• ASX set to open flat after yesterday’s sell-off; Wall Street dipped
  • Treasury yields tumbled, boosting speculation of Fed rate cuts
  • Oil prices hit a year-low; Nordstrom family plans $3.8 billion buyout

 

The ASX is set to kick off the day flattish, with the SPI ASX200 futures bouncing between slight gains and losses.

This comes after a rough sell-off yesterday, the worst we’ve seen in over a month, on news that US manufacturing activity was weaker than expected.

In New York overnight, Wall Street dipped again as everyone’s eyes turned to Friday’s US payrolls report and what it might mean for interest rate cuts.

The S&P 500 was down 0.16%, the blue chips Dow Jones was up by 0.09%, and the tech heavy Nasdaq slipped by 0.3%.

Treasury yields tumbled (bond prices soared), as another jobs data, the JOLTS, came in below expectations and hit its lowest point since 2021.

This led traders to start betting that the Fed might lower rates sooner, with the yield on the US two-year note now dropping below the 10-year note.

The 10-year Treasury and 2-year Treasury are now at their least inverted levels in more than two years

“Markets seem to see September as a coin flip between 25 and 50 basis points,” said Neil Dutta at Renaissance Macro Research.

Goldman Sachs, meanwhile, has fired a warning shot, saying the stock market might face a correction if Friday’s payrolls data comes in weak.

To stocks, Nvidia dropped 1.7% after a 9.5% plunge the day before, marking its worst two-day decline since October 2022.

Dollar Tree took a big hit, dropping 22.2% — the biggest fall among S&P 500 stocks — after slashing its full-year earnings forecast.

Verizon‘s got its eye on buying up rival Frontier Communications, with talks well advanced, according to someone in the know. Verizon’s share price was down 3%.

And, the Nordstrom family is eyeing a move to make its namesake department store chain private in a US$3.8 billion deal. Nordstrom’s shares were flat.

Elsewhere, oil prices dropped to their lowest in over a year as worries about weaker demand overshadowed talk of OPEC+ delaying supply increases.

Brent crude fell 1.5% to $US72.70 a barrel, the lowest close since June 2023.

 

Cryptocurrency in Australian wills skyrockets

Meanwhile, new data from Australia’s online will-writing platform, Safewill, indicates a significant increase in the inclusion of digital assets in inheritance planning.

Over the past four years, the number of wills incorporating cryptocurrency and other digital assets has surged by an astonishing 2,400%.

Australians aged 25 to 35 are leading this trend and are strongly inclined to include crypto assets in their wills.

Safewill’s findings also reveal an intriguing link between the inclusion of crypto and property ownership.

Will-makers who list digital assets are 28% less likely to include real estate, hinting at a potential shift in investment strategies among younger generations.

Bitcoin remains the most commonly referenced digital asset, followed by Ethereum and Dogecoin.

It is a trend expected to rise as crypto continues to gain momentum, says Safewill, with Australia boasting the highest rate of cryptocurrency adoption among developed nations.

 

Back to markets …

Gold price rose by 0.1% to US$2,495.08 an ounce.

Oil prices slumped by 1.5%, with Brent crude now trading at US$72.70 a barrel.

The benchmark 10-year US Treasury yield plunged by 8 basis points (bond prices higher) to 3.76%.

The Aussie dollar climbed by 0.15% to US67.26 cents.

Bitcoin meanwhile was up by 0.5% in the last 24 hours to US$58,290 and Ethereum rose by 0.2% to US$2,466.

 

5 ASX small caps to watch today

Burgundy Diamond Mines (ASX:BDM)
Diamond producer Burgundy announced positive early results from its Misery underground drilling. The drilling suggests the high-value Misery pipe could stay productive past 2026. Early findings include a Fancy yellow diamond and a larger-than-expected ore body. Drilling will soon target a promising new area, the Southwest extension. As a result, Burgundy plans to delay the Sable project by a year due to anticipated ore surpluses. Updated resource estimates will be released in the next few months, with a new mine plan expected in early 2025.

Earths Energy (ASX:EE1)
Earths will expand its initial techno-economic assessment into a full feasibility study for its Paralana and Flinders West geothermal projects in South Australia. This decision follows a review by global energy experts GLJ Ltd, who found promising potential for both geothermal energy production and carbon capture. The comprehensive feasibility study, set to be completed by December, will assess geothermal extraction technologies, cost estimates, and economic models, while also exploring synergies with carbon capture and storage. CEO Josh Puckridge said this study will help Earths Energy maximise energy production and contribute to Australia’s green energy transition.

Westgold Resources (ASX:WGX)
Westgold has started mining the South Junction Lode at the Bluebird-South Junction complex in Meekatharra, aiming for a 100,000-tonne monthly run rate by the third quarter of FY25. Drilling has revealed impressive gold grades, with recent finds including 14.93m at 15.95g/t Au. The resource definition drilling is ongoing, with surface rigs exploring deeper extensions of South Junction and the nearby Polar Star Lode. This marks a significant milestone, as Westgold works towards expanding the mining complex and increasing output from its processing plant.

Lycaon Resources (ASX:LYN)
Lycaon said it was excited about new geophysical modelling results from its Stansmore Project in West Arunta, WA. The modelling shows the Stansmore anomaly as a 500m-diameter pipe, similar to other significant discoveries in the region. The Volt and Ions prospects also show promising magnetic anomalies, suggesting they could be part of a carbonatite intrusion. Drilling is set to start in Q4 2024, pending a heritage report. The company has secured up to $180,000 in funding for drilling from the Western Australian Exploration Incentive Scheme.

Synlait Milk (ASX:SM1)
Synlait has raised its forecast base milk price for the 2024/2025 season to $8.60 per kgMS, up from $8.00 per kgMS. Although this is an increase, Synlait says it remains cautious due to the uncertainty of global dairy prices. The company aims to keep its milk supply strong by offering competitive prices and improved rates for the upcoming season. Synlait will keep an eye on market changes and update farmers accordingly. The final milk price for the 2023/2024 season will be confirmed in the company’s full-year results on 30 September.

 

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

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