Here’s an expert's view on the economic and geopolitical situation going into 2024. Picture Getty
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Aussie shares are poised to open higher on Tuesday after a rally on Wall Street. At 8am AEDT, the ASX 200 index futures was pointing up by +0.1%.
Overnight, the S&P 500 rose by +0.32%, the blue chips Dow Jones index was up by +0.32% and the tech-heavy Nasdaq lifted by +0.12%.
Traders began the US week on a cautious note ahead of the US CPI release tomorrow, and the Fed’s last scheduled rates decision of 2023 on Wednesday (US time).
The market expects the Fed to pause this week, but commence cutting rates by mid next year.
“The biggest risk to ‘risk-on’ is the fact that the Fed does not do what the market is telling it that it is going to do, which is slash interest rates over the course of 2024,” David Neuhauser, chief investment officer of Livermore Partners, told CNBC.
To stocks, Nike rose 2.3% after analysts at Citigroup say “buy”.
Department store Macy’s surged almost 20% as exisiting shareholders, Arkhouse Management and Brigade Capital, combined to lob a US $5.8bn takeover offer that could take the iconic retail brand from the stock market.
Most crypto related stocks like Coinbase and Riot Platforms fell after Bitcoin plunged more than 7% in the last 24 hours to US$40,600.
Cathy Wood’s ARK fund has been consistently selling Coinbase shares over the past couple of weeks.
Back home, there will be lots of data to chew on today.
RBA boss Michelle Bullock will be speaking in Sydney, while Westpac consumer sentiment index and NAB business confidence survey will be released.
Also check out: Traders’ Diary: Everything you need to know before the ASX opens
Economic background is fundamental to any investor – short or long term focused.
Hani Abuagla, a senior market analyst at XTB MENA breaks down the catalysts for the stock market over the next year and beyond.
In the US, Abuagla said there were initial fears the Fed’s monetary tightening could lead to a recession.
“However, so far the economic slowdown has been limited and some indicators suggest that a … slowdown is already behind us.”
“But while the US economy seems to be holding up, Europe might be poised for some kind of a recession and its severity will be decided by the global environment,” Abuagla said.
We also now live in a world where geopolitical tensions have become a part of the picture.
“It looks like both countries [US and China] are on the collision course regardless of what the leaders are saying,” said Abuagla.
To gold, and from a fundamental standpoint, the demand for gold has been relatively muted over the past year.
“However, a weaker dollar, coupled with a stronger Chinese yuan and Indian rupee, could change this situation.”
And in 2023, the oil market managed to maintain relative stability, in spite of two production cuts implemented by OPEC+.
“The key question for 2024 is whether OPEC+ countries, particularly Saudi Arabia and Russia, will choose to restore a portion of their normal production, potentially resulting in a more balanced market,” said Abuagla.
“Despite China’s rise to becoming the world’s leading oil importer, investors are unsure if the increased demand from China and India will be sufficient to catalyse a significant rebound in oil prices.”
Gold price fell by -1.2% to US$1,980.83 an ounce.
Oil prices gained 0.5%, with Brent now trading at US$76.27 a barrel.
US 10-year Treasury yield traded flat at 4.24%.
Iron ore futures was down -0.2% to US$135.16a tonne.
The Aussie dollar fell by -0.16% to US6566c.
Meanwhile, Bitcoin tumbled by -7% in the last 24 hours to US$40,600.
Armada Metals (ASX:AMM)
Assays have been received for the first two diamond drill holes from the Phase 1 drilling program at the Bend Nickel Project. Significant results (using a 0.4% Ni lower cut-off) include: Hole BNDDD002 – 0.76m @ 10.33% Ni, 2.24% Cu and 0.1% Co from 379.38m, and Hole BNDDD001 – 16.65m @ 0.64% Ni, 0.07% Cu and 0.013% Co from 118.4m.
Cycliq Group (ASX:CYQ)
Cycling company Cycliq announced a successful Black Friday campaign. This Black Friday showed that the core Cycliq offering remains an essential cycling purchase as demonstrated by a strong increase in the number of individual orders (total order count increased by 29%) and $1.2 million in unaudited gross revenue for the month of November.
Kula Gold (ASX:KGD)
Kula reported that drill hole logging at the Cobra Lithium Prospect has been successful in intersecting pegmatites over multiple intervals to 210m down hole depth. Eleven holes were logged with visual pegmatites in multiple intervals varying from 3m to interpreted 55m thick. Recent rock chipping and mapping has increased the strike of the Cobra Lithium Prospect to 4.2km. Drill programme is now completed to 1,860m, while assay results are in progress.
Critical Resources (ASX:CRR)
Project development activities continue on multiple fronts to advance the Mavis Lake Lithium Project. Environmental monitoring and characterisation work streams have advanced towards their second-year of data collection, while engagement with the First Nations community continues. A full work program has been developed for 2024, and is scheduled to commence in early Q1 2024.
Spartan Resources (ASX:SPR)
Spartan reported another batch of good assay rounds. At the Never Never Gold Deposit, new gold intercepts include: 18.38m @ 6.10g/t gold from 453.0m down-hole. At the Four Pillars Gold Prospect, new gold intercepts include: 11.0m @ 2.44g/t gold from 162.0m down-hole. And at the West Winds Gold Prospect, new gold intercepts include: 61.0m @ 2.13g/t gold from 85.0m down-hole.
At Stockhead we tell it like it is. While Kula Gold and Spartan Resources are Stockhead advertisers, they did not sponsor this article.
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