Market Highlights: UFC to merge with WWE in a $21bn deal; the all-crucial RBA rates decision later today
Aussie shares could lift modestly higher on Tuesday after a mixed session in New York. At 8am AEST, the April futures contract was pointing up by just 0.1%.
Overnight, the S&P 500 closed 0.37% higher, the Dow rose by 0.98%, while tech-heavy Nasdaq slipped 0.27%.
Energy stocks expectedly paced US stocks after the surge in the price of oil driven by OPEC’s shock decision over the weekend to cut supply.
After climbing 8% on Friday, crude prices climbed another 6.5% again last night, with the WTI now trading at US$80.44 a barrel.
Surging oil prices are likely to mean higher interest rates for longer, as the price rally adds to inflationary pressures.
“This current macro backdrop isn’t conducive for a meaningful stock market rally,” said Oanda analyst, Edward Moya.
“The economy is recession bound as the consumer is clearly weakening, lending is about to get ugly, energy cost uncertainty will remain elevated for a while, and monetary policy is finally restrictive and about to break parts of the economy.”
Shares of energy stock Exxon Mobil Corp, Occidental, and Chevron Corp rose by around 4-5%.
Tesla dropped by 6% despite announcing record first quarter deliveries following price cuts. Tesla delivered more than 422,000 cars in Q1, and made more than 440,000 new vehicles up to March 31.
Parent company of the UFC, Endeavor Group (NYSE:EDR), announced a deal to merge with World Wrestling Entertainment (WWE) to form a new listed company that will trade under the ticker “TKO”.
TKO is expected to have a market cap of US$21 billion, and Endeavor will own 51% while WWE will hold 49%.
WWE founder Vince McMahon will serve as exec chairman of the new company.
— Conor McGregor (@TheNotoriousMMA) April 2, 2023
Elon Musk meanwhile has escalated his vendetta against the New York Times.
Twitter removed the NYT’s blue check mark after the paper refused to pay the verification fee. The NYT is the 24th most-followed account on Twitter with 55 million followers.
Musk had blasted a NYT article last December which claimed there was an unprecedented rise in hate speech on Twitter, saying that the piece was “utterly false”.
In other markets, spot gold price rose 1% to US$1,984.28 an ounce.
Bitcoin was down almost 2% in the last 24 hours to US$27,591.
Dogecoin jumped 20% after Twitter changed its logo to an image of a shiba inu dog, the digital coin’s symbol.
Spot iron ore fell 3% to $US121.30 a tonne.
Treasury yields gave up all their OPEC+ output cut gains after data showed that US factory activity plunged. The 10-year Treasury yield fell 6bp to to 3.4%.
FOMC member James Bullard delivered his standard hawkish comments last night. Bullard said that the Fed needs rates above 5% and that his forecast is above the median.
Back home, the RBA is also set to deliver its interest rates decision at 2.30pm AEST today.
The decision looms as arguably the most hotly contested rate decision of the RBA’s hiking cycle. Last week’s weaker-than-expected inflation reading of 6.8% has market participants split over what the RBA will do – pause or raise interest rates again.
“I would anticipate another hike in April before the RBA looks to pause its rate hiking cycle in May,” said Josh Gilbert, a market analyst at eToro.
Other experts like Frank Uhlenbruch, an investment strategist at Janus Henderson, reckons the RBA could pause rates, starting today.
“With much of the heavy lifting already done and banking sector sentiment still skittish, we suspect the RBA will be inclined to take the pragmatic path and leave monetary settings unchanged in April,” said Uhlenbruch.
Mineral Commodities (ASX:MRC)
MRC’s 50% owned subsidiary, Mineral Sands Resources, has significantly upgraded its overall Inland Strands reserves by 177% (41% increase in contained heavy mineral), and its Inland Strands reserves within its current Expanded Mining Right by 181% (57% increase in contained heavy mineral).
Infinity Mining (ASX:IMI)
Infinity completed a 37-hole reverse circulation (RC) drilling program in early March in the Central Goldfields of WA. Gold assay results include: 7m @ 1.96g/t Au, from 32m depth in hole VB23RC004, and 6m @ 1.40g/t Au, from 25m depth in hole VB23RC005.
Artemis Resources (ASX:ARV)
Elevated gold in soils with assay results up to 101.3ppb gold have been defined at the Titan gold prospect over an area of 750m by 550m, some 1.8km northeast of the Carlow Mineral Resource. Gold anomaly corresponds with elevated arsenic over a similar area. JORC Exploration Target for Carlow Castle and exploration strategy within Greater Carlow are to be finalised for release by mid-April.
Cavalier Resources (ASX:CVR)
Cavalier will undergo internal high-level studies to explore the potential for the oxide portion of the Crawford Gold resource, to be extracted and processed via heap leach processing. The company is furthering studies into the potential for processing onsite as an owner-operator. Heads of Agreement has been signed with Blue Cap Mining to assist with heap leach mining studies, and to potentially conduct the development and mining work for any test pits.
FOS Capital (ASX:FOS)
FOS has achieved another solid quarter with sales of $4.2m, bringing YTD sales to $12.9m – an increase of 37% on pcp. The company said the commercial construction industry remains robust as reflected by its improved quote pipeline. FOS will continue the cost and product rationalisation program stemming from the Hawko acquisition, which will result in further margin improvements.