• Wall Street rallied after another weak deflationary data
  • Cryptocurrencies also rallied after a landmark judge ruling
  • Analysts believe the US may have pulled off the perfect ‘soft landing


The ASX 200 index is set to extend gains once again and open higher on Friday, tracking movements in New York. At 8am AEST, the ASX 200 index futures was pointing up by +0.5%.

Overnight, the S&P 500 rallied by 0.85% while tech-heavy Nasdaq surged 1.85% as tech stocks led.

US microchip stocks gained with Nvidia’s share price reaching record levels.

Amazon also hit a 10-month high after reporting record sales during its Prime Day sales, along with Google which rose 4.7%.

The rally came as the US PPI, which measures price changes from the perspective of the producer, came in at the slowest pace since 2020.

This comes a day after the US consumer prices (CPI) fell to the lowest pace since 2021.

These deflationary data have sparked FX traders to sell the USD against major currencies, with the greenback now having its worst week since November. The AUD was trading as high as 69c.

Meanwhile, among US companies to report their results last night was Delta Airlines, which fell -0.5% despite posting record quarterly earnings in Q2 and saying that the travel boom is here to stay.

PepsiCo rose 2.4% as it also reported strong growth in revenue and profit on strong sales of Doritos, Cheetos and other snacks.


Stocks to buy in a “soft landing” scenario

Analysts believe the US is now likely to pull off the perfect ‘soft landing’, with the world’s largest economy avoiding a recession as the latest inflation data comes in cooler than expected.

“The US CPI data raises hopes that the Federal Reserve is going to be able to bring down inflation without steering the US economy into a recession,” said Nigel Green of the de Vere Group.

The markets appear to agree. On Wall Street, the S&P 500 and the Nasdaq are now at their highest levels since April 2022.

“Tech, especially areas such as software development, cloud computing, artificial intelligence, cybersecurity, and e-commerce, should do well,” says Green.

“Investments in pharmaceuticals, biotech, medical devices, and healthcare facilities will also be appealing.”

Green added that during periods of economic stability, governments typically focus on infrastructure development.

“Therefore, investments in areas such as construction, transportation, energy, utilities, and telcos infrastructure are likely to get a boost, as will the financial sector.”

However Green said that investors shouldn’t get ahead of themselves, just yet.

“We’re not out of the woods yet, but it is increasingly likely the US economy will not face a full-blown recession this year.”


Cryptos surge on court ruling

Bitcoin has surged by 3.2% in the last 24 hours to US$31,367.

Other cryptocurrencies also rose as US District Judge made a landmark ruling in the case of the SEC vs Ripple Labs.

The judge ruled that XRP, the token related to Ripple Labs and central to the case, is a security when offered to institutional investors, but not the general public.

XRP almost doubled on the news, soaring to US$0.8151.

Experts say the judge’s decision is a huge win for the cryptocurrency and digital asset industry.

“If upheld on appeal, this decision significantly narrows the SEC’s jurisdiction over the crypto market,” said Arthur Jakoby, lawyer at Herrick Feinstein.

Meanwhile, crude oil prices were buoyed by market sentiment and rose by more than 2%, with WTI trading at US$77.28 a barrel.

Iron ore lifted to US$110 a tonne, while gold traded flattish to US$1,960.25 an ounce.


5 ASX small caps to watch today

K2fly (ASX:K2F)
Roy Hill has contracted to implement K2fly’s Ground Disturbance Solution at its integrated iron ore operations in the Pilbara. The five-year contract has a Total Contract Value (TCV) of $2.0m and Annual Recurring Revenue (ARR) of $300k.

Cyclone Metals (ASX:CLE)
Cyclone will sell its non-core gold assets that include: 100% interest in the Nickol River Gold Project tenements in WA, the Longwood Range Gold Copper PGE Project, Mareburn Gold Project, Macraes South Gold Project, Drybread – Waikerikeri Gold Project, and Muirs Gold Project located in NZ. These assets will be sold to BVI, and in aggregate, the sale will provide CLE with $4m of liquid assets.

One Click Group (ASX:1CG)
The fintech company continues its rapid business growth, surpassing 90,000 registered users on its platform. July revenues have already surpassed $1 million as at 12 July, in the start of the busy tax period. Year to date revenue of $1.7m has now exceeded the entire prior full-year revenue of $1.6m.

Nordic Nickel (ASX:NNL)
Multiple wide mineralised zones in latest diamond holes at Hotinvaara Prospect confirmed extensive nickel system with significant growth potential. Latest assay highlights include1: 199.1m @ 0.22% Ni from 20.9m, and 25.3m @ 0.29% Ni from 340m.

Smart Parking (ASX:SPZ)
Smart Parking has acquired 100% of ParkInnovation, a profitable and cash flow positive German parking site management business for $2m. The 46 sites under management provides SPZ with the opportunity to deploy its proprietary technology across the estate.


At Stockhead we tell it like it is. While Cyclone Metals is a Stockhead advertiser, it did not sponsor this article.