• The ASX will open higher today after Wall Street snapped a 5-day losing streak
  • Boeing stock given a target upgrade
  • Oil prices tapped 1-year low


The ASX is poised to rise this morning and at 8am AEDT, the ASX 200 Dec futures contract was pointing up by 0.30%.

Overnight, Wall Street snapped a five-day losing streak as major equities indexes rose around 1%.

Bond prices went the other way with 10-year yields on the rise (bond prices down), hovering near 3.5%.

Not much happened last night. Jobless claims in the US printed at 230,000 over the past week, in line with forecast.

Tonight’s producer price index (PPI) will be the final piece of important data point Fed members will see before their Dec 13-14 policy meeting.

“The FOMC is expected to downshift to half-point pace, but traders will care to see what they have to say about the trend of inflation and where rates could peak,” said OANDA analyst Edward Moya.

According to economists polled by FT, the Fed’s efforts to stamp out inflation will push the US economy into a recession and unemployment up to at least 5.5%.

Every other expert has also pretty much predicted a recession.

Scion hedge fund manager and ‘Big Short’ author Michael Burry warned about a “real recession” that will last multiple years.

Tesla CEO and Twitter chief Elon Musk also warned about a severe recession, urging the Fed to cut rates immediately.

To stock news, Boeing was given an analyst upgrade by Well Fargo, which increased its Boeing price target from US$185 to US$218.  The Boeing share price rose 1.5% to US$179 on the news.

The US Federal Trade Commission is reportedly seeking to block Microsoft’s US$69 billion acquisition of Activision Blizzard.

In other markets, oil prices tapped a 1-year low, falling for a fifth straight session on the prospect the key North American pipeline Keystone in Kansas could resume operations after being shut down.

Canadian TC Energy Corp, which owns the pipeline, had earlier declared force majeure on Keystone and shut it down after the spill into a Kansas creek.

Closer to home, China is seeing Covid clusters in Guangzhou after the city abandoned the usage of Covid tests.

A recent Bloomberg analysis calculated that a full reopening in China would lead to 5.8 million people admitted to intensive care.

To cryptos, where Bitcoin has surged 2% in the last 24 hours to US$17,182.

“It is no surprise that FTX founder Sam Bankman-Fried reportedly will face a market manipulation inquiry,” said Moya.

“The legal dissection of FTX and all of management will take months and dominate the headlines, but might not drive the crypto market unless it exposes an unforeseen domino fall in the cryptoverse.”

5 ASX small caps to watch today

Warrego Energy (ASX:WGO)
Warrego has been advised by Beach Energy (ASX:BPT) that Beach does not intend to match the revised Hancock price of 28c per share. Beach had earlier upped the ante with a takeover offer of 25 cents. Warrego’s board has now unanimously recommended that Warrego shareholders accept the Hancock offer.

Nitro Software (ASX:NTO)
Nitro said it will consider a takeover offer from Potentia and make a decision before the market opens on Monday December 12. Potentia had earlier increased its offer by $0.20 (11%) to $2.00 cash per Nitro share, with a scrip alternative.

Phosco (ASX:PHO)
Phosco announced the results of a scoping study of its mining operation at its Chaketma Phosphate Project in Tunisia. Phosco says Chaketma could potentially offer strong financial returns, with total revenue of US$10.1B @ US$150/t FOB North Africa phosphate concentrate. The capital needed to develop the project is estimated at US$170m.

Lanthanein Resources (ASX:LNR)
Lanthanein says first pass aircore drilling has returned exceptional visual results highlighting a significant areal extent of high quality bright white kaolin at its Koolya Project in WA. High purity kaolin is of rising importance as a critical mineral due to the processing into High Purity Alumina (HPA) which is being used in Li‐ion batteries.

Vista Group (ASX:VGL)
Vista announced the appointment of Stuart Dickinson as its new CEO with effect from 11 April 2023. Dickinson will take over from Kimbal Riley who, after five years as CEO, is retiring from the role. Dickinson is an experienced global technology executive, with more than 25 years of technology leadership experience, most recently as New Zealand Country Manager of NYSE listed DXC Technology (NYSE:DXC).