Market Highlights: Powell's speech to lift ASX today, and what Tesla's bad quarter signals to investors

ASX to bounce back on Thursday following Jerome Powell’s speech overnight
Powell said the Fed still expects to cut rates this year, but will look to data
And the opportunity Tesla’s sluggish report could bring to investors

After a 1% drop yesterday, the ASX is set to bounce back higher on Thursday. At 8am AEDT, the ASX 200 index futures contract was pointing up by +0.4%.

Overnight, it was a mixed session on Wall Street. The S&P 500 rose by +0.11%, the blue chips Dow Jones index was down by -0.11%, and the tech-heavy Nasdaq lifted by +0.23%.

Traders parsed through comments from Fed Reserve chair, Jerome Powell, who said the central bank still expects to cut rates this year, but added that it has time to assess data before doing so.

“On inflation, it is too soon to say whether the recent readings represent more than just a bump,” Powell told the Stanford University audience overnight.

“We do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 per cent.”

The Nasdaq, which was in red territory, crept up slightly as he spoke.

US energy stocks were one of the best performers last night as crude prices continue to trade higher.

“Energy stocks are playing catch-up and their history points to further near-term gains,” wrote DataTrek co-founders Nicholas Colas and Jessica Rabe.

Ford Motor was up almost 3% after reporting a Q1 sales jump.

Shares of Ulta Beauty, a cosmetics company, got belted by -15% after its CEO said the cosmetics sector’s slowdown was a “bit earlier” and a “bit bigger” than he thought.

Disney shares fell -3% after iconic CEO Bob Iger won a vote of confidence from shareholders who rejected dissident investor Nelson Peltz’s bid for a board seat at the company.

On the ASX today, lots of economic data are due for release including: Australian retail sales, job vacancies, and MI inflation expectations.

Tesla’s bad quarter may bring “buying opportunity”

Yesterday, Tesla reported Q1 vehicle deliveries of just 386,810, a drop of 8.5% from the same quarter last year. This was Tesla’s first YoY decline since 2020.

These latest figures are a warning sign – and an opportunity for investors, predicts the de Vere Group’s CEO, Nigel Green.

“Tesla’s recent sales dip, marking its first year-over-year decline since the onset of the pandemic, serves as a microcosm of broader market trends.

“The drop in demand signals a cautious consumer sentiment, reflective of lingering concerns about inflation, among other factors, which can be expected to trigger market volatility.

“Companies operating in similar sectors, which are based around discretionary spending, including major household names like Apple and Nike, are experiencing similar challenges, with reduced consumer spending impacting their bottom line.”

Investors must therefore adopt a cautious approach, Green adds, and conduct thorough due diligence before making investment decisions.

“Scrutinizing companies’ financial health, fundamentals, market positioning, and resilience to economic headwinds will help identify potential winners and losers.”

Additionally, diversification remains paramount in mitigating risks.

“While Tesla’s subdued performance may signal broader challenges and turbulence, it also presents discerning investors with buying opportunities.

“Market volatility creates openings to acquire high-quality assets at discounted prices, with the potential for substantial long-term gains,” Green said.

In other markets …

Gold price keeps climbing, rising by +0.9% overnight to to US$2,300 an ounce. A high inflation with no interest rate hikes (or cuts) is spurring a rush to cash alternatives like gold.

Oil prices also rose +0.3% overnight, with Brent now trading at US$89.54 a barrel.

The benchmark 10-year US Treasury yield traded flat at 4.36%.

Iron ore futures slipped -3% US$98.55 a tonne.

The Aussie dollar climbed by +0.7% to US65.67c.

Bitcoin meanwhile lifted +0.75% in the last 24 hours to US$65,809.

5 ASX small caps to watch today

Imugene (ASX:IMU)
Imugene has received a Notice of Grant from the Chinese Patent Office, following earlier grants in Japan and South Korea. The granted claims protect its oncolytic virotherapy CF33, including VAXINIA and CHECKvacc. CF33 is a chimeric vaccinia poxvirus from the lab of inventor Professor Yuman Fong at City of Hope, a noted expert in the oncolytic virus field.

Haranga Resources (ASX:HAR)
Initial leach results confirmed >96% uranium extraction, which was achieved under atmospheric leach conditions using sulphuric acid. 84% uranium was extracted using an alkaline atmospheric leach. The diamond core samples were selected to represent the Mineral Resource Estimate grade of 587ppm U3O8 and realised a head grade 14% higher.

Hillgrove Resources (ASX:HGO)
Hillgrove has completed the second copper production campaign from the Kanmantoo underground copper mine. The copper production has ramped up from 239 tonnes in February to 589 tonnes in March. The next two-week milling campaign is underway, with copper sales planned next week. The copper price meanwhile has risen above US$4/lb for the first time since April 2023.

Geopacific Resources (ASX:GPR)
Detailed exploration assessment has identified known mineralisation and priority drill targets, with strong potential to increase the existing 1.56Moz Woodlark Resource. These new target areas are all close to the current resources, and the known mineralisation in each remains open and largely untested.

Pioneer Lithium (ASX:PLN)
Pioneer announced that it has applied for 37 tenements for a total of 73,061ha in Bahia state in Brazil, prospective for rare earths. The newly defined ‘Verde Valor’ Project will complement Pioneer Lithium’s other critical minerals projects, incuding its lithium tenements in Ontario, Canada.

At Stockhead we tell it like it is. While Haranga Resources is a Stockhead advertiser, it did not sponsor this article.