• ASX to open higher on Tuesday after strong gains in New York
  • Oil prices have eased, driving tech stocks higher
  • Janus Henderson says healthcare stocks will be ones to watch

 

Aussie shares are poised to open higher after broad gains on Wall Street. At 8am AEST, the ASX 200 index futures was pointing up by +0.7%.

In New York, the S&P 500 rose by +1.06%, the blue chips Dow Jones index was up by +0.93%, and the tech-heavy Nasdaq rallied by +1.2%.

Stocks lifted across the board ahead of a host of corporate earnings this week, and diplomatic efforts to contain the Israel-Hamas conflict.

Oil prices have eased, and safe haven flight to bonds has faded with funds going back to equities.

Social media company Snap Inc jumped 12% after a leaked internal memo showed the company has big goals next year including raising its daily active users to 475 million, well above analysts’ expectations.

Athletic apparel brand Lululemon rose 10% after reports the US$52bn company would replace game giant Activision Blizzard in the S&P 500 index next year.

Tesla was up 1% ahead of its quarterly results release later this week, while Apple slid modestly as iPhone15 sales in China are said to be off to a disappointing start so far.

Back home, earnings results are scheduled for Newcrest Mining (ASX:NCM), HUB24 (ASX:HUB) and Rio Tinto (ASX:RIO), while Cochlear (ASX:COH) and Telstra (ASX:TSL) will be hosting AGMs this morning.

 

Janus Henderson says healthcare stocks are ones to watch

Although healthcare has lagged the equity market so far in 2023, the sector’s long-term outlook appears stronger than ever, says Janus Henderson portfolio managers Andy Acker and Dan Lyons.

“We think this is an attractive time to be investing in the healthcare sector,” says Acker.

“It’s usually after a period of underperformance that investors get less interested. But that’s exactly when we think an investor should be more interested,” he added.

Acker says higher rates will work their way through the economy, and when they do, we could still see a substantial slowing and a potential recession, especially as we get into 2024.

“That’s when I think the defensive characteristics of the healthcare sector really rise to the fore and become more appreciated,” he said.

“At the same time, the valuations in the sector are at significant discounts to the overall market, whereas historically, they trade at premiums because of their durable nature of growth in the sector.”

Lyons added that big pharma, with all their idle cash, could be looking for takeover targets.

“I’ve seen estimates of around $600 billion of cash that’s out there available for potential spending on M&A [mergers and acquisitions]. And we think that’s going to be an important driver of interest in the sector, as well,” he said.

 

In other markets …

Oil prices eased by around -0.75%, with Brent now trading at US$91.10 a barrel.

Gold price also eased by -0.65% to US$1,919.60 an ounce.

10-year US bond yields surged 8bp, while 2-year rallied 5bp.

Iron ore futures also lifted by +0.6% to US$119.25 a tonne.

Base metals prices were weaker with nickel futures slipping by -1%, and copper futures by -0.5%.

The Aussie dollar gained +0.7% to US63.44.

Bitcoin meanwhile jumped over +4% in the last 24 hours to US$28.375.

 

5 ASX small caps to watch today

Greenvale Energy (ASX:GRV)
Greenvale says its wholly owned subsidiary Greenvale Gold has executed a Farm-in Agreement with Mosman Oil and Gas to acquire a potentially 75% interest in ultra-high-grade helium, hydrogen and hydrocarbon opportunity in the Amadeus Basin in Central Australia. The EP 145 permit hosts an existing Prospective Resource Estimate, with a best estimate of 440 billion cubic feet of total gas, including 26.4 Bcf of helium and 26.4 Bcf of hydrogen.

Castillo Copper (ASX:CCZ)
Following recent management changes, the board has commenced a wholesale strategic asset portfolio review to determine the optimal path in the current macro environment. A key focus of the review will be determining which assets remain core and highly prospective, then optimally allocate capital to maximise their exploration potential. The assets which are deemed non-core will be rationalised or sold to interested third-parties.

Hiremii (ASX:HMI)
Hiremii announced that Inverse Group, its recruitment and labour hire business, has entered into agreements with Octet Finance for a financing facility totalling $2m. The revolving facility is for a minimum period of 15 months secured against accounts receivables, together with a general security provided by group companies as guarantors, limited to the value of the facility.

WIA Gold (ASX:WIA)
WIA has obtained receipt of gold assay results from the main mineralised zone of diamond drillhole, KDD013, at its Kokoseb Gold Project in Namibia. Assays from the main mineralised zone in diamond hole KDD013 include 3.5m at 2.52g/t Au from 278.2m, and 9.5m at 1.27g/t Au from 294.6m.

Celsius Resources (ASX:CLA)
CLA has completed a program of 12 shallow diamond drill holes to test the extents of oxide copper mineralisation from Nabiga-a Hill at the Sagay Copper-Gold Project. Highlights from the drilling program include: 69.3m @ 0.56% copper from 10.7m down hole from SGY-040, and 47.0m @ 0.85% copper from 33m down hole from SGY-045.

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