ASX eyes record highs as Wall Street hits new peaks. Pic: Getty Images
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The ASX is set to flirt with record highs again on Tuesday following a solid session on Wall Street overnight. At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.6%.
The ASX closed yesterday at 8122 points, its highest ever closing level.
Overnight, both the Dow and S&P 500 also hit new record highs as traders wait for this week’s Federal Reserve rates decision.
The S&P 500 closed 0.13% higher, the Dow Jones was up by 0.55%, but the tech heavy Nasdaq slipped by 0.52%.
Tech stocks came under pressure mostly on the back of Apple’s 3% decline, as early figures indicate that demand for the new iPhone 16 is falling short of last year’s models.
Although the iPhone 16 features new AI tech and the well-publicised iOS 18, delays in these features, combined with strong competition and consumer fatigue, appear to be dampening initial excitement.
Intel’s 6% surge, however, helped the Dow Jones index hit a record high.
Intel rallied after scoring a US$3 billion grant from the Biden Administration for chip production, and on news that the company was extending it partnership with Amazon’s AWS to produce an AI chip. Intel shares jumped another 8% after hours.
Microsoft shares stayed flattish as the company revealed it was ramping up its AI-powered Copilot tech in Microsoft 365 apps including Excel, PowerPoint, Outlook, and Teams.
Trump Media & Technology slipped by 4% after news broke of a second assassination attempt on the former president yesterday.
Meanwhile, markets are ready for a 50 basis point rate cut from the Fed tomorrow night (US time), with a 59% chance now priced in (from 49% yesterday).
While there’s talk about whether the Fed might go with a 25 or 50 basis point cut, a bigger cut is now expected.
“I think the Fed would be reluctant to surprise the market,” Matthew Luzzetti at Deutsche Bank told Yahoo.
Experts are also generally bullish on the outlook for equities ahead of the US Fed Reserve’s first interest rate cut in over four years.
“We remain positive on equities,” said John Stoltzfus at Oppenheimer. “Pullbacks experienced thus far this year have mostly looked like ‘trims’ and ‘haircuts’ for the S&P 500.”
The 60/40 investment strategy, which mixes 60% stocks and 40% bonds, is back in a big way in 2024, hitting a record high last week according Bloomberg’s global 60/40 index.
This classic strategy is proving its worth with strong returns, especially in bonds, which are up over 10% in the past year.
But against that backdrop, Pimco’s Dan Ivascyn suggests rethinking the 60/40 rule.
He believes it might be smart to flip the allocation, favouring 40% stocks and 60% bonds, since bonds have become more attractive ahead of the Fed’s cutting cycle.
Ivascyn even thinks a case can be made for a 35% stocks / 65% bonds split.
“We’re not guaranteeing that bonds will outperform equities,” Ivascyn says. “We’re saying bonds represent a great absolute and relative value proposition.”
Gold price rose modestly by 0.15% to US$2,582.81 an ounce. Earlier in the day, the bullion price reached a fresh record high of US$2,589.50.
Oil prices jumped by around 2%, with Brent crude now trading at US$72.97 a barrel.
After Hurricane Francine hit Louisiana last week, around 20% of oil production and 28% of natural gas production in the Gulf of Mexico are still offline.
The benchmark 10-year US Treasury yield was 3 basis points lower (bond prices higher) to 3.62%.
Treasury yields fell to their lowest closing levels in two years as market expectations shifted towards a 50-basis-point cut by the Fed this week.
The Aussie dollar rose by 0.70% to US67.52 cents.
Bitcoin was down 2% in the last 24 hours to US$57,904, and Ethereum also fell by 3% to US$2,284.
Meanwhile, iron ore slipped by 1% to $US91.75 a tonne after Goldman Sachs cut its iron ore price forecast for the December quarter by 15%, down to US$85 per tonne from US$100.
Chalice Mining (ASX:CHN)
The Western Australian Government has given Chalice’s Gonneville project Strategic Project status. This means Gonneville will receive additional support and streamlined approvals, making it easier to move forward. Located 70km northeast of Perth, the Gonneville project aims to produce key minerals including nickel, copper, and cobalt. This designation highlights the project’s importance for the state’s economic growth and energy transition goals.
West Cobar Metals (ASX:WC1)
WC1’s Bulla Park project is showing promising signs for copper and antimony mining. New surveys suggest the mineral deposit could stretch over 1.8km and be about 350m wide with significant thickness. With strong market prices for both metals, this project has great potential, says the company. Assay results for recent drilling are expected soon, and there’s also potential for silver, zinc, and lead in the area.
Lincoln Minerals (ASX:LML)
Lincoln has updated progress from its recent sampling at the Eridani uranium project on South Australia’s Eyre Peninsula. This sampling was part of a broader review of the company’s uranium prospects that began earlier this year. The focus was on the Minbrie West quarry, an abandoned site known for historical carnotite uranium mineralisation. Lincoln collected 12 rock samples from the quarry, and initial tests confirmed the presence of carnotite, a key uranium mineral. Detailed results from X-ray fluorescence (XRF) analyses of these samples are expected to be released in October.
Antipa Minerals (ASX:AZY)
Antipa has announced a significant upgrade to the Minyari Dome Gold-Copper Project’s resource estimate. The new figures reveal a 33% increase in gold resources, now totalling 2.3 million ounces, along with 83,500 tonnes of copper, 661,000 ounces of silver, and 13,000 tonnes of cobalt. This increase in resources enhances the project’s potential, given its strategic location near major mines and processing facilities. With additional funding from a recent sale, Antipa says it is well-positioned to move the Minyari Dome project forward.
Brightstar Resources (ASX:BTR)
Brightstar has received the latest assay results from the drilling at the Lord Byron deposit within the Jasper Hills Gold Project. The drilling has revealed broad zones of gold mineralisation with some high-grade sections, such as 26 metres at 2.69 g/t gold, including 3 metres at 12.4 g/t gold. This drilling aims to improve confidence in the resource estimate and increase understanding of the deposit. Additional results from diamond drilling and ongoing work at the Menzies Gold Project are expected soon.
At Stockhead we tell it like it is. While Antipa Minerals and Brightstar Resources are Stockhead advertisers, they did not sponsor this article.
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