Market Highlights: Oil’s big fall, Walmart and Alibaba crash, and 5 small caps to watch today
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Aussie shares are poised to open lower on Friday after a mixed session on Wall Street. At 8am AEDT, the ASX 200 index futures was pointing down by -0.2%.
In New York, the S&P 500 rose by +0.12%, the blue chips Dow Jones index was down by -0.13%, and the tech-heavy Nasdaq climbed by +0.07%.
The focus was on oil where crude prices suffered further losses, down by almost 5%.
Current oil prices are now roughly 22% lower than September’s 2023 highs, amid concerns of a Chinese demand slowdown, and after US data this week showed inventories were abundant.
Meanwhile Wall Street’s VIX index, which measures the market’t fear factor, sat near a two-month low of 14.01.
To stocks, Walmart tumbled -8% after its guidance outlook came in slightly less than expected. The retailer however reported quarterly earnings that topped estimates.
Another retailer, Macy’s, rose 6% after reporting an improvement in margins.
Alibaba crashed 9% after Jack Ma’s family reportedly plans to sell down shares in the company. Alibaba’s Q2 revenue however came in line with analysts’ estimate.
Almost all Chinese stocks listed in New York fell as traders assessed a possible fallout from President Biden’s remarks in which he called visiting Chinese President Xi a “dictator”.
The biggest mover last night was Cisco, which plunged 11% after cutting its full year guidance, citing a slowdown in product orders.
As we approach the tail end of 2023, the question we now ask ourselves is: Is 2024 going to be nice to investors, or will we be faced with another period of market consternation?
Piers Bolger, chief investment officer of Infinity Capital Solutions, says geopolitical risks will have big impacts on inflation and interest rates in 2024, which will in turn continue to impact financial markets.
“In 2024, our main focus will be on the move in cash rates, inflationary expectations, and bond yield trends — they’re poised to make the most significant impact to wider financial markets,” he said.
However, central banks are nearing the end of rate tightening, which is great news for asset classes like stocks, bonds, property, and real assets in 2024.
“We believe therefore, in 2024, diversified investment portfolios can once more yield strong performance with reduced risk compared to past investment cycles,” Bolger said.
He warns that in Australia, while inflation remains above that of many other developed economies as well as the RBA’s target band, the potential for further rate hikes remains.
“So while we believe that 2024 could provide investors with several ‘treats’, we are not so naïve to think it will not be a tricky environment.
“Risks continue to abound on multiple levels and with a US election thrown into the mix in November, it will bring its own set of challenges for investors to navigate,” said Bolger.
Gold price climbed +1.2% to US$1,981.05 an ounce.
The benchmark US 10-year treasury yield fell further, down 9bp to 4.43%.
Oil prices were down almost -5%, with Brent trading at US$77.63 a barrel.
Iron ore futures was up 0.13% to US$129.42 a tonne.
The Aussie dollar is back below the US65c handle, trading -0.7% lower to US64.67c.
Meanwhile, Bitcoin fell -4.25% in the last 24 hours to US$35,957.
The specialist marine propulsion maker said its VG140SD VEEM Gyro will now be fitted as standard on STrategic Marine’s fourth-generation fast crew boat (FCB) due to improved stabilisation. As a consequence of this decision, Strategic Marine has accelerated the delivery dates for the 12 gyrostabilisers that it ordered under the exclusivity agreement with Veem in June. Due to this acceleration, Veem expects to report revenue from gyrostabilisers in excess of $10 million for FY24 – double that of FY23.
Battery Age Minerals (ASX:BM8)
BM8 has received approval from Ontario Ministry of Mines for the drilling permit application for its Phase II drilling programme at the Falcon Lake Lithium Project in Canada. The permit has an allowance for 135 drill pads. Hole depth will vary from 50m to 200m, giving an approximate range of total drilled metres from 10,000 to 20,000m.
Adelong Gold (ASX:ADG)
Adelong says that the third Brazilian licence has now been granted for the Santa Rita Do Araçuaí Project. This follows on from the company’s announcement on 30 October, that the initial two exploration permits had been granted. Initial exploration is now planned to start in December.
Estrella Resources (ASX:ESR)
Estrella has now gained further detailed information to develop precise drill targets to unlock further nickel sulphide deposits at the Carr Boyd project in WA. Processing of the helicopter-borne Audio-Frequency-Magnetic survey continues to identify areas prospective for nickel sulphides.
Strike Energy (ASX:STX)
Strike has secured foundation firm gas sales agreements for a total of ~42 PJ covering ~60% of estimated daily production, which will underpin the development of the proposed 100% owned South Erregulla in the Perth Basin. The agreements are with tier-1 customers and include: sales agreement for 35.5 PJ of gas to the Worsley Alumina Joint Venture (operated by South32) for a period of five years. And also, a sales agreement for 5.475 PJ of gas to Perth Energy (AGL) for a period of three years.
At Stockhead we tell it like it is. While Battery Age Minerals is a Stockhead advertiser, it did not sponsor this article.