record for the company and an increase of 8% on the prior year. This record result reflects the continued strong momentum in Cirrus’ business and its client base which includes Government (federal, state and local) and Tier-1 major Australian Resources companies. Gross margins also improved year on year to 14.3% of revenue, and gross profit was $16m, 14% higher than FY22.

Incannex Healthcare (ASAX:IHL)
Incannex has received approval from Bellberry Human Research Ethics Committee to commence the bioavailability/bioequivalence (‘BA/BE’) clinical trial to assess the pharmacokinetics and tolerability of IHL-42X. The design of the BA/BE trial is consistent with FDA recommendations as part of the required research required to undertake a new drug application.

Vista Group (ASX:VGL)
The film industry software company announced that it has commenced an organisational transformation to support its vision and strategy, and deliver improved financial performance. The transformation will bring together Vista Group’s business brands under a unified business model, supported by a global senior leadership team. The re-profiling of its capital expenditure will make Vista Group free cashflow positive during Q4 2024 – a year earlier than previous guidance.


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