Market Highlights: Gold hits new highs while Meta misses the mark; and 5 ASX small caps to watch

The ASX may dip as Wall Street fell overnight
Meta’s projections disappointed investors, while Microsoft delighted
Super Micro’s stock plummeted 33pc after its auditor resigned

The ASX is expected to dip a bit after Wall Street closed lower. At 8am AEST, ASX futures were pointing down by 4 points.

Overnight, the S&P 500 fell by 0.33%, the blue chips-focused Dow Jones slipped by 0.22%, and the tech-heavy Nasdaq tumbled by 0.56%.

The earnings season continued in earnest in the US.

As we reported after the bell yesterday, Reddit said it has exceeded sales forecasts for Q3, and anticipated a robust holiday season. Shares rose 42%.

Microsoft rallied by 0.75% after hours as it reported strong earnings in Q3, driven by a 22% growth in its Azure cloud business, surpassing expectations.

CEO Satya Nadella said the company continues to invest heavily in AI projects, and seeks new energy sources to power its data centres.

Investors sold Meta shares despite the company projecting stronger holiday sales, with the stock price falling by 3%.

While Meta reported a 19% year-over-year sales increase and expected Q4 revenue between US$45 billion and US$48 billion, this fell short of analysts’ US$46 billion forecast.

Chipmaker Super Micro plunged 33% after Ernst & Young resigned as the company’s auditor, citing serious concerns about its internal controls and accounting practices.

The resignation followed a troubled year for Super Micro, which included a short seller report, delays in filing financial statements for 2024, and reports of a federal investigation.

Crypto exchange Coinbase‘s stock price slipped 4% after the company reported Q3 earnings and revenue that fell short of analysts’ expectations.

Drugmaker Eli Lilly‘s stock tumbled by 6% after the company missed profit and revenue expectations for Q3 primarily due to disappointing sales of its weight loss drug Zepbound and diabetes treatment Mounjaro.

On the data front, traders reduced their bets on Fed interest rate cuts after new data showed the US economy grew strongly in Q3.

The growth was driven by increased spending by households and higher defence spending from the government. Also a key measure of inflation rose to 2.2%, which is close to what the Fed Reserve aims for.

Over the Atlantic, the Euro zone economy grew by 0.4% in the last quarter, beating expectations of 0.2%. But it’s still a bit weak, with industry in recession and household spending hardly budging, according to Eurostat.

Meanwhile, the gold price hit a record high of $US2,789.90 an ounce, topping the previous record from Tuesday. And oil prices bounced back by 3% after a couple of days of losses.

Now read Josh Chiat’s Western investors return to gold as ETFs power demand to record levels

“No reason for RBA to rush into a rate cut”

Yesterday, the ABS released the CPI report, revealing that Australia’s annual inflation rate has decreased to 2.8%, down from 3.8% earlier this year.

Andrew Canobi at Franklin Templeton noted “the inflation number all but kills whatever glimmer of hope remained of a rate 2024 cut.”

Canobi also said the headline inflation figure is artificially low through electricity subsidies.

“Underlying trimmed mean at 0.8% for Q3 24 and 3.5% YoY is what matters and, whilst inching closer to target isn’t close enough to the 2-3% target.

“Services inflation was actually a bit stronger at 4.6% YoY.

“The still solid labour market is also telling the RBA there’s no reason to rush into a rate cut.”

In other markets …

All prices at 8.30am AEST.

Gold price climbed by a further 0.5% to US$2,787.32 an ounce, just shy of all-time highs.

Oil prices climbed by 3%, with Brent crude now trading at US$73.02 a barrel.

The benchmark 10-year US Treasury yield rose by 4 basis points (bond prices lower) to 4.30%.

The Aussie dollar rebounded modestly by 0.25% to US65.79 cents.

Bitcoin traded flat in the last 24 hours at US$72,317, while Ethereum climbed by 1% to US$2,657.

Meanwhile, iron ore lifted slightly by 0.2% to $US103.80 a tonne.

5 ASX small caps to watch today

Talga Group (ASX:TLG)
Talga said the Swedish Supreme Court has dismissed all appeals regarding the environmental permit for Talga’s Nunasvaara South natural graphite mine, meaning the permit is now officially in force. This decision came after several milestones for the Vittangi Anode Project, including a €70 million grant from the EU Innovation Fund for Talga’s Luleå Anode Refinery and approval for the Nunasvaara South mine’s Exploitation Concession. Talga’s board is now set to approve a Final Investment Decision (FID) once customer agreements and financing are finalised, with construction expected to take 18-24 months to begin production after the FID.

RemSense Technologies (ASX:REM)
RemSense has announced significant contract expansions with Chevron, building on its partnership with the global energy company. These extensions are valued at $707,750 in Northwest Australia and approximately $104,000 in South Asia, and they highlight its expertise in high-resolution photogrammetry scanning and image processing through the virtualplant platform. The project work is set to be completed by the end of December.

Everest Metals Corporation (ASX:EMC)
Everest has reported high-grade gold findings at its Revere Gold Project, with assays showing impressive results during its bulk sampling and drilling program. The best results include 85.1 g/t, 43.4 g/t, and 30.5 g/t of gold from various depths. These findings have revealed a mineralised zone over at least 90m wide and 280m long, extending from the surface down to 130m. This zone is part of a larger 7km gold system known as the Revere Reef. With high-grade gold located close to the surface, the project has potential for low-cost development. The company is also planning a 5,500m drill program to further explore the area.

Bubs Australia (ASX:BUB)
Bubs has reported strong trading performance for October and the first quarter ending 30 September. The group achieved gross revenue of $11.8 million in October, which is a 121% increase compared to the pcp, and total revenue for Q1 FY25 reached $24.2 million. The company reported a gross profit margin of 43% for Q1, up from 36% a year earlier. It continues to follow FDA guidelines for its clinical trial in the US, with approval expected in October 2025. Bubs reported $14.3 million in cash and equivalents, along with $3 million in undrawn debt facilities. The company reaffirmed its outlook for FY25, targeting $102 million in net revenue and a gross margin of over 40%.

Paradigm Biopharmaceuticals (ASX:PAR)
Paradigm has submitted a revised Phase 3 clinical trial protocol (PARA_OA_012) to the US FDA. If the FDA has no further questions during this 30-day review, enrolment for the trial is expected to begin in Q1 2025 at up to 10 sites in Australia. The company said it is preparing for the trial and aims to keep investors updated on its progress. PAR noted the submission is a significant milestone in its mission to provide a treatment for knee osteoarthritis.

At Stockhead we tell it like it is. While Everest Metals and Paradigm Biopharmaceuticals are Stockhead advertises, they did not sponsor this article.