• ASX is set to open lower despite modest rise in New York overnight
  • US inflation rose by 0.2% in July, the first increase in 13 readings
  • Aussie house prices to increase by year end, says report

 

Aussie shares are set to open lower on Friday despite a modest rise on Wall Street. At 8am AEST this morning, the ASX 200 index futures was pointing down by -0.25%.

Overnight, traders jumped back on to stocks after the release of the CPI report.

Blue chips Dow Jones index closed +0.15% higher, tech heavy Nasdaq by +0.12%, while the broad S&P 500 rose by +0.03%.

US inflation rose by a tamed 0.2% in July, and 3.2% from a year earlier. This was the first time inflation has risen in the US after 12 straight months of declines, but housing and used car prices have cooled down.

“It doesn’t seem likely that we will see a re-acceleration with prices, given the weakening labor market and as lending takes a hit,” said Oanda analyst, Edward Moya.

“Wall Street remains optimistic that the Fed won’t need to raise rates in September.”

To stock news, Alibaba rose 4% after the Chinese e-commerce giant posted revenue of $234 billion which beat estimates.

Disney rose more 5% as Q3 earnings beat expectations, and after announcing a reduction in capital expense of US$1 billion.

After saying that it was about to go bankrupt, WeWork shares leapt by 43% last night as it became the latest meme stock.

“It’s not at all rational,” said Steve Sosnick, chief strategist at Interactive Brokers.

 

Aussie house to rise by end of 2023 – report

Australian house prices are anticipated to increase between 2% and 5% by the end of 2023.

That’s the call from  REA Group’s latest PropTrack report, based on a prediction that the cash rate is nearing the peak of the rate hiking cycle.

The report projected greater growth in capital cities, where prices are predicted to increase by between 3% to 6%.

“Limited supply of available properties for sale is a key factor contributing to buyer competition and price growth,” said  Cameron Kusher, PropTrack director of economic research.

With the exceptions of Hobart (-3% to -6%) and Darwin (-3% to 0%), other capitals will see growth, says the report.

Perth will likely see the strongest growth, of between 4% to 7%, followed by Sydney and Adelaide (both 3% to 6%), and Brisbane (1% to 4%). Melbourne (-1% to 2%) and Canberra (0% to 3%).

Cameron Kusher , PropTrack director of economic research, however warned that the outlook for 2024 is much less clear.

“Interest rate changes act with a lag, and as such, the possible impact of higher repayments on these borrowers won’t be seen until 2024.

“At this stage, we are forecasting modest price growth in 2024,” said Kusher.

 

In other markets …

Overnight, gold traded lower by -0.12% to US$1,912.07 an ounce.

Crude prices fell almost -2%, with WTI now trading at US$82.89 a barrel.

“Oil has had a nice run up, but some of that was the Russian-Ukraine conflict which has yet to lead to a meaningful disruption of Russian oil shipments,” said Moya.

Iron Ore 62% fe fell modestly by -0.1% to $US104.60/ a tonne.

Bitcoin meanwhile was down -0.2% in the last 24 hours to US$29,435.

US watchdog SEC is about to announce a crucial decision concerning Bitcoin ETFs later today (US time).

Major asset managers of the likes of BlackRock, Bitwise, Van Eck, are currently seeking approval for their respective Bitcoin ETFs.

 

5 ASX small caps to watch today

Noble Helium (ASX:NHE)
Noble is on track to commence drilling its first well at its North Rukwa Project in Tanzania in the second half of September as planned, following the rig’s departure from the UK. Next Stop: Port of Dar es Salaam, arriving early September. Noble says it’s on track for Q3 spud and complete maiden North Rukwa drilling campaign in 2023 dry season.

Halo Food (ASX:HLF)
Halo says that in line with the strategic review being undertaken, it has divested 100% of the share capital of The Healthy Mummy and related subsidiaries to Hairmop, trading as Mosh. Purchase price was $588,540 for 100% of shares, and Mosh will assume all liabilities of The Healthy Mummy.

Loyal Lithium (ASX:LLI)
Drilling assays have confirmed the presence of a mineralised lithium basin at the 100% owned Scotty Lithium Project in the US, with an average grade of 1,120ppm lithium at a 700ppm lithium cut-off-grade. The drilling assays returned significant results, with a peak lithium value of 4,007ppm.

Kelly Partners (ASX:KPG)
The chartered accountants said FY23 group revenue was $86.5m, a 33% increase on the pcp. Underlying NPATA was down -14.2% however to $5.4m. Kelly says this drop is because of the significant investment it has made, which will strengthen the company in the long term.

Genmin (ASX:GEN)
Genmin has signed a non-binding MoU with China’s Hunan Valin Steel to deliver 2.4 million tonnes per annum of Baniaka Green iron ore products for a term of two years. Hunan Valin is a majority state-owned enterprise listed on the Shenzhen Stock Exchange that is ranked within the top 15 global crude steel producers with more than 23,000 employees.

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