Market Highlights: Tesla to unveil robotaxi, Morningstar's Q2 prediction, and 5 ASX small caps to watch today

ASX to gain more ground on Tuesday as Wall Street closed flat
Elon Musk revealed Tesla’s robotaxi
A look at Morningstar’s Q2 prediction for the ASX

Aussie shares are set to rise again on Tuesday, even with Wall Street little changed. At 8am AEDT, the ASX 200 index futures contract was pointing up by +0.4%.

Overnight, the S&P 500, the blue chips Dow Jones index, and the tech-heavy Nasdaq all closed flat.

After a strong jobs report helped lift stocks on Friday, US traders mostly stayed on the sidelines last night ahead of the big inflation print this Wednesday.

To stocks, Tesla shares jumped +5% as Elon Musk hyped up Tesla’s robotaxi, revealing on X that it will be unveiled in August.

Musk had earlier said that the robotaxi, cars that operate as fully autonomous taxis, would enter mass production in 2024, but now the timeline is less clear.

“Investors need to curb some of their enthusiasm with this stock and its various product announcements, as there tends to be a wide chasm between hype, speculation and reality,” Adam Crisafulli at Vital Knowledge told Bloomberg.

Boeing fell -1% after an another incident on Sunday that saw an engine cover blow off off a Southwest Airlines’ Boeing 737-800 flight from Denver to Houston. The Federal Aviation Administration is investigating the incident.

Meme stock Trump Media stock slipped another -8%, while Amazon briefly touched its 2021 all-time highs after Morgan Stanley lifted its price target from US$200 to US$215.

Meanwhile Bitcoin was up roughly 3% over the past 24 hours to trade back above US$71,500 at US$71,761 at the time of writing.

Morningstar’s prediction for Q2

Morningstar has just released its Australia and New Zealand Equity Market Outlook report for Q2 2024.

According to Morningstar’s regional director of equities research, Mathew Hodge, the market has so far surprised on the upside, with equity investors looking through the malaise to the green pasture of lower interest rates.

“We see most 4-and 5-star-rated opportunities in energy, healthcare, and real estate. Financial services and technology are two of the most overvalued sectors, and could come under pressure if interest rates don’t fall as much as the market expects,” Hodge said.

Hodge adds that while he sees plenty of tailwinds for the major Australian banks, the market may be too optimistic about interest rates.

“If inflation rears its head again, some of the optimism could come out of share prices for banks and other recent winners, including consumer cyclicals, REITs, and tech stocks.

“Geopolitics and global conflicts, China’s stimulus inflating commodities, and an acceleration in deglobalisation, such as shifting supply chains to domestic or friendly sources, could be triggers.”

In other markets …

Gold price was up +0.35% to US$2,337.39 an ounce.

Oil prices came off another -0.5%, with Brent now trading at US$90.53 a barrel.

The benchmark 10-year US Treasury yield rose by 5bp (bond prices lower) to 4.43%.

Iron ore futures rebounded by +6% as Chinese traders came back from holidays yesterday, to US$104.10 a tonne.

The Aussie dollar lifted by +0.4% to US66.05.

Bitcoin meanwhile rose +3% in the last 24 hours to US$71,761.

5 ASX small caps to watch today

EcoGraf (ASX:EGR)
EGR provide an update on its HFfree proprietary purification technology for producing active anode material tailored for lithium-ion battery and electric vehicle manufacturers. Purification of an unpurified natural spherical graphite (SPG) has now achieved ‘four nines’ known as 4N purity – 99.99% carbon, which exceeds the standard customer industry requirement of 99.95% carbon for natural spherical graphite.

Solstice Minerals (ASX:SLS)
Solstice (80%) and a minority owner (20%) have each entered into a binding Sale and Purchase Agreement with Northern Star (Carosue Dam) to sell 100% of the Hobbes Exploration Licence for total consideration of $12.5 million. The licence contains the Hobbes Gold Deposit, and is located near Northern Star ‘s open-pit and underground gold mines at Porphyry, and proximal to its Carosue Dam production hub.

Helix Resources (ASX:HLX)
A new 1,200m Induced Polarisation geophysics anomaly has been identified, in addition to the two recently identified IP anomalies west of the Canbelego Main Lode Resource, highlighting exciting potential to increase the existing copper Mineral Resource. A new gradient array induced polarisation survey has identified a highly prospective +1,200m conductive zone, extending north of Canbelego coincident with surface copper geochemical anomalism.

Lincoln Minerals (ASX:LML)
Historic uranium drilling has intercepted up to 570 ppm uranium prospectivity across Lincoln’s Eyre Peninsula tenements. The Lincoln review revealed highly prospective uranium targets over four target regions across its existing tenement portfolio on Eyre Peninsula, South Australia.

Evergreen Lithium (ASX:EG1)
Evergreen’s final Phase 3 geochemical sample results continues to build on positive results at Central Bynoe. Assay results from 1,174 soil samples received reflect similar large-scale lithium trends to those previously identified. Additional large scale lithium pegmatite targets have also been identified.