• ASX200 to open lower again after a mixed session on Wall Street
  • Goldman Sachs has put the probability of a US government shutdown at 90%
  • This expert says RBA meeting next week could herald the end of rate rises
  • Stocks to Watch: Cokal, Reward Minerals, James Bay Minerals, MTM Critical Metals, Noble Helium

 

Aussie shares are poised to open lower once again after a mixed session on Wall Street . At 8am AEST, the ASX 200 index futures was pointing down by -0.2%.

In New York, the S&P 500 rose by +0.02%, the blue chips Dow Jones index was down by -0.2%, and the tech-heavy Nasdaq lifted by +0.22%.

US investors weighed several issues, including a potential Fed government shutdown.

Goldman Sachs has put the probability of a US shutdown at 90%. ING meanwhile said a shutdown would stop the Fed Reserve from hiking interest rates further due to economic weakness it would bring, and the absence of data releases.

To stocks — Meta Platform was down -0.4% after Mark Zuckerberg unveiled two new high-tech headsets built for the metaverse at the Meta Connect conference.

Palantir surged 6.5% after signing a US$250m artificial intelligence contract with the US Army. Costco meanwhile was up 2% after its quarterly earnings per share came in above Wall Street expectations.

Elsewhere, oil stocks will be ones to watch today after crude prices jumped by almost 4% last night to one-year high, with Brent trading now at US$96.67 a barrel.

“Oil price rally is likely to continue, but it’s not sustainable in the longer run,” says a note from ING’s commodities analyst, Warren Patterson.

Patterson adds that he can’t see crude prices over US$100/bbl, because weaker demand and political pressure to increase supply would help bring oil prices back to levels slightly above US$90/bbl.

 

Is this the end of RBA rate hikes?

Jeffrey Triganza, Head of Market Analysis at Vantage Australia, believes that the RBA meeting next week could officially herald the end of rate rises.

Despite inflation rising, Triganza says the RBA would pause because we are yet to see the full effect of 12 consecutive rate rises filter into the Australian economy.

In addition, the unemployment rate has remained at 3.7% for August, and central banks globally have all kept rates unchanged this month.

“With these indicators, it’s very likely we’re in for another pause this month, if not the end of rate rises altogether—barring any major black swan event that significantly changes the economic landscape,” said Triganza.

“At this stage, we’re still unlikely to see the RBA make its first rate cut until early-to-mid 2024 as it enters a holding pattern, waiting for the effects of rate hikes to properly filter into the economy and begin to have an impact.”

Triganza instead expects traders to look for the next near-term price mover, for example, the fact that oil is trading way above US$90/bbl will now begin to be a focus.

 

In other markets …

Gold price was down -1.23% to US$1,877.01 an ounce.

Iron ore futures also fell by -0.07% to US$120.84 a tonne.

Base metals prices were mixed with nickel futures rising by +0.9%, and copper futures falling by -0.14%.

The Aussie dollar lost ground further by -0.7% to US63.49c.

Bitcoin meanwhile climbed +0.4% in the last 24 hours to trade at US$26,293.

 

5 ASX small caps to watch today

Cokal Limited (ASX:CKA)
Cokal announced that it has finally received a Jetty Operations Permit associated with the Bumi Barito Mineral metallurgical coal mine (Cokal 60%).

The process of securing this permit led to unanticipated delays in Cokal’s first sale of coal. Cokal will now move forward with the immediate priority of scheduling the maiden shipment of BBM coal at the earliest possible time.

 

Reward Minerals (ASX:RWD)
Reward has evaluated a case for the recovery of 100,000 tpa of high-purity Potassium Sulphate from seawater derived brines via Reward’s new processing technology.

Information from a recent Engineering Scoping Study has determined the technology could potentially provide a robust and highly effective tail-end process that achieves high SOP recovery at low cost compared to existing technologies.

 

James Bay Minerals (ASX:JBY)
Extensive pegmatite outcrop named ‘Avro’ has been discovered at the Aero Property, part of JBY’s La Grande lithium project portfolio in James Bay, Quebec, Canada. The pegmatite is interpreted to be open in all directions, where the outcrop extends under cover. Systematic grab sampling, rock sawing and channel sampling is now underway.

 

MTM Critical Metals (ASX:MTM)
MTM has returned high grade rare earths assay results up to 1.62% (16.200ppm) from diamond drilling at its Pomme REE-Nb Project in Québec, including an interval of 26.5m @ 1.45% TREO and 0.02% Nb2O5.

CEO Lachlan Reynolds said the results from the first three holes confirmed the nearly continuous presence of REE and niobium mineralisation.

 

Noble Helium (ASX:NHE)
Noble reports that rig-up of Marriott Rig #16 at the Mbelele-1 site is approaching the final stages at the company’s North Rukwa Helium Project in Tanzania.

The Marriott Rig #16 “rig-up” is well underway, with the 38 semitrailer loads of rig and associated drilling equipment all onsite, and being assembled in preparation for spudding of Mbelele-1.

 

At Stockhead we tell it like it is. While MTM Critical Metals is a Stockhead advertiser, it did not sponsor this article.

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