Wall Street rebounds after massive selloff. Picture Getty
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Aussie shares are set to drop when the market opens on Wednesday despite a rebound on Wall Street. At 8am AEST, the ASX200 futures contract was pointing down by 0.3%.
Overnight, markets regained some calm with a fresh surge in dip-buying following a global market turmoil in the previous sessions.
The S&P 500 bounced back 1.04%, the blue chips Dow Jones index lifted by 0.74%, and the tech heavy Nasdaq rallied by 1.03%.
Wall Street’s ‘fear gauge’ – the VIX – retreated by 30%, its biggest one-day drop since 2010, after surging by 65% the previous day.
Demand for haven assets have waned, with Treasury prices dropping and gold slumping. Bitcoin and Ether recovered from steep losses.
But some experts warned that some areas of volatility are likely to persist.
“The lingering question now is whether the concerns that pushed the market into a cascade of selling are alleviated,” said Quincy Krosby at LPL Financial.
Savita Subramanian at BofA added: “Get used to the volatility. The best hedge is owning high-quality stocks; we use earnings and dividend stability as our key measure.”
To stocks, Nvidia Corp surged 4%, leading the rise among chipmakers.
Both the “Magnificent Seven” index of major tech stocks and the Russell 2000 of small companies increased by over 1%.
In late trading, Airbnb sank by 16% to a weak outlook, as it reported Q2 profit of US$555m compared with last year’s US$650m.
Super Micro Computer fell 11% despite providing a strong sales forecast as businesses invest in equipment for advanced AI tasks.
And, Reddit fell 3% post-market despite exceeding analysts’ expectations on sales growth and narrowing its loss in Q2.
Meanwhile, Goldman Sachs analysts now predict a 25% chance of a US recession in 2025, up from its previous prediction of 15%.
Despite this increased risk, they believe the overall economic data remains strong.
Goldman said that there are no major financial imbalances and noted that Fed Reserve Chairman Jerome Powell has a lot of room to cut interest rates if needed.
Goldman expects the Fed to implement three rate cuts of 25 basis points each in September, November, and December.
Many market participants, however, are anticipating bigger rate cuts, with traders now predicting an 86% chance of a 50 bp cut in September, up from just 11% a week ago.
Gold price fell 0.7% to US$2,388.60 an ounce as traders rotated out of safe haven assets.
Oil prices slipped by 0.3%, with Brent crude now trading at US$76.07 a barrel.
The benchmark 10-year US Treasury yield jumped by 10 basis points (bond prices lower) to 3.90% after dropping 40 basis points in the past week.
The Aussie dollar bounced back by 0.3% to US65.22 cents.
The iron ore price dropped by 1% to US$102.85 a tonne.
Bitcoin meanwhile rebounded by 3% in the last 24 hours to US$56,065, while Ethereum was also up 1% to US$2,461.
LBT Innovation (ASX:LBT)
LBT says AstraZeneca purchased 5 APAS Independence instruments with the total contract valued between USD 2.2 million and 2.7 million, depending on the level of maintenance and support services chosen. In addition to the equipment, AstraZeneca will receive annual maintenance and support for the next seven years. There is also potential for additional orders from AstraZeneca in the future. Previously, in January 2023, AstraZeneca funded LBT with over AU$1 million to develop a new APAS analysis module. By March 2024, LBT had successfully launched the APAS Independence, which is an advanced microbiology automation system designed to streamline the process of analysing culture plates used in laboratories.
Arrow Minerals (ASX:AMD)
Arrow has announced an exploration target for the Niagara Bauxite Project, estimating about 170 to 340 million tonnes of bauxite at a grade of 40 to 46% Al2O3 and 1 to 4% SiO2. This estimate is preliminary and based on favourable rock formations and past exploration work, but it is uncertain whether further exploration will confirm a Mineral Resource. CEO David Flanagan said that since the project’s last drilling in 2007, global bauxite demand and prices have risen, and a new multi-user railway is expected to be operational by late 2025. Arrow plans to conduct resource drilling and scoping studies over the next 12 months.
Integrated Research (ASX:IRI)
IRI announced the appointment of Ian Lowe as its new CEO, starting October 1. Lowe,who has a strong background in growing technology businesses, will lead the company as it focuses on expanding its product offerings. He brings extensive experience from roles in both publicly listed and private companies across various sectors like finance, media, and sustainability. His appointment is seen as a key move for driving the company’s growth and leadership in the tech industry.
Castle Minerals (ASX:CDT)
Castle has started a 1,000-meter drilling program at its Kpali Gold Project, which is part of a larger 3,500-meter exploration effort. This initial phase aims to test the potential of a new gold exploration area in West Africa. Previous drilling at Kpali found high-grade gold at shallow depths, with results including 22 meters at 2.85 g/t Au and 7 meters at 6.03 g/t Au. The Kpali Gold Project is within Castle’s 2,686-square-kilometer WA Gold Project and is situated in the promising Birimian terrane, known for its significant gold deposits in Ghana and West Africa.
HighCom (ASX:HCL)
HighCom says that its FY24 revenue is expected to be about $46 million, slightly below earlier guidance due to a delayed contract. Cash reserves have increased from $1.6 million to $6.2 million in the second half of FY24, and the company is debt-free with $3.8 million in available facilities. Although EBITDA for FY24 will show a $10 million loss, including $6.2 million in impairments, the company expects a positive EBITDA of around $2 million in the second half of the year.
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