US GDP grew by 3pc in Q2, supporting steady Fed rate plans. Pic: Getty Images
Market Highlights: US GDP boosts market confidence, and 5 ASX small caps to watch today
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- ASX set to rise on Friday, tracking Wall Street’s mixed performance
- US GDP grew by 3pc in Q2, supporting steady Fed rate plans
- Dollar General’s shares plunged 32pc
Aussie shares are set to rise after Wall Street trimmed earlier gains as the session wore on. At 8am AEST, the SPI ASX 200 futures contract was pointing up by 0.6%.
Overnight, the S&P 500 closed flat, the blue chips Dow Jones was up 0.59%, and the tech heavy Nasdaq slipped by 0.23%.
The S&P 500’s rally lost momentum as Nvidia Corp continued its decline, falling by over 6%.
But supported by GDP data showing the US economy is holding up, the majority of sectors in the benchmark index saw gains.
Thursday’s data revealed that US GDP expanded at an annualised rate of 3% in Q2, higher than the 2.8% rate reported last month and the 1.4% recorded in Q1.
“There was nothing here to make the Fed rethink its plan to cut rates next month,” said Chris Larkin at E*Trade.
To stocks, Tech was weighed down by the chipmakers, but five out of the “Magnificent Seven” megacaps rose.
Lululemon Athletica jumped 5% despite lowering its sales and profit forecast for the year, as rising competition and persistent inflation are dampening demand for its pricey yoga pants.
Dollar General Inc plunged 32% to its lowest ever level after the discount retailer revised its full-year sales forecast downward. The CEO said that customers are now reducing their spending on essential items due to years of rising household costs.
Meanwhile in Europe, Germany’s DAX index temporarily hit a record high of 18,892.92 points during early trading in Frankfurt.
And back home, earnings season continues with Star Entertainment, Appen, and Dicker Data among the companies set to release their results today.
Highlights from ASX earnings season
Mathew Hodge, Director of Equity Research at Morningstar, has released his latest assessment on the ASX reporting season.
Key themes emerging this season include BHP’s modest profit growth, which was driven by higher prices. However, the near-term outlook is challenging due to inflation, a soft iron ore market, and increased investment.
Fortescue also saw a boost in profit from higher prices and reduced discounts on its ore, but its future earnings are expected to be lower due to its significant exposure in China.
Whitehaven’s profit dropped due to lower coal prices, and its near-term guidance on volumes and costs is weak. Nevertheless, Morningstar views the sale of a stake in Blackwater as a positive for the company’s value.
Woolworths reported a soft profit performance, impacted by rising wages, high energy costs, and increased rents. Despite this, its shares appear expensive given the relatively modest growth forecast, said Hodge.
Coles, on the other hand, saw strong profit growth, aided by reduced theft thanks to new technology. Like Woolworths, however, its shares seem overpriced in light of the steady growth outlook.
Back to markets …
Gold price rose by 0.5% to US$2,521.67 an ounce.
Oil prices climbed by almost 2%, with Brent crude now trading at US$79.77 a barrel.
The benchmark 10-year US Treasury yield lifted 2 basis points (bond prices lower) to 3.86%.
The Aussie dollar lifted by 0.2% to US68 cents.
Bitcoin meanwhile rose slightly by 0.5% in the last 24 hours to US$59,190 and Ethereum was up 0.2% to US$2,524.
5 ASX small caps to watch today
PYC Therapeutics (ASX:PYC)
The FDA has granted PYC a Rare Pediatric Disease designation for its drug candidate, PYC-001, which is designed to treat vision loss linked to mutations in the OPA1 gene.As a result, PYC may receive a Priority Review Voucher if PYC-001 is approved. PYC-001 is a drug candidate aimed at treating Autosomal Dominant Optic Atrophy (ADOA), a severe eye condition. The company recently received approval to begin human trials of PYC-001 and plans to start a Phase 1 Single Ascending Dose study soon.
Civmec (ASX:CVL)
The engineering services company reported record revenue of $1.03 billion for the full year, a 24.4% increase, and an EBITDA of $120.8 million, up 10.7%. Net profit after tax rose to $64.4 million, an 11.6% increase, and earnings per share grew to 12.7 cents. The company proposed a final dividend of 3.5 cents, totalling 6.0 cents for the year, a 20% rise from FY23.
Anatara Lifesciences (ASX:ANR)
Anatara eported positive progress for Stage 2 of its pivotal GaRP-IBS (Irritable Bowel Syndrome) clinical trial. Recruitment is going well, with 30 participants already enrolled and around 20 more being screened for suitability. To enhance the trial’s reach, two new sites will soon be added in Adelaide and on the Sunshine Coast, with recruitment expected to start in early September after ethics approval. Interest remains high at existing sites in Melbourne, Sydney, and Brisbane, where a satisfactory number of eligible candidates are being considered. Over 1,400 people have expressed interest so far, and a similar level of engagement is anticipated at the new locations.
Count (ASX:CUP)
The financial services company reported a 22% increase in full year revenue to $111.80 million, up from $91.48 million in FY23, driven by both organic growth and acquisitions. Underlying EBITA grew by 61% to $16.63 million. The company completed 15 acquisitions during the year, including Diverger, and made significant progress in integrating it with expected annualised cost synergies of at least $4 million. A final dividend of 2.25 cents per share was declared, bringing the total FY224 dividend to 3.75 cents, fully franked.
Scorpion Minerals (ASX:SCN)
Scorpion is advancing its gold exploration at the Pharos Project in Western Australia. The project, located 60 km northwest of Cue, has shown high-grade gold potential from previous drilling, including significant intersections at the Lantern, CapLamp, and Candle North prospects. Exploration will focus on follow-up drilling and testing of previously identified targets. Upcoming activities include geological mapping, soil sampling, and drilling to further evaluate these gold prospects.
At Stockhead we tell it like it is. While Scorpion Minerals is a Stockhead advertiser, it did not sponsor this article.
