• ASX to gain some back after losing -3pc last week
  • Middle East tensions seem to have eased a little following Friday’s strikes by Israel
  • S&P 500 however has been down for 6th day in a row

 

Aussie shares are set to open higher on Monday on signs of cooling tensions in the Middle East. At 8am AEST, the ASX200 futures contract was pointing up by +0.3%.

On Friday, the S&P 500 fell by -0.88%, its sixth straight day of declines. The blue chips Dow Jones index was up by +0.56%, and the tech-heavy Nasdaq slumped by -2.05%.

The decline in Nasdaq was mostly led by mega cap tech stocks.

Nvidia tumbled by -10%, wiping out around US$200bn in market cap. Amazon slipped by -2.5% while Apple fell -1.2%.

Super Micro Computer, provider of computing, storage, and networking solutions crashed -23%.

Tesla lost another -2%, taking its YTD to over -40%, after recalling nearly 4,000 Cybertrucks over a fault with their accelerators that could cause the pedal to jam.

“Sky-high costs for autos — and especially EVs — have dampened consumer demand and extended any timelines for adoption,” said market expert, Hamza Shaban.

Tesla will report its quarterly earnings on Tuesday (US time). Other US companies to report their earnings this week include GE, Lockheed Martin, JetBlue, and Xerox.

Meanwhile, tensions in the Middle East seem to have eased after the International Atomic Energy Agency said there had been no damage to nuclear sites in Iran following Israel’s strikes on Friday. Tehran also said it wasn’t planning any immediate retaliation against Israel.

 

S&P 500 in correction territory?

The benchmark US S&P 500 index has declined in the last six trading days, after reaching all-time highs in March.

While the S&P 500 remains in positive territory for the year, questions surrounding the timing of Fed Reserve interest rate cuts appear to be weighing on investor enthusiasm.

“Investors appear to be resetting their positioning,” says Rob Haworth, senior investment strategy director at US Bank Wealth Management.

“Markets are reacting to recent Fed indications that rate cuts aren’t imminent. Even as the Fed projects three rate cuts in 2024, markets had priced in as many as six,” he added.

Haworth says now it’s possible that no more than one or two rate cuts might occur this year, depending on what economic data emerges.

“What keeps driving markets to new highs are companies that are insensitive to persistently higher interest rates,” Haworth says.

“Large companies like Nvidia, Microsoft, Amazon and Google that hold a lot of cash and have low borrowing needs are not greatly affected by changes to the interest rate environment.”

Utilities and real estate stocks, on the other hand, have suffered as both sectors are interest-rate sensitive.

 

In other markets …

Gold price fell by -0.3% to US$2,384.87 an ounce.

Oil prices also fell -0.3%, with Brent crude now trading at US$87.05 a barrel.

The benchmark 10-year US Treasury yield fell slightly by 1 basis point (bond prices higher) to 4.64%.

The Aussie dollar fell -0.06% to US64.22 cents.

Bitcoin meanwhile was up +0.5% in the last 24 hours to US$65,202.

Bitcoin halving was done on 20th April. This was a significant event where the reward for mining Bitcoin is cut in half, resulting in fewer new Bitcoins generated as a reward for miners.

Halving has made a small difference to the price of BTC this time around, compared to when the first two halvings happened — in 2012 and 2016 — where Bitcoin rose roughly 1,800% and 3,000% respectively within months.

This is because Bitcoin’s current circulating supply of almost 19.7 million coins means that 93% of all coins have been mined, leaving miners to play a smaller role in Bitcoin’s price action.

 

5 ASX small caps to watch today

Infini Resources (ASX:I88)
Infini announced the commencement of field work at its 100% owned Yeelirrie North uranium project, located in WA. The mobilisation of field crews to site follows the staking of additional licences which aggressively expanded the project footprint by 368%. Initial mapping and sampling results are expected over the following weeks.

Great Boulder Resources (ASX:GBR)
Additional air-core (AC) and RC drilling at the Saltbush prospect has defined shallow, high-grade gold mineralisation over a strike length of ~300m. Highlights include: 4m @ 5.96g/t Au from 9m, and 3m @ 6.96g/t Au from 91m. Gold mineralisation appears to be plunging to the northwest, with RC drilling being planned to test this plunge in the next phase of drilling.

Renegade Exploration (ASX:RNX)
Renegade has mapped the continuation of its Mongoose deposit at the Cloncurry Project a further 500m to the west with “Mongoose West”, returning rock sample results of up to 19.45% Cu, and 2.3g/t Au. This information will be evaluated alongside the upcoming processed magnetic data to finalise the RC drill planning.

Rincon Resources (ASX:RCR)
Recently completed detailed ground gravity surveys have outlined multiple new anomaly high targets and enhanced three existing targets in the Pokali IOCG prospect (Arrow, Dune and Surprise). A program of works (POW) for reverse circulation drilling to test all targets has already been approved by the WA Department of Energy, Mines, Industry Regulation and Safety. A heritage clearance survey of new targets has also been submitted to accelerate drilling programs.

Genetic Signatures (ASX:GSS)
Genetic says the TGA has completed the review of its re-designed EasyScreen Respiratory Pathogen Detection Kit, and included the updated device within the ARTG to allow supply within Australia. The company is now ready to commence sale of this product to customers in Australia, ahead of the influenza season.

 

 

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