Market Highlights: Nasdaq plunges, how a high oil price impacts your portfolio, and 5 ASX small caps to watch
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Aussie shares are poised to fall at the open, tracking movements on Wall Street overnight. At 8am AEST, the ASX 200 index futures was pointing down by -0.2%.
In New York, the S&P 500 fell by -1.43%, the blue chips Dow Jones index was down by -0.32%, and the tech-heavy Nasdaq plunged by -2.43% – its worst one-day drop in 2023.
Nasdaq was dragged down by Google parent Alphabet, which fell -9.5% after its Q3 cloud division results missed estimates. Overall however, Alphabet beat analysts’ expectations on revenue and earnings per share.
Apple and Amazon were also down ahead of their results, while Microsoft rose 4% in after its Q1 net income jumped 27%.
Meta meanwhile jumped 3% in extended trading following beats on top and bottom lines as its revenue jumped by 23% in Q3.
It’s been a huge week for US earnings, and of the 146 of the S&P 500 companies that have reported, 80% have delivered earnings above expectations.
Later today, production results are due for Fortescue Metals, Pilbara Minerals, Allkem, Regis Resources and Sandfire Resources, says Commsec.
The crucial US GDP data is also expected tonight when US opens.
Crude oil prices jumped almost 2% again overnight, with Brent trading at US$88.25 a barrel.
Should the US tighten sanctions on Iran’s crude oil exports in response to the country backing Hamas, it will impact investment portfolios around the world, says the CEO of de Vere Group, Nigel Green.
“Portfolios that include energy sector assets can be directly affected by the sanctions on Iran’s crude oil,” said Green.
“While some energy stocks may benefit from rising oil prices, others may face challenges due to increased production costs,” he added.
Green also says dividend stocks in the energy sector could see price increases, which might be positive for income-focused investors.
“However, dividend sustainability may be threatened if higher oil prices lead to increased expenses for energy companies,” he warned.
The rise in oil prices due to sanctions can also lead to broader economic consequences, particularly in the form of inflation.
“Higher interest rates make borrowing more expensive for businesses, impacting their expansion plans and investments. This, in turn, affects stock prices and overall portfolio performance.
“In addition, changes in oil prices influence currency exchange rates. Investors in currency markets may need to navigate these shifts, which can impact the value of their investments,” said Green.
Gold price traded flat at US$1,970.24 an ounce.
US bond yields climbed again after news of accelerating US new home sales. The 10-year yield jumped 11bp while 2-year was up 5bp.
Iron ore futures gained +0.2% to US$118.48 a tonne.
Base metals prices also traded higher, with 3-month nickel futures rallying by +0.53%, and copper futures by +1%.
The Aussie dollar slipped -0.75% to US63.14.
Meanwhile, Bitcoin has surged by another 3% in the last 24 hours to US$33,767.
BTC has now surged by more than 15% since Monday amid speculation that BlackRock’s proposed exchange-traded fund (ETF) for Bitcoin could be nearing SEC regulatory approval.
Variscan Mines (ASX:VAR)
Variscan says the Spanish government has approved a three-year extension of the exploration licence for the Guajaraz Project located in central Spain. VAR says Guajaraz is a de-risked, brownfield zinc-rich polymetallic (zinc-lead-silver-copper) project in a known resource-rich region. Work program designed with soil geochemistry will now commence this quarter.
Metal Hawk (ASX:MHK)
Pegmatite mapping and geochemical surveys have identified a compelling large lithium target at the Yarmany Project. The main mapped pegmatite at the “F-camp” prospect is over 1km long and up to 140m wide, with a favourable geochemical lithium-caesiumtantalum (LCT) signature for lithium mineralisation. Rock chip sampling has returned up to 1,268ppm Li2O with highly elevated pathfinder elements including caesium (Cs), rubidium (Rb), tantalum (Ta) and beryllium (Be).
Vulcan Energy Resources (ASX:VUL)
Vulcan announced that it has received a conditional, non-binding Letter of Support from Export Finance Australia (EFA) for up to $200 million for the upcoming financing of Phase One of Vulcan’s Zero Carbon Lithium Project in the Upper Rhine Valley. CEO Cris Moreno says this marks the deepening relationship between Australia and the EU as part of the international push to develop and secure global supply chains for clean energy critical minerals.
hipages Group (ASX:HPG)
hipages has agreed to divest PropTech Labs stake for $8.4m, which represents a 30.9% pre-tax return on original investment of $6.25m in November 2021. The company has also reaffirmed its free cash flow positive target for FY24.
Xanadu Mines (ASX:XAM)
Xanadu provided an update on infill drilling at its Kharmagtai Project in Mongolia. Drilling has intersected a new zone of shallow hypogene gold mineralisation below previously recognised oxide mineralisation at the Golden Eagle Deposit. Results include: 31m @ 1.21g/t Au and 0.24% Cu (1.68g/t eAu) from 96m.
At Stockhead we tell it like it is. While Variscan Mines, Metal Hawk and Vulcan Energy Resources are Stockhead advertisers, they did not sponsor this article.