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Market Highlights: Nvidia loses top spot to Microsoft on ‘Triple Witching’ day, and 5 small caps to watch

Nvidia lost -3pc, relinquishing top market cap spot to Microsoft. Picture Getty

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  • ASX 200 to open lower on Monday
  • Nvidia lost -3pc, relinquishing top market cap spot to Microsoft
  • Australian CPI report to be released on Wednesday

 

The ASX 200 is poised to edge slightly lower when the market opens on Monday as Wall Street closed flat. At 8am AEST, the ASX200 futures contract was pointing down by -0.2%.

On Friday, the S&P 500 fell by -0.16%, the blue chips Dow Jones index was up by +0.04%, and the tech-heavy Nasdaq tumbled by -0.18%.

Friday was a significant trading day on Wall Street known as “triple witching”.  This quarterly event, which sees the simultaneous expiration of derivatives contracts tied to equities, index options, and futures, had an estimated US$5.5 trillion in contracts maturing.

The trading volume was exceptionally high, with nearly 18 billion shares exchanged on US markets — over 55% above the three-month average.

Nvidia fell another -3% as the company handed the position as the world’s most valuable company back to Microsoft.

Nvidia, Microsoft, and Apple, each valued at over US$3 trillion, are in a three-way race to become the world’s most valuable company.

Keith Lerner at Truist Advisory Services announced his firm’s downgrade of the technology sector to “neutral”. Despite a positive long-term outlook, Lerner noted the sector seems overextended in the short term.

“Although we still have a favourable long-term view of technology, on a shorter-term basis the sector appears extended, and we would not be chasing the sector,” said Lerner.

However, Lerner said that the sector is not in ‘bubble’ territory and that secular growth, particularly in artificial intelligence, will continue.

Elsewhere, American Airlines fell -0.3% after announcing that it was halting pilot training until the end of this year. The decision is the latest move by a major US airline to adjust to fluctuating travel demand and delays in aircraft deliveries.

Sarepta Therapeutics was the best performer, up +30%, after a senior US FDA official granted broad approval to Sarepta’s gene therapy for a rare muscle disease in children, even though data demonstrating its effectiveness in slowing the disease’s overall progression is limited.

Meanwhile, Airbus SE is nearing a deal with Spirit AeroSystems to take over parts of its business, potentially allowing Boeing to acquire most of the company by next week.

 

What will the CPI report show us this week?

Back home, the much anticipated May CPI data will be released on Wednesday, with predictions indicating that annual inflation may have increased to 3.8% in May, up from 3.6% in April.

Following the CPI release in April, market swaps slightly raised the probability of a 25bp rate hike in September to 20% from 12%.

Traders also reinforced their expectations that any potential rate cut would not occur until August or September of next year, approximately 15 months away.

The RBA has indicated a cautious approach to policy adjustments, emphasising its preference to avoid overly frequent changes.

Since May 2022, the RBA has raised interest rates by 4.25%, reaching a 12-year high of 4.35%.

However, in the past four meetings following the last increase in November, the RBA has kept rates unchanged. This decision comes as consumers have become more cautious with their spending and economic growth has significantly slowed down.

 

Back to markets …

Gold price fell by -1.6% to US$2,320.85 an ounce.

Oil prices were down around -0.5%, with Brent crude now trading at US$85.10 a barrel.

The benchmark 10-year US Treasury yield was flat at 4.26%.

The Aussie dollar was down by -0.3% to 66.41 cents.

The iron ore price retreated by -1.6% to US$105 a tonne.

Bitcoin meanwhile slipped by -1% in the last 24 hours to US$63,677 while Ethereum was tumbled by -2.5% to US$3,416.

 

5 ASX small caps to watch today

Imugene (ASX:IMU)
Imugene has administered the first patient with cholangiocarcinoma, a type of bile tract cancer, in the intravenous infusion combination arm of the OASIS trial at City of Hope in California. This trial marks a significant milestone as it combines a CD19-expressing oncolytic virus with a CD19-targeting drug, making it a world-first approach. The study aims to enroll 40-45 patients with advanced solid cancers that have metastasised. Depending on how quickly patients are recruited, initial data from the combination therapy are anticipated in Q4 of 2024.

NewPeak Metals (ASX:NPM)
NPM has announced that it has signed an agreement to divest 100% of its stake in the Finnish subsidiary, which holds the portfolio of Sweden Strategic Mineral permits. This sale aligns with its recent divestment of the Finland Gold permits. NewPeak will receive CAD$250k worth of shares in the Canadian listed company. Additionally, a milestone payment of CAD$750k will be awarded to NewPeak upon reporting a JORC Inferred Resource of at least 3 million tonnes at 0.3% WO3Eq.

Sprintex (ASX:SIX)
Sprintex has partnered with Net 0 Enerji to exclusively distribute its G-Series Jet Blowers in Turkey. Net 0 Energy specialises in energy management solutions, complementing Sprintex’s efficient G-Series Jet Blowers that consume up to 50% less energy. The agreement spans three years and hinges on Net 0 Energy meeting an initial order requirement and quarterly sales targets totaling US$3,874,500.

Reward Minerals (ASX:RWD)
Reward announced that the International Preliminary Examining Authority (IPEA) has issued a positive report on the patentability of its processing technology for extracting Potassium Sulphate (SOP) directly from concentrated seawater and other high-sulphate brines. The IPEA confirmed that claims 1-17 meet the requirements for novelty, inventive step, and industrial applicability under the Patent Cooperation Treaty. Next steps involve Reward filing national/regional patent applications by February 2025 in selected countries/regions where protection is desired. While the list of countries/regions is still being finalized, it will include Australia and locations known for significant solar salt production from seawater.

Strickland Metals (ASX:STK)
STK said exciting developments continue at Palomino, Bronco, and Warmblood with significant gold discoveries. Palomino has expanded to over 600m in strike length, revealing new high-grade results. Warmblood has identified a new high-grade lode through initial assays, while Bronco has shown strong gold intercepts in its first diamond drilling efforts. Further exploration is planned to build upon these promising findings.

 

At Stockhead we tell it like it is. While Sprintex and Strickland Metals are Stockhead advertisers, they did not sponsor this article.

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