Market Highlights: Wall St momentum, another British PM, and 5 ASX small caps to watch today
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Local shares are set to open higher again on Tuesday, tracking the gains in New York. At 8am AEST, the ASX 200 Dec futures contract was pointing up by 0.40%.
Overnight, Wall St rallied again with all three major benchmarks (S&P 500, Dow Jones and Nasdaq) rising by 1% each.
US stocks have been on the up as momentum builds on calls that the Fed will be tapping the tightening brakes after next week’s policy meeting, and ahead of mega-cap tech earnings.
The five biggest technology companies – Apple, Microsoft, Alphabet, Amazon and Meta – are set to release their quarterly earnings results later this week.
“No one wants to aggressively buy big tech stocks until we hear this week’s big earnings from Apple, Alphabet, and Amazon,” said OANDA analyst Edward Moya.
Meanwhile, US PMIs data released overnight showed significant weakness across both the service and manufacturing parts of the economy.
The flash manufacturing PMI dropped to the weakest levels since mid-2020, which is actually good news for investors expecting the Fed to pause early next year.
“The US economy is making its way to a recession, but it won’t be a steady decline as large parts of the economy still have strength,” Moya said.
US Financial Secretary Janet Yellen assured the market by saying there were no problems with the US financial system, but acknowledged that liquidity and credit concerns are rising amid volatility.
Over in the UK, Rishi Sunak is set to become the next British PM after he got the votes from his Conservative Party colleagues.
The United Kingdom is a great country but we face a profound economic crisis.
That’s why I am standing to be Leader of the Conservative Party and your next Prime Minister.
I want to fix our economy, unite our Party and deliver for our country. pic.twitter.com/BppG9CytAK
— Rishi Sunak (@RishiSunak) October 23, 2022
The $1.3 billion net worth Sunak is married to the heiress of giant Indian IT company Infosys.
In other markets:
– Iron ore rose 0.5% to US$91 a tonne
– Gold was down 0.4% to US$US$1,649.6 an ounce
– Brent crude was flat at US$93.50 a barrel
– Bitcoin fell 0.6% to US$19,365
– AUD tumbled 1% to US63.10c
Later tonight at 7.30pm AEDT, Treasurer Jim Chalmers will deliver his first budget ahead of Wednesday’s release of CPI data.
CBA’s chief economist Stephen Halmarick said he expects the Budget to result in a deficit of approximately $30bn-$40bn, or 1.2%-1.5% of GDP.
Turners Automotive (ASX:TRA)
Turners expects H1 FY23 NPAT to be modestly ahead of H1 FY23’s NPAT of $23.2m. Despite a challenging macro environment, Turners says it has seen an increase in car units sold YoY. The company will announce its official half results on November 22.
In its sportsbooks business, Pointsbet reported an 18% increase in turnover (on pcp) to $1.156 billion for Q1. Its net win rose 4% on pcp to $70.3m. During the quarter, the company continued to make traction in the US where it launched Kansas and Louisiana online sportsbooks, and retail in Maryland. The online sportsbook is now live in 12 US states, while iGaming is live in four states.
EMVision Medical Devices (ASX:EMV)
EMV was awarded $5 million under the Federal Government’s Modern Manufacturing Initiative Medical Products Manufacturing Translation Stream to establish a commercial production of EMVision’s 1st Gen portable brain scanner product. After an initial upfront $2 million payment, subsequent payments are subject to satisfactory progress on the project.
Jindalee Resources (ASX:JRL)
Jindalee has provided an update drilling at its 100% owned McDermitt Lithium Project located in SE Oregon, USA. The company has reported strong intercepts including: 34.5m @ 1609ppm Li from 15.4m, and 23.8m @ 2174 ppm Li from 2.1m.
Red Mountain Mining (ASX:RMX)
RMX has provided an update for its Mt Mansbridge Project located in the Eastern Kimberley region of WA. Assay results from drilling undertaken include: 4m @ 0.496% Total Rare Earth Oxide (TREO) with an average 60.7%, and 3m @ 0.516% Total Rare Earth Oxide (TREO) with an average 65.7%.