Key tech earnings from Microsoft, Meta, Apple, and Amazon this week will be crucial. Pic: Getty Images
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The ASX200 index is expected to retreat when the market opens on Tuesday. At 8am AEST, the ASX200 futures contract was pointing down by 0.7%.
Overnight, Wall Street was mixed as investors awaited key announcements from central banks, upcoming economic reports, and earnings updates from four megacaps valued at almost US$10 trillion.
The S&P 500 finished the day 0.1% higher, the blue chips Dow Jones index fell by 0.12%, and the tech heavy Nasdaq was up by 0.07%.
Around 300 stocks in the S&P 500 went up, and after a rotation that nearly pushed the Nasdaq 100 into a correction, major tech companies saw gains, while smaller companies fell.
“While the selling pressure in the market’s top names won’t last forever, small caps can continue to perform well as the economy chugs along and as the Fed approaches its first rate cut of the current cycle,” said etoro’s Bret Kenwell.
Upcoming results later this week from Microsoft, Meta, Apple, and Amazon will be very crucial, especially after a disappointing start to the earnings season from Tesla and Alphabet.
Meanwhile, Fed Reserve officials are on the verge of lowering interest rates and chair Jerome Powell might reveal this on Wednesday.
“Investors may now be too dovish on US rates,” said Guy Stear, Head of Developed Markets Strategy at Amundi Investment.
“We expect a 25bp cut in September and another by year end, but the recent earnings disappointments in the US have pushed Fed funds rate expectations back to the early July troughs, implying a fifty percent chance of a third rate cut by December. This seems too aggressive in our view.”
The Nasdaq 100 has dropped about 8% in recent sessions as investors shifted their focus to smaller companies.
Will this rotation continue, or is it only a matter of time before Big Tech takes charge again?
The answer to that will come pretty soon, according to Jason Draho at UBS Global Wealth.
“Will earnings on tech [this week] be enough to renew investors’ faith?”
“Investors will be watching how those numbers play out and how they perform compared with expectations,” Draho told MarketWatch.
One reason for the rotation to small caps is that megatech have become too pricey. Nvidia is a key example of this.
So there are reasons to believe that this rotation would continue.
“Alert investors should prepare for the possibility that the leading stocks in the U.S. equity market may look quite different in the coming months,” said market expert, Raul Elizalde.
Now read: When safe havens fail, head on down to the niche corners of the ASX
Gold price fell by 0.15% to US$2,383.40 an ounce.
Oil prices were down by a further 1.5%, now down over 3% for the week, with Brent crude now trading at US$79.80 a barrel.
The benchmark 10-year US Treasury yield fell by a further 3 basis pointss (bond prices higher) to 4.18%.
The Aussie dollar rose modestly by 0.1% US65.57 cents.
The iron ore price traded flat at US$102.15 a tonne.
Bitcoin meanwhile was down up by 1.25% in the last 24 hours to US$67,345 while Ethereum climbed by 2.5% to US$3,343.
St Barbara (ASX:SBM)
St Barbara has announced a major boost in the Simberi ore reserves, which have increased by 40% to 2.8 million ounces of gold as of June 30. This increase follows a successful drilling program that upgraded 1.9 million ounces of resources from Inferred to Measured and Indicated. The overall mineral resource now stands at 5.0 million ounces. CEO Andrew Strelein said this upgrade supports the company’s long-term mining plan, and shifts the focus to expanding resources further in the coming year.
Geopacific Resources (ASX:GPR)
GeoPacific’s Scoping Study for the Woodlark Gold Project in Papua New Guinea reveals strong financial potential. The study projects a profitable 12-year operation with an estimated pre-tax value of $625 million and a return on investment of up to 40.5%. If gold prices rise, net cash flow could reach $1.95 billion. The project aims to produce 1.14 million ounces of gold and has most permits in place, with ongoing exploration potentially expanding resources.
Terra Uranium (ASX:T92)
Terra has reported exciting results from its Amer Lake project. Recent surface samples showed high uranium levels, with one sample reaching 7,950 ppm. These findings are leading to plans for further exploration and drilling. The company also completed a report to extend its mineral claims by 5 to 7 years. The project has an existing resource estimate of 15.3Mlb.
Fin Resources (ASX:FIN)
Fin Resources has reported its first drilling program at the White Bear Lithium Prospect in Canada. The assays show high-grade lithium, with some samples returning impressive results, including 2.15 meters at 1.76% Li2O and another segment at 3.27% Li2O, as well as several other strong readings. These high grades were found at very shallow depths, less than 20 meters from the surface. The company drilled eight holes totalling 1,009 meters, and the results are considered a success. Fin is now planning further exploration to identify additional targets and expand its findings.
Metal Bank (ASX:MBK)
Metal Bank has announced updates from its Millennium Project in north-west Queensland. Recent drilling results revealed high-grade graphite, with notable intervals of 2.6 meters at 19.2% total graphitic carbon, 5.8 meters at 17.4%, and 3.8 meters at 17.6%. This graphite was found along over 2 kilometres of drilling. The project also contains an existing mineral resource with copper, cobalt, and gold. All recent drill holes hit varying levels of sulphide minerals, including copper and cobalt. Metal Bank is moving forward with additional sampling and assays to further explore the project’s potential.
At Stockhead we tell it like it is. While Fin Resources is a Stockhead advertiser, it did not sponsor this article.
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