• Wall Street rebounds sharply, with Big Tech leading the pack
  • Fed speak however dampens market mood, ASX to open lower today
  • Costco brings in US$200m from gold bar/coin sales

 

Aussie shares are set to fall further on Friday despite a rebound on Wall Street. At 8am AEDT, the ASX 200 index futures contract was pointing down by -0.30%.

Overnight, the S&P 500 rose by +0.74% , the blue chips Dow Jones index was flat, and the tech-heavy Nasdaq surged by +1.68%.

Big Tech stocks led the rebound in the run up to quarterly earnings season, with Apple and Nvida both up more than 4%.

The other five members of the Magnificent Seven – Alphabet, Amazon, Google, Meta, Microsoft, and Tesla – also rose. Amazon closed at a record high.

The VIX index, which is also dubbed Wall Street’s fear index and measures the market’s forward volatility, plunged by -5%, suggesting traders are baking in more stability ahead.

ASX commodity stocks will be in focus after gold and iron ore rallied by over +1.5%.

Meanwhile, comments from Fed Reserve Bank of Boston president Susan Collins and New York Fed president John Williams have dampened market sentiment.

Collins said it it may take more time than previously thought to begin cutting rates, which means fewer rate reductions this year.

“Overall, the recent data have not materially changed my outlook, but they do highlight uncertainties related to timing, and the need for patience …,” she said.

Williams echoed her comments, saying that US inflation still has ‘a ways’ to go to get to 2%.

“There’s no clear need to adjust policy in the very near term,” he said.

 

Costco brings in US$200m a month selling gold bars

Big-box retail chain Costco started selling gold bars to its members last October, and Wells Fargo analysts believe that the product is now bringing in US$200 million a month for the retailer.

Costco doesn’t reveal the price of the 1-ounce bullion to non-members online, but it’s estimated to be ~2% above the prevailing spot price.

And that price has since soared since Costco got into the gold game.

Reddit threads have cropped up where people give one another advice on how to purchase the bars before they sell out.

Costco has also been selling silver coins, advertised as 99.9% pure silver, since January this year.

So how much is Costco profiting from this?

“Given its pricing and shipping costs, it’s likely a very low-profit business at best,” said Wells Fargo analysts.

The Costco stock price, listed on Nasdaq, has risen by 12% in 2024.

 

In other markets …

Gold price rebounded by +1.6% to US$2,373.59 an ounce.

Oil prices retreated by -0.8%, with Brent now trading at US$90.22 a barrel.

The benchmark 10-year US Treasury yield rose by 5bp (bond prices lower) to 4.59%.

Iron ore price climbed +1.6% to S$108.35 a tonne.

The Aussie dollar lifted by +0.4% to US65.41 cents, rebounding from yesterday’s -1.7% fall.

Bitcoin meanwhile was down almost -1% in the last 24 hours to US$70,253.

 

5 ASX small caps to watch today

Lunnon Metals (ASX:LM8)
Lunnon reported the results of a recent reverse circulation (RC) drilling program at the Baker nickel deposit, the company’s cornerstone asset at its Kambalda nickel project. Extensional drilling program has delivered growth potential up-dip. Results include 9.0m @ 5.29% Ni, 6.0m @ 4.99% Ni, 7.0m @ 3.99% Ni and 3.0m @ 8.14% Ni. Mineral Resource Estimate will be updated in due course.

NewPeak Metals (ASX:NPM)
NewPeak announced that it has now finalised and executed the documents to sell the company’s Finnish subsidiary companies NewPeak Finland Oy and Kultatie Holding Oy, which hold the portfolio of Finland Gold permits. NewPeak will receive a total of CAD$500,000 in cash, CAD$1,000,000 in shares of the listed company, and a milestone payment of CAD$1,500,000 in cash or shares on reporting of a JORC Indicated 500,000 Oz Gold resource.

FBR (ASX:FBR)
FBR says its ordinary shares have commenced trading on the OTCQB Venture Market under the ticker “FBRKF”. The OTCQB Venture Market is a US trading platform operated by OTC Markets Group in New York. FBR says the listing will increase exposure to, and generate increased interest from, US domiciled retail and institutional investors in its shares.

Oncosil Medical (ASX:OSL)
OncoSil’s clinical strategy continues to progress, with the first patient treatment using the OncoSil device occurring in the UK for the TRIPP-FXX clinical study. The TRIPP-FXX study will assess the safety and efficacy of the OncoSil device when given with standard FOLFIRINOX chemotherapy for treatment of locally advanced pancreatic cancer.

Sierra Rutile (ASX:SRX)
Sierra has announced the results of the Definitive Feasibility Study (DFS) for the Sembehun Project in Sierra Leone. Highlights include: Expected mine life of 14 years, no change to previous Sembehun Ore Reserve of 173.7 Mt @ 1.46% rutile, and an average of 175ktpa of rutile production projected from 2028 to 2038. Capex estimate is reduced by 11% to $301 million, or a $36 million reduction on the 2022 Preliminary Feasibility Study (PFS). Expected payback is within 55 months from project commencement.

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