• Local shares set to open higher on Wednesday, extending Tuesday’s gains
  • PwC is predicting that one in six fundies will vanish by 2027
  • The number of BTC wallets holding at least 1 Bitcoin has reached an all-time high

 

The ASX is set to extend gains and open higher on Wednesday, tracking movements in New York. At 8am AEST, the ASX 200 index futures was pointing up by +0.5%.

Overnight, the S&P 500 and tech-heavy Nasdaq climbed by around 0.5% each ahead of the pivotal inflation report later today (US time).

“Headline CPI might fall to 2.9% and core could see the lowest reading since 2021, but sticky inflation signs will likely remain,” said Oanda analyst, Edward Moya.

The market is also anticipating a kickoff in reporting season, with the US airlines first off the rank on Thursday and big banks on Friday.

To stock news, Amazon rose 1.3% as it kicked off its Prime Day promotion day – an event closely watched to gauge sentiment on US retail spending.

Microsoft rose 0.2% as it finally won approval to complete its US$69 billion acquisition of video game maker Activision Blizzard.

Elsewhere, the Bank of England is going to have a tough decision with the August 3 policy meeting as hot wages data overnight kept the bets going for further tightening.

“The case for the BOE to hike by 50bps got a lot stronger and that has helped take the British pound to a 15-month high against the dollar,” said Moya.

 

One in six fundies will be gone by 2027, says PwC

Consulting firm PwC is predicting that one in six asset managers will vanish by 2027, as firms grapple with ‘existential’ pressures.

According to the report, consolidation will play a key role as nearly three-quarters of asset managers are contemplating an acquisition or a merger.

An example of a recent M&A includes Franklin Templeton’s acquisition of Putnam Investments for over US$1 billion.

PwC says inflation, market volatility, and interest rates are the primary drivers of this decline as fundies struggle with largest decline in assets in a decade.

PwC forecasts that the top 10 asset managers will control half of all assets by 2027, up from 42.5% in 2020.

PwC also predicts that robo-advisory services utilising AI will manage US$6 trillion by 2027.

 

In other markets …

Iron ore rebounded by over 2%, trading at US$106 a tonne.

Crude oil prices also rebounded by over 2%, with WTI trading at US$74.75 a barrel.

Crude is getting a boost as expectations grow for strong demand from China and developing nations, as well as demand from travel this summer.

Gold was up +0.4% to US$1,932.40 an ounce.

Gold bulls want to see inflation expectations to continue to tumble.

“Tonight’s inflation report, if cooler than expected, could help gold find a home above the $1950 level,” predicted Moya.

Bitcoin meanwhile was up by +0.65% in the last 24 hours to US$30,524.

According to data from Glassnode, the number of wallets holding at least one Bitcoin has reached an all-time high of 1,008,737 million.

This suggests increased decentralisation of the network, supported by the fact that the number of whales is also decreasing.

 

5 ASX small caps to watch today

KMD Brands (ASX:KMD)
KMD says it’s on track to deliver record $1.1 billion full-year sales, despite softening consumer sentiment in Q4. Gross margin remains resilient, expected to be in line with last year. Underlying EBITDA meanwhile is expected to be in the range of $105 million to $110 million, with three weeks of trade still to come.

Red Mountain Mining (ASX:RMX)
RMX says thick high grade lithium was discovered from near surface at Mustang in Nevada. The company confirmed high grade lithium claystone was intersected in 8 out of 10 drillholes. Fast-tracked lithium assay results include: 48.77m @ 687ppm Li from 3.05m, and 30.50m @ 629ppm Li from surface.

Little Green Pharma (ASX:LGP)
LGP was awarded commercial tender to supply up to $1.6 million (€1 million) of its CBD50 product to French medicinal cannabis trial. LGP remains the largest supplier with over 85% of the 3,000 participants expected to trial LGP CBD products. LGP says a future French medicinal cannabis market as a highly prospective commercial opportunity for the company.

Australian Silica Quartz (ASX:ASQ)
ASQ has received a $1 million fee from Private Energy Partners under the recently announced Project Development Heads of Agreement on ASQ’s 100% owned Quartz Hill MGSi Quartz Project in North Queensland. This fee is for the exclusive right to purchase 10 million tonnes of MGSi Quartz (Metallurgical Grade Silicon Quartz Lump feedstock) from the mine gate at Quartz Hill at a 10% discount to the prevailing market price, or such price that would constitute a fair market return to ASQ (whichever is the greater).

Heavy Rare Earths (ASX:HRE)
HRE’s metallurgical program has delivered two-fold grade increase and up to 91.3% extraction of magnet rare earths at the Cowalinya project in the Norseman-Esperance region of WA. High extractions were achieved with low acid consumption (as low as 3.8 kg/t). New Mineral Resources and maiden exploration target for Cowalinya is now expected in Q3 2023.

 

At Stockhead we tell it like it is. While Heavy Rare Earths is a Stockhead advertiser, it did not sponsor this article.

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