• The ASX 200 looks set to open 0.70% lower today
  • There’s usually a rally in the week after Xmas 
  • Global markets waiting to see how China’s reopening goes in January

 

U.S. markets closed lower yesterday; the Nasdaq took a 1.35% tumble and the Dow Jones dropped 1.10%. The Aussie market is expected to open 0.7% lower.

December is typically a strong month for equities, with a rally in the week after Christmas, but it looks like the grinch has shown up this year.

Still, investors are clinging to hope that the global economy will be bolstered when China lifts Covid-19 quarantine requirements on international arrivals early in January, at a time when many nations have lifted interest rates in an effort to tame inflation. 

But the virus is still spreading rapidly as the country reopens, so we should take these ‘boosting the global economy’ hopes with a grain of salt.

“China has really gone full force into abandoning zero Covid and there are going to be some growing pains with that effort,” Glenmede vice president of investment strategy Michael Reynolds said.

“The explosion in case counts there is probably going to be economically disruptive to the downside for them.”

 

5 ASX small caps to watch on the ASX today:

Strategic Elements Ltd (ASX: SOR) reports multiple milestones in the development of Energy Ink, a battery tech that generates electrical energy from moisture in the air.

Brookside Energy (ASX:BRK) “look to be on track to set a record for the company in terms of days from spud to first sales” at the Wolf Pack Well in the world-class Anadarko Basin.

Canadian lithium explorer Critical Resources (ASX:CRR) will acquire the Gullwing-Tot Lakes property, ~5.5km from the Mavis Lake ‘Main Zone’ where the company has been successfully drilling since April 2022.

Bauxite miner Metro Mining (ASX:MMI) has been forced to cease the operating season early due to a significant weather system threatening the Gulf of Carpentaria.

“The company would normally close down operations around this time of the year, however, intentions had been to load a further 19th Capesize vessel for the April to January season,” it says. “This will now not occur.”

And explorer Golden Mile (ASX:G88) has uncovered new rare earths and base metals targets for follow-up at the Yarrambee project in WA.

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