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Market Highlights: Wall Street rises despite hotter than expected US inflation data
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- ASX to open higher after strong session on Wall street overnight
- US inflation figures data for February comes in hotter than expected
- Bitcoin continues to climb and is now up more than 60% YTD
The ASX is poised to rise on Wednesday. At 8am (AEST) the S&P/ASX200 index futures contract was pointing up 14 points to 7729.00 points. The S&P/ASX 200 closed 0.11% higher on Tuesday to 7712.50 points.
Overnight on Wall Street it was a strong session as key US inflation data came in hotter than expected. Mega tech led the gainers with the NASDAQ composite lifting 1.5%, the S&P 500 rose 1.1% to a record high close, while the Dow Jones Industrial Average gained 0.6%.
Treasury yields also gained with the US 10-year bond yield near 4.15%. According to the latest US CPI figures headline inflation had a monthly gain of 0.4% in February and 3.2% over the prior year, slightly up from a 0.3% rise in January and 3.1% annual gain and higher than forecast.
Core CPI – which takes out food and energy prices – came in with a 0.4% uptick on the month and 3.1% gain on the year.
The latest inflation figures are the last before the US Federal Reserve’s next policy decision on March 20 with investors hopeful the central bank will cut interest rates this year but the question remaining when?
One of the world’s largest independent financial advisory and asset management organisations deVere Group CEO Nigel Green thinks investors may need patience.
“The latest US CPI data reinforces our position that the Fed is almost now certainly not going to cut rates this month and indeed it could, we believe, delay cutting rates until the third quarter of the year,” he says
“As the markets are seemingly already pricing-in a rate cut in the summer, should there be a push back against this expectation, as we now believe there will be, we’ll see increased volatility across financial markets.”
On the stock front Oracle soared by 11.8% overnight following the software giant’s surpassing of quarterly profit projections, fuelled by increased demand for artificial intelligence (AI) in its cloud business.
Oracle also hinted at an upcoming collaborative announcement with leading AI chip manufacturer and customer Nvidia.
Hotter-than-hot AI stock Nvidia’s shares climbed by 7.2% on news of the possible collaboration.
Another enterprise cloud software provider ServiceNow also rode the wave of AI optimism, experiencing a 4.3% jump. Microsoft gained 2.6% and Facebook’s parent company Meta was up 3.3%.
Overnight, the UK’s blue-chip index the FTSE 100 hit a 10-month high Tuesday and was up more than 1.2% as slowing wage growth raised led to optimism of interest rate cuts.
Bitcoin falls after strong recent rally
Meanwhile, Bitcoin has slipped and is down ~2.3% in the past 24 hours and is currently trading at US$70,848.70. The leading cryptocurrency is up more than 60% YTD, reaching highs of more than US$72,000 and surpassing the previous high of US$68,991 set in November 2021.
Bitcoin has been buoyed by the SEC approval of Bitcoin ETFs. Other regulators have followed suit with UK regulators also green lighting a Bitcoin ETF but for professional investors at this stage, not mum and dad retail investors.
Further fuelling the rise in Bitcoin traders anticipate an upcoming industry event known for restricting supply, traditionally resulting in a boost to its price.
OPEC maintains 2024 projection for oil demand
OPEC has maintained its 2024 projection for oil demand growth at 2.2 million barrels while slightly revising downward its forecast for non-OPEC supply growth.
The adjustment reflects the inclusion of supplementary voluntary cuts in the second quarter by OPEC+ nations.
WTI is up 0.09% to US$78.003/barrel while Brent is up 0.04% to US$82.241/barrel.
Iron ore also continues to fall and is down 5.96% to US$110.50/tonne
Gold is down 1.11% to US$2158.30/ounce, while copper has fallen 1.10% to US$3.8795/ounce.
The Aussie dollar is firmer against the greenback trading up 0.07% to US66.17 cents.
ASX small caps to watch today
FRB has announced it has signed a non-binding strategic agreement with engineering firm China National Chemistry Southern Construction and Investment Co Ltd to collaborate through the development and ultimately building the company’s high-purity manganese sulphate plant, located in Jinshi, Hunan Province.
IXR says it has achieved a major milestone of the first production of Mixed Rare Earth Carbonate (MREC) from its newly commissioned Demonstration Plant on site at Makuutu in Uganda. The company says MREC produced from Makuutu is rich in both magnet and heavy rare earth elements (REEs), and presents a key alternative, strategic future source for supply constrained dysprosium and terbium, from which ~98% of global supply comes from China.
IXR currently owns 60% of Makuutu and has agreed terms with partners Rwenzori Rare Metals on increasing its ownership to 94%, subject to shareholder approval and satisfying conditions expected to occur in H1 CY24.
RDN says it has secured an archaeological/anthropological heritage survey, with the Ngarluma Aboriginal Corporation (NAC) over its Andover North Lithium Project area in Western Australia’s Pilbara.
RDN says the heritage survey is scheduled to kick off on April 2, and will focus on the areas interpreted to be underlain by the Andover complex ultramafic rocks, which host the Azure Minerals (ASX:AZS) lithium deposit and defined spodumene bearing pegmatites on RDN’s Andover South project.
At Stockhead, we tell it like it is. While Ionic Rare Earths and Raiden Resources are Stockhead advertisers, they did not sponsor this article.
