Market Highlights: US mega tech stocks crumble on earnings; oil stocks on watch as crude jumps 3pc

ASX set to open lower after Wall Street tech stocks slump
Amazon soars on strong holiday sales forecast
Roblox and Peloton shares surge while Robinhood drops

The ASX is set to fall when the market resumes on Friday after a very rough day on Wall Street. At 8am AEST, the S&P/ASX 200 futures were suggesting it will open down about 0.6%.

Overnight, the S&P 500 closed 1.86% lower, the blue-chips Dow Jones was down by 0.9%, and the tech-heavy Nasdaq crumbled by -2.76%.

The Volatility or Fear Gauge spiked, reaching a three-month high with the VIX up 14%.

The Nasdaq was brought down by a sell-off in major tech stocks following disappointing earnings reports from some of these names…

Microsoft, Nvidia, and Meta were down between 4-6%, dragging the NYSE Fang+ Index down by 3%.

Amazon, however, surged by 4.5% in extended trading after forecasting strong sales and profits this holiday season, beating analysts’ expectations. The company expects operating income between $US16 billion and $US20 billion for the upcoming quarter. Analysts had estimated around $US17.5 billion.

Amazon’s CEO Andy Jassy is banking big on generative AI, investing heavily in new data centres to keep up with demand, even as some investors worry about when the returns will start rolling in.

Apple slipped 2% despite exceeding expectations in its latest quarter on the back of solid early sales of the iPhone 16. Apple reported sales of $US94.93 billion, just ahead of Wall Street’s estimates. CEO Tim Cook said iPhone 16 sales are off to a better start compared to the previous model.

Intel fell 3.5% but surged by 8.5% in extended trading after it forecasted Q4 revenues slightly above analysts’ expectations, and said it was on track to reclaim some lost ground in the market.

“Investors need to make sure they have diversification within tech, and that they are not solely invested in the parts of the AI trade that have worked such as semiconductors,” said Michael Landsberg at Landsberg Bennett Private Wealth.

“It makes some sense to trim some from those names that have worked so well over the past 12-18 months and look for AI laggards as well as other tech themes like cybersecurity, robotics and automation, and smart homes and cities,” he added.

Roblox Corp surged by 20% as the video game company announced Q3 bookings that exceeded analysts’ expectations and raised its full-year guidance.

Peloton Interactive shares surged 28% after the fitness company appointed Peter Stern, a Ford Motor Co. executive, as its new CEO.

And Robinhood Markets slumped 16% after the brokerage reported revenue that fell short of analysts’ expectations.

Meanwhile, oil prices surged 3% following reports that Iran is preparing a new attack on Israel in the next few days.

Morningstar’s two stock tips

Morningstar equity market strategist Lochlan Halloway has called out a couple of ASX-listed stocks he thinks might fare better in a world of heightened geopolitical tensions and deglobalisation.

One example is Iluka Resources (ASX:ILU), Lochlan said, which is currently trading at nearly a 40% discount to fair value. A Trump victory could lead to a quicker push in the West to reduce dependence on China.

James Hardie (ASX:JHX) is another potential beneficiary, well-positioned with a largely US-based supply chain. Competing materials such as vinyl- and wood-composite siding are often imported, and higher prices for these alternatives could boost prices and/or volumes for James Hardie.

“It’s easy to make sweeping assumptions about how a new president might reshape the world order. And given the broad suite of policies Trump has toyed with, speculation has been nearly endless,” writes Lochlan.

But more broadly, if the market gets caught up in the noisy near-term and loses sight of the long view, this can present opportunities, he said.

“Build a list of interesting companies, have a view on reasonable prices, and be prepared to act if the market diverges meaningfully from fair value.”

In other markets …

All prices at 8.30am AEST.

Gold price retreated by 1.5% from record highs to US$2,743.72 an ounce.

Oil prices climbed by almost 3%, with Brent crude now trading at US$74.09 a barrel.

The benchmark 10-year US Treasury yield fell by 1 basis points (bond prices higher) to 4.29%.

The Aussie dollar traded flat at US65.82 cents.

Bitcoin fell by 3% in the last 24 hours to US$70,211, while Ethereum plunged by 5% to US$2,517.

Meanwhile, iron ore traded flattish at $US103.80 a tonne.

5 ASX small caps to watch today

Catalina Resources (ASX:CTN)
Catalina announced promising assay results from its Laverton Project, including a gold intersection of 44 metres at 1.01 grams per tonne (g/t) from hole LVAC049, with highlights of 4 metres at 2.22 g/t. These results confirm previous successes and indicate a broad mineralised zone trending north-northwest. The company plans further drilling to explore this zone at greater depths. The Laverton Gold Province is known for its rich deposits. More detailed assay results will be released in the coming weeks.

Dimerix (ASX:DXB)
Dimerix has teamed up with the University of Michigan’s Neptune Match study to enhance recruitment for its Action3 Phase 3 trial in the US. This collaboration will provide a new source of patient referrals and assist in biomarker profiling to identify patients with focal segmental glomerulosclerosis (FSGS) who may benefit from treatment with DMX-200. The Action3 trial aims to recruit around 286 patients globally. An interim analysis is expected after the first 144 patients complete 35 weeks of treatment, likely around mid-2025.

Yandal Resources (ASX:YRL)
Yandal said RC drilling has started at the Siona gold discovery, with a programme of 12 holes over 2,500 metres aimed at confirming the mineralisation’s geometry and extent. This drilling will test both up and down dip of previous intercepts, including 78 metres at 1.2 g/t Au and 14 metres at 1.8 g/t Au. The remaining holes will focus on extending the mineralised system to the northwest and southeast. The programme is expected to take about two weeks, with initial results anticipated by mid to late November.

Astral Resources (ASX:AAR)
Astral announced an increase in its gold mineral resource to 1.46 million ounces following an updated Mineral Resource Estimate (MRE) for the Feysville Gold Project. This includes new MREs for the Kamperman and Rogan Josh deposits, along with an updated estimate for the Think Big deposit, totalling 196,000 ounces at a grade of 1.2 g/t Au. The Feysville MRE, located 14 km south of Kalgoorlie, is based on 5.0 million tonnes at 1.2 g/t Au, using a lower cut-off of 0.39 g/t Au. Astral notes the mineralisation was discovered at a cost of about $19 per ounce, significantly lower than its peers.

Capstone Copper Corp (ASX:CSC)
Capstone reported strong Q3 results for 2024, with copper production of 47,460 tonnes and a net income of $12.5 million. The Mantoverde Development Project achieved commercial production, and the company expects Q4 to be its strongest quarter. But Capstone anticipates full-year production at the low end of its guidance, with revised cash costs of $2.60 to $2.80 per pound. Also, the company released a feasibility study for the Santo Domingo project, highlighting significant growth potential.

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