• The ASX is set to edge higher on Monday
  • US Energy stocks lifted, while mega tech stocks fell
  • Goldman cut US recession probability to just 15%


Australian shares are set to edge higher on Monday after US stocks closed slightly up on Friday. At 8am AEST, the ASX 200 index futures was pointing up by +0.1%.

In New York, the S&P 500 rose by +014%, blue chips Dow Jones up by +0.22%, and tech heavy Nasdaq by +0.09%.

Energy stocks lifted once again as crude prices continue to see upward pressure following Saudi Arabia and Russia’s announcement of extended supply cuts.

Megacap stocks mainly fell and Block Inc slipped 5% as the company grappled with a systems outage.

Apple steadied ahead of its iPhone 15 release later this week and a potential response regarding Chinese moves to ban iPhone use within the government.

Meme stock Gamestop was also down -6% after it was revealed that US SEC was investigating the video game retailer’s chairman, Ryan Cohen.

To economic news, consumer credit in the US increased by US$10.4 billion in July vs an expected US$16 billion, the second-smallest monthly increase since November 2020.

Looking ahead this week, the US will release the all crucial CPI data on Wednesday (US time), and back home, the ABS will publish the unemployment rate on Thursday.

Now read: Traders’ Diary: Will the ASX become a correctional facility over the next few weeks?


Goldman Sachs cuts recession odds to just 15%

Goldman Sachs has just updated its probability of a US recession, lowering the likelihood to only 15% from the previous call of 20%.

The report, titled “Soft Landing Summer“, painted some encouraging predictions on inflation and the jobs market. The bank suggests the US economy will avoid the Fed-fueled recession that many had feared.

Jan Hatzius, Goldman’s chief US economist, said in the report that the impact from the Fed’s tightening would not be seen next year.

“We think the drag from monetary policy tightening will continue to diminish, before vanishing entirely by early 2024,” Hatzius said.

Hatzius added the US economy is no more likely to go into a recession than it is in any given year, adding that historically, the US has had a recession every seven years since WW2.


In other markets …

Shorter-dated US government bond yields rose after Fed Bank of New York President John Williams said economic data will decide on how the Fed willl proceed on interest rates.

Gold was trading flat to US$1,918 an ounce.

Most base metal prices slipped on Friday, with copper futures dipping by 3.5% last week, their biggest loss in a month. Aluminium futures were also down 3% for the week.

Crude prices jumped another 1%, with Brent now trading at US$90.40 a barrel.

Iron ore futures slid -0.4% to US$116.9 a tonne.

The Aussie dollar climbed from US63.80c to US63.91c, and may come under more pressure if the unemployment rate on Thursday rises more than expected.

Bitcoin meanwhile traded flat at US$25,967 in the last 24 hours.


5 ASX small caps to watch today

Cirrus Networks (ASX:CNW) and Atturra (ASX:ATA)
IT companies Cirrus and Atturra have entered into a Scheme Implementation Deed under which Atturra will acquire 100% of Cirrus for 5.3 cents per share. The price represents a 29.3% premium to the Cirrus closing price of 4.1 cents on 8 September. Cirrus’ board unanimously recommends that Cirrus shareholders vote in favour of the scheme.

Intra Energy (ASX:IEC)
Yalgarra Project review has confirmed two areas with significant lithium soil anomalism associated with coincident low-level cesium, tantalum, niobium beryllium and tin anomalism. On-ground exploration is now scheduled to commence immediately.

Genetic Technologies (ASX:GTG)
GTG says that its expanded geneType Multi-Risk Test is now available to order in Australia. The three new diseases – pancreatic cancer, melanoma, and atrial fibrillation – were approved for sale in Australia by the National Association of Testing Authority (NATA).The geneType Multi-Risk Test now performs a total of nine individual serious disease risk assessments, all from the one simple saliva sample.

Mayfield Group (ASX:MYG)
Mayfield announced total new orders of $21.2m across its subsidiaries for FY24 to date. These new orders cover both electrical and telecommunications infrastructure with a spread of end-use applications. Of particular significance are new contracts supporting projects in the developing lithium and hydrogen production sectors, and data centres supporting the digital economy.

Eden Innovations (ASX:EDE)
Eden has upgraded its global sales forecasts as the company pushes towards positive cash flow near term. Global sales target for all Eden’s products for FY24 is $5.3 million. If FY24 global sales revenue increased by 20% compared with FY23, Eden said it would be very close to achieving a positive cashflow from sales alone.