• Shares to rise after Wall Street retreated overnight
  • US retail stocks edged higher ahead of Cyber Monday sales results
  • Narrative for 2024 is looking good, says expert

 

Aussie shares are poised to edge higher on Tuesday as Wall Street retreated modestly overnight. At 8am AEDT, the ASX 200 index futures was pointing up by +0.1%.

In New York, the S&P 500 fell by -0.2%, the blue chips Dow Jones index was down by -0.16%, and the tech-heavy Nasdaq fell by -0.07%.

The downbeat session comes after three major US indexes booked their fourth straight weekly win on Friday, and remained on track to record their best month this year.

The VIX, also called Wall Street’s fear gauge, is at its lowest level since January 2020.

Investors are monitoring the results of yesterday’s Cyber Monday sales in the US to gain insights into whether Americans are still spending despite tighter purse strings.

Shares of giant retailers Amazon.com and Walmart edged up around half a per cent each.

GE HealthCare lost 3.5% after UBS downgraded the medical devices maker to “sell” from “neutral”.

The biggest mover was buy now, pay later (BNPL) firm Affirm, which surged 12% after Adobe Analytics released a report that said BNPL purchases in the US accounted for around US$7.3 billion in online spending from Nov 1 to Nov 26, up 14% year over year.

Meanwhile, a fresh reading on the US PCE (personal consumption expenditures) inflation due this Thursday could  put the rally to the test. The PCE looks at US inflation by measuring changes in the cost of living for households, and is the Fed’s favourite inflation indicator.

Back home in Australia, all eyes today will be on October’s retail sales data.

 

An optimistic 2024 lies ahead

The narrative for 2024 is shaping up to be a year with easing financial conditions, namely lower bond yields (bond prices higher) and rising equities.

That’s the view from  Jim Caron, chief investment officer Portfolio Solutions Morgan Stanley Investment Management, who said that it’s time for the broad financial markets to make a comeback.

He believes global equities may return in the 5-7% area next year as a soft-landing/no-recession call is becoming more mainstream.

“Right now, investors are fundamentally in better shape than last year,” Caron said in a podcast.

“It is now more reasonable to ‘call off the dogs’ who warned of an economic collapse and find some middle ground.”

Caron however believes that at the core, many analysts are still bearish and may flip the narrative quickly at the first signs of economic stress.

“So as we look for returns in 2024, it won’t come easy in 2024.

“The path may be very volatile and filled with surprises along the way. This means we are likely to see both great buying and selling opportunities, and this may provide chances to perform better than what 2024 may actually deliver.

“If interest rates have peaked, then owning stable cash flows will be more highly valued. The starting yield in bonds is much more attractive and provides a greater cushion than a year ago.

“I am still optimistic on the outcome for returns in the year ahead. Investors should start with a well-balanced portfolio and actively manage the risks and opportunities,” said Caron.

 

In other markets …

Gold price keeps climbing, up another 0.6% to US$2,014.33 an ounce. Bullion has been rising on the back of a weaker US dollar.

Oil prices fell -0.75%, with Brent now trading at US$79.95 a barrel ahead of the OPEC+ meeting on November 30.

Iron ore futures rose 0.2% to US$130.42 a tonne.

The Aussie dollar regained the 66c handle, up +0.35% to US66.06c. The monthly local CPI print this Wednesday could impact both equities and AUD.

Meanwhile, Bitcoin was down -1.5% in the last 24 hours to US$36,991.

 

5 ASX small caps to watch today

Plenti Group (ASX:PLT)
The non-bank lender provided its results for the six-month period ended 30 September. Closing loan portfolio for H1 was $2.0 billion, up 29% on pcp. Loan originations were $624 million, up 12% on pcp. Half-year revenue was $97 million, up 52% on pcp. Cash NPAT was $1.5 million, up 10% on pcp. The company had a strong credit performance in the half, with a 0.99% net loss rate.

Gentrack Group (ASX:GTK)
The software solutions provider for utilities and airports reported its full year results for FY23. Revenue was $169.9m, up 34.5% on FY22. EBITDA was $23.2m, up $15.1m over FY22. Statutory NPAT was $10.0m profit vs $3.3m loss in FY22. Cash in hand as at September 30th was $49.2m, up $21.8m over FY22. No dividend was paid. FY24 revenue guidance has been upgraded to c. $170m (from previous guidance of $157m to $160m for FY24).

Meeka Metals (ASX:MEK)
Meeka is pressing to finalise the development ready status of the 100% owned 1.2Moz Murchison Gold Project in early 2024. High grade assay results have been returned from a further 11 infill drill holes at Turnberry (685,000oz @ 2.0g/t Au), part of the Murchison Project. New high grade oxide gold intersections include: 19m @ 8.75g/t Au from 48m, and 5m @ 1.91g/t Au from 70m.

InteliCare (ASX:ICR)
InteliCare announced it has executed a non-binding Memorandum of Understanding (MoU) with Bolton Clarke as a precursor to a Strategic Partnership Agreement. Bolton Clarke is Australia’s largest independent not-for-profit aged care provider. Under the deal, the two parties will work together to implement InteliCare into to-be-identified Bolton Clarke sites/services as pilot projects to assess InteliCare within the Bolton Clarke operating environment. Under these pilots, Bolton Clarke’s capability will be used to assess and identify areas of possible enhancement to InteliCare.

Biome Australia (ASX:BIO)
The probiotics specialist has surpassed $5m sales revenue for the first five months of the financial year FY24, representing 70% growth versus the pcp. Strong momentum in sales revenue growth continues from FY23 ($7.23m full year). Biome says it remains on track to deliver its FY24 revenue guidance of $11.5m.

 

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

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