Market Highlights: First the gains and then the guilt as hangover and hubris drive Day 1 on Wall St

ASX set to fall on Day 2, 2024
S&P 500 edges close to a new record high
Mining and Energy stocks on watch as commodity prices fell overnight

LADY MACBETH:

Was the hope drunk
Wherein you dress’d yourself? hath it slept since?
And wakes it now, to look so ~~green~~ RED and pale
At what it did so freely?

Yes. Eddie’s asleep in Vegas and suddenly your day starts with Shakespeare on the Bourse.

He’ll be back next week.

For now, it’s me and a whole lot of red inviting Aussie shares ahead of the open on Day Two of the new trading year after Wall Street stocks and commodity prices fell overnight.

At 7.30am AEDT, the SPI 200 futures index was pointing down by -66 points or -0.87%.

In New York, the S&P 500 and the tech-heavy Nasdaq Composite started in the red, and got redder down 0.7% and 1.8%, respectively.

Most major commodities retreated overnight with ASX mining and energy stocks in the firing line today.

After the ASX Energy Sector surged +1.5% on Tuesday, oil prices fell away with geopolitical concerns offset by lifting global supplies, especially from non-OPEC producers. Crude production in the States is at record highs, (estimated at 13.3 million barrels per day in the latest reporting period), while Brazil and Guyana have also struck new record output.

On Wall Street, fear and guilt mixed to sour the end-year sentiment which helped lifted the three major indices well into double digits.

A growing number of previously bullish punters suddenly appear worried they’ve gotten well ahead of themselves already in 2024.

With doubts emerging that equity markets look over-ripe, US stocks overnight compounded last Friday’s losses on the final trading day of 2023, with a Barclays downgrade of Apple helping undermine confidence in some of the euphoric bets made on the so-called Magnificent Seven tech stocks which were behind so much of 2023’s gains.

The S&P 500 is coming off a nine-week winning blitz – its best run since 2004.

Overnight, Canaccord Genuity put out a note placing the S&P 500 in “extreme overbought” territory.

“The stage is set for a pullback,” they said.

Apple shares were down -4% after the Barclays downgrade.

Nearby, the world’s most valuable automaker (Tesla), run by the world’s most volatile CEO (Elon) delivered a record number of vehicles for Q4, helping the company hit its 2023 target of 1.8 million. That was good, but the mood is worse after BYD on Monday said it produced more than 3 million new energy vehicles in 2023, outpacing Elon for a second straight year.

And crypto majors are back in currency – both Bitcoin and Ether are rising up the charts early in 2024.

Bitcoin is leading the way with a further 3.16% gain.

Bitcoin soared near US$46k early Tuesday in NY, before paring gains according to CoinDesk data.

Bitcoin has risen almost 20% since the start of December as a January 10 deadline for the US Securities and Exchange Commission (SEC) to give its blessing for a BTC ETF nears.

The cryptocurrency soared near the US$46,000 mark early Tuesday before losing some gains and is currently trading around US$45,555.

In other markets …

Gold price fell by -0.21% to US$2,058.03 an ounce.

Oil prices plunged by -1.5%, with WTI now trading at US$70.60 a barrel.

The benchmark 10-year US Treasury yield rose above 3.95% on the first trading day of 2024, moving further away from the five-month lows of 3.78% touched last week.

Iron ore futures were flat.

The Aussie dollar slipped by -0.77% to US67.58c.

4 ASX small caps to watch today

5E Advanced Materials (ASX:5EA) (Nasdaq: FEAM), a boron and lithium punter with U.S. government Critical Infrastructure designation for its 5E Boron Americas Complex, says it has officially begun mining operations at the project with the startup of the wellfield injection process. The company is now working under its EPA UIC permit to begin extracting valuable minerals from its wholly owned project at Fort Cady.

Infratil (ASX:IFT) says an independent valuation of its investment in CDC is up by some $133 million over the three months since the 30 September 2023 valuation. Infratil’s 48.24% investment in CDC is now valued at between $3,736 million to $4,335 million at the end of September 2023. The uplift in value ‘reflects the strong progress CDC has made securing new customer contracts, in line with expectations in September 2023,’ but is also largely offset by changes in macroeconomic inputs.

Rincon Resources (ASX:RCR) has new results for the Mammoth drilling program at its South Telfer Project in the Paterson Range, WA, confirming the presence of a developing gold system at Westin, with wide zones of anomalous gold mineralisation highlighting at least three interpreted sub-vertical lodes that remain open down-dip and along strike over a potential distance of at least 400m.

“At Mammoth, two drillholes (23STRC043 and 046) confirmed the presence gold mineralisation proximal to the NE contact zone of the Mammoth Dolerite,” the company says.

MTM Critical Metals (ASX:MTM) will spin out of a trading halt today after an exciting few days. MTM drops an announcement regarding assay results from previous drilling at its Pomme REE project in Quebec after copping an ASX speeding ticket for its recent furious rise.