Bofa says fundies have moved to long US, short emerging markets. Picture Getty
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Australian shares are set to open lower on Wednesday after a tech selloff in New York overnight. At 8am AEST, the ASX 200 index futures was pointing down by -0.3%.
In New York, the S&P 500 fell by -0.57%, blue chips Dow Jones by -0.05%, and tech heavy Nasdaq by -1.14%.
Apple dropped almost 2% after unveiling its iPhone 15 and other products.
Oracle Corp sank by -13.5%, the biggest one day fall since 2002, after the company’s Q1 earnings fell flat compared to its AI expectations.
US-traded BP shares slid 1% after CEO Bernard Looney resigned effective immediately, citing that he was not “fully transparent in his previous disclosures” about relationships with colleagues prior to becoming CEO.
And the long awaited Arm IPO is almost here, which will value the company upon listing around US$54.5 billion.
German shoe manufacturer Birkenstock has also filed for an IPO, which could value the company at over US$6 billion.
Bank of America (BofA)’s latest global fund manager survey showed a “dramatic shift” in investors’ equity allocation.
BofA said there is a rush toward the US markets, and an exodus from emerging markets.
The report said the “avoid China” theme has become one of the biggest convictions among the surveyed investors as Chinese real estate is now seen as the number one source for the next global credit event.
As a result, the drop in asset allocations in emerging markets is huge – from 34% in February to just 9% overweight in September.
Allocation to US equities meanwhile rose 29% to a net 7% overweight, and was the first overweight reading since August 2022.
The most crowded trades are long big tech for 55%, and short China equities for 21% – according to the survey.
The 2-year US bond yield edged over the 5% threshold as investors await tonight’s CPI data.
Gold fell -0.45% to US$1,913.60 an ounce. Base metal prices were mostly lower, with copper futures price falling by -0.5% and nickel futures price tumbling -3%.
Crude prices climbed 1.7%, hitting 2023 highs as Brent trades at US$91.99 a barrel.
“The math is simple—declining supply and rising demand equal higher prices,” said Adam Turnquist of LPL Financial.
Iron ore futures rose almost 2% to US$120.23 a tonne as economic data points to a recovery in the world’s top iron ore consumer, China.
The Aussie dollar fell slightly to US64.25c.
Bitcoin meanwhile rebounded and surged over 3% in the last 24 hours to US$25,970.
SEC Chair Gary Gensler was asked by the Senate Banking Committee overnight what he needs to see before approving a spot Bitcoin ETF.
Gensler continued to slam the crypto market, saying that it was a Wild West of non-compliance.
“It’s a field which is rife with fraud, abuse, and misconduct,” he told lawmakers.
RocketDNA (ASX:RKT)
The South African Civil Aviation Authority (SACAA) approval has been received for Remote Docking Station Operations, to operate RocketDNA’s autonomous ‘drone-in-abox’ product. RKT is now the first company in South Africa to receive approval for Remote UAS Docking Station Operations.
Equinox Resources (ASX:EQN)
Equinox announced the appointment of Zekai Komur as its new CEO, effective immediately. With over 23 years in the resources sector, Komur is a seasoned leader who has held senior management roles in companies such as BHP, INPEX, Fortescue, and Northvolt. Previous CEO, Gower He, resigned from his position to pursue other opportunities.
Prodigy Gold (ASX:PRX)
Results from surface sampling at the Hyperion project returned multiple encouraging gold results, including the higher-grade: HYPSS2307 – 15.27g/t Au, HYPSS2310 – 6.04g/t Au, and HYPSS2318 – 2.24 g/t Au. The rock-chip results will be supplemented by the results from the completed reverse circulation drilling campaign in the wider Hyperion area that totalled 24 holes for 2,566m.
Strike Energy (ASX:STX)
Strikes says Production Licence – L24 has been granted over the 100% owned and operated South Erregulla gas field previously located in EP503. The company has now commenced the high impact SE appraisal drilling campaign, and spudded the SE2 appraisal well. It has also subsequently drilled to 4,259m (measured depth) within the intermediate hole section.
Burgundy Diamond Mines (ASX:BDM)
Following the completion of theacquisition of Ekati Diamond Mine in July, Burgundy said it has secured diamond sales of ~US$90m for Q3 CY23 to date, as compared to ~US$81m in the pcp. Currently, the company has sold 784,000 carats in Q3 CY22 to date, as compared to 901,000 total carats sold in Q3 CY22.
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