• ASX to open higher after a softer than expected CPI in the US
  • Boeing could face criminal charges
  • And the most shorted stocks on the ASX

 

Aussie shares are poised to open higher on Thursday as April’s US CPI data fuelled hopes for a Fed rate cut pivot. At 8am AEST, the ASX200 futures contract was pointing up by +0.60%.

The optimism has driven all three major US benchmarks to new record highs overnight.

The S&P 500 rose by +1.17%, the blue chips Dow Jones index was up by +0.88%, and the tech-heavy Nasdaq lifted by +1.40%.

US inflation took a bit of a breather in April, marking the first cooldown in six months.

The core CPI, which excludes food and energy costs, went up by 0.3% from March, breaking a streak of three higher-than-expected increases, and the YoY rise of 3.4% was the lowest pace in three years, according to the Stats department.

The new data has fuelled market optimism that the Fed will cut rates this year, but Nigel Green of de Vere Group warned this is wishful thinking and ignoring the reality of the situation.

“Super cautious Fed officials will need to see several consecutive months of evidence showing inflation – which is proving far stickier that had been hoped – is really heading back to the 2% target before they consider a pivot on monetary policy.

“As such, we still expect there’s a considerable risk that they will not feel comfortable about cutting rates before 2025,” Green said.

However bond yields traded lower after the print, suggesting the market’s increasing bets on lower rates.

To stocks, Boeing was down -2% as the US government is reportedly thinking about throwing the book at the aircraft maker because it breached the terms of a US$2.5 billion deal linked to the crashes back in 2018 and 2019. Prosecutors will have no later than 7 July to file charges.

Both BHP and takeover target Anglo American shares were up +1% as shareholders anticipate that BHP will bounce back with a third and better offer before the regulatory deadline hits next week.

Burberry meanwhile tumbled by -6% in London after saying that it was bracing for a tough first half ahead. The British brand famous for its pricey trench coats said its disappointing sales numbers were caused by sluggish demand in both China and the US.

 

The most shorted ASX stocks

S&P Global Market Intelligence has released its Top 10 most shorted stocks in Australia.

The metric used to calculate the short interest is the percentage of outstanding shares on loan.

Below data is of May 3.

Source: S&P

 

In other markets …

Gold price rose by +1.4% to US$2,388.20 an ounce.

Oil prices jumped by +1%, with Brent crude now trading at US$82.90 a barrel.

The benchmark 10-year US Treasury yield fell by 10 basis points (bond prices higher) to 4.34%.

The Aussie dollar rose by +1% to US66.97 cents as US yields tumbled.

The iron ore price fell by -1% to US$113.70 a tonne.

Bitcoin meanwhile was down up by +7% in the last 24 hours to US$66,170.

 

5 ASX small caps to watch today

Talga Group (ASX:TLG)
The battery materials and technology company provided an update on its Vittangi Graphite Project in Sweden. Talga said a growth plan has been launched to define larger and longer term production potential of Vittangi, amid rising demand for Li-ion battery anode material. The study has boosted JORC Exploration Target at Vittangi to 240-350 million tonnes at 20–30% graphite. New scoping study being finalised this quarter, focussing on potential for expanded mining of existing Mineral Resources.

Lincoln Minerals (ASX:LML)
Lincoln provided an update on its uranium exploration plans across its highly prospective tenement portfolio on South Australia’s Eyre Peninsula, with drilling expected to commence at its Jungle Dam uranium prospect in Q3 CY2024, four months ahead of schedule. Drill targets were identified in an area interpreted as a paleochannel of similar style to Alligator Energy’s (ASX: AGE) nearby Samphire Project.

Pinnacle Minerals (ASX:PIM)
Pinnacle announced that a 93-hole, ~2,000m AC drilling program has been scheduled to commence on May 20. The project was previously held by Tronox (NYSE:TROX). The titanium dioxide market is seeing a rebound in demand, with Tronox stating in their 2024 market outlook: “We expect 2024 to see a reversal of several of the trends for the last 18 months. On the market, we’ve already begun to see a pickup in demand for TiO2 that is more positive than we would see normally at this time of year. January sales were strong, and we’re seeing continued strengthening in the market for February and March order books.”

Sunstone Metals (ASX:STM)
Sunstone announced strong gold-copper trench assay results which show that its El Palmar T1 gold-copper porphyry deposit is a large system extending through to surface. The trenching results are from a broader trenching program to enlarge the areas of gold-copper mineralisation at El Palmar in preparation for the next phase of drilling.

Miramar Resources (ASX:M2R)
Miramar advised that reprocessing of geophysical data has upgraded the 8-Mile target within the Gidji JV Project, 15km north of Kalgoorlie, WA. Miramar’s 8-Mile target is located at the southern boundary of the Gidji JV Project and abuts Northern Star Resources’ 313koz “8 Mile Dam” gold deposit.

 

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