• The ASX will open lower despite a rally on Wall Street
  • Earnings season in the US will pick up speed later this week
  • Consensus suggests S&P earnings will shrink by 9% this quarter


Aussie shares are set to open lower on Tuesday despite Wall Street resuming its rally. At 8am AEST, the ASX 200 index futures was pointing down by -0.2%.

Overnight, the S&P 500 closed 0.39% higher while tech-heavy Nasdaq climbed 0.93%.

The US earnings season is still in focus, and later this week we’ll see results from companies including Tesla, Netflix, and Goldman Sachs.

Tesla’s share price rallied over 3% last night after announcing that it has built the first Cybertruck at its gigafactory in Texas after two years of delays.

Apple lifted almost 2% after Morgan Stanley raised its target price to US$220 (vs current price of US$194), saying that Apple’s business in India could be worth US$40 billion over the next decade.

“The key to the stock market remains the mega-cap tech trade, and many traders won’t do any major positioning until we hear from Netflix and Tesla,” said Oanda analyst, Edward Moya.

Now read: Tech-Heavy: Netflix and Tesla get naked this week. What we see could be shocking, but important…

Meanwhile, China’s slowdown could be the biggest catalyst for a market downturn. Data yesterday showed that China’s GDP in the April-June period grew by 6.3%, much lower than the 7.3% economists had predicted.


Earnings and S&P 500 prediction

The prediction for the stock market over the coming months remains vague, however what seems certain is the bullish earnings season currently underway.

So far, 77% of companies in the S&P 500 that have reported their earnings have beaten analysts’s predictions on earnings per share, according to BofA data.

That number is down from last quarter’s 90%, but is still up from the historical average of 67%.

“The consensus however suggests that S&P earnings will shrink by 9% in the second quarter, and hit their lowest point in Q3 before a revival comes in 2024,” said market analyst, Chelsea Johnson.

“And while predictions for the S&P 500 in 2023 have been adjusted upwards by many strategists, many expect the index will experience a downturn by the year’s end.”

According to Bloomberg, the average strategist predicts a 6.6% fall in the S&P 500 index in the second half of the year due to a mild recession.


In other markets …

Gold traded flattish at US$1,954.80 an ounce.

Analysts believe that gold’s rebound will have to take a break until we know for sure if the Fed is done raising rates at the July 26th FOMC meeting.

Crude oil prices tumbled by around -1.7%, with WTI now trading at US$74.18 a barrel.

“Oil won’t catch a bid unless China finally unleashes meaningful stimulus that propels large parts of the economy,” said Moya.

Bitcoin meanwhile was down -0.55% in the last 24 hours to US$30.183.

Fund manager Cathie Wood has doubled down on her prediction of a US$1.5m Bitcoin price she made in February, saying that she’s “very positive” on Coinbase – which is the second largest holding in her ARKK fund.


5 ASX small caps to watch today

Plenti Group (ASX:PLT)
Non-bank lender Plenti has achieved record loan originations, with the loans portfolio increasing to $1.90 billion in the quarter, which was 32% above pcp and 8% above prior quarter. The company’s automotive loan book also reached the $1 billion milestone during the quarter. Plenti says its FY24 objectives include growing its revenue to over $200 million.

Black Cat Syndicate (ASX:BC8)
BC8 announced the completion of the Coyote Gold Operation scoping study. Study highlights include: initial mine production target of ~200koz @ 3.6g/t Au, to be mined in the first 5 years of operation. Average recovered ounces of ~44kozpa, with peak production of ~55kozpa in years 3 and 4, and significant potential to increase the annual production rate and mine life.

Canterbury Resources (ASX:CBY)
Soil sampling has been completed over the Briggs porphyry copper-molybdenum system in Queensland. The soil copper anomaly at Briggs now measures 2,300m long and up to 1,000m wide at >500ppm copper. The recently published Mineral Resource Estimate (MRE) for the project correlates closely to the 500ppm Cu contour wherever tested by drilling. A revised exploration target of 480Mt to 880Mt at 0.20% to 0.30% Cu and 25ppm to 40ppm Mo has been defined.

Future Battery Minerals (ASX:FBM)
Diamond drilling component of the Phase 2 exploration drilling at the Kangaroo Hills Lithium Project has returned high-grade lithium (Li) assay results, including: 23m @ 1.19% Li2O from 44m (KHDD001), and 10m @ 1.30% Li2O from 25m (KHDD002).

Alicanto Minerals (ASX:AQI)
3D modelling of historic Falun Mine has highlighted high‐priority near mine targets. The historic Falun mine produced 28Mt at 4% copper, 4g/t gold, 5% zinc, 2% lead and 35g/t silver. The newly identified zones sit outside the historic mine and are not impacted by historical mining voids. Newly compiled, previously unreleased historical intersections outside the mine area include: 15.5m @ 2.0% copper, and 6.6m @ 2.8% copper, 1.4g/t gold.


At Stockhead we tell it like it is. While Black Cat Syndicate, Future Battery Minerals, and Alicanto Minerals are Stockhead advertisers, they did not sponsor this article.