Market Highlights: Wall Street's winning streak, Tesla's record revenue, and Seth Klarman's bubble warning

ASX to open flat after Wall Street extends rally
Earnings season continued as Tesla, Netflix, Goldman reported results
Legendary investor Seth Klarman warns that the pandemic bubble has not burst

Aussie shares are set to open flat on Thursday despite an eighth straight winning streak on Wall Street.

Overnight, the S&P 500 rose by +0.2% and tech heavy Nasdaq by +0.03% as traders digested a slew of earnings reports.

Tesla slumped -0.71% despite beating expectations to build a record number of vehicles for the quarter. Tesla reported record revenue of $US2.7 billion, and a rise in profit for Q2, in line with analysts’ expectations.

Increased revenue was mainly due to a cut in car prices the EV maker had implemented in response to increased competition and higher borrowing costs.

Netflix fell -7% after the bell after missing sales forecast for the quarter. However, it posted a 5.9 million increase in European subscriptions, more than double the estimates.

Goldman also fell -0.3% after the bell as its profits plunged 58% in Q2 on lower income from dealmaking and trading, as well as a US$1b impairment charge on commercial real estate holdings.

Microsoft meanwhile fell 1.23% after news that its rival Apple was working on new artificial intelligence (AI) products. Apple rose 0.7%.

Apple is said to be secretly building its own framework to create large language model called Ajaz, and has also created a chatbot service that some engineers call Apple GPT.

Seth Klarman warns bubble ‘has not burst’

Legendary value investor Seth Klarman warns that the pandemic bubble in asset prices may not have burst yet.

Klarman said super-low interest rates made capital incredibly cheap and led to startup manias, meme stocks, cryptos, and all kinds of speculative activity.

“I’m not convinced that we’ve even begun to sort out that bubble,” he said.

The hedge-fund boss said the bubble had popped a little in 2022, but stocks have rebounded this year and entered a new bull market.

He cautioned against investor complacency and ruling out disaster entirely.

“We haven’t seen a lot of bodies float up,” he added. “I don’t know what that means, but I’d be worried.”

In other markets …

Gold traded flat at US$1,977.98 an ounce.

“Gold is going to struggle here if the dollar stages a minor comeback, and if earnings season keeps the US stock market winning streak going,” said Oanda analyst Edward Moya.

Crude oil prices fell around -0.7%, with WTI now trading at US$75.27 a barrel.

Overnight, Russia sent its ships to the Black Sea and warned that all other ships will be considered a “military” threat.

“This signals a significant escalation in the war, which might motivate the West to put more pressure on the main buyers of Russian oil,” said Moya.

Meanwhile, Bitcoin was up +0.4% in the last 24 hours to US$29,897.

Smaller, lesser-known altcoins such as Solana and Cardano are rallying, which is a partial reversal of the last quarter performance where Bitcoin soared and altcoins lost ground.

5 ASX small caps to watch today

Zip Co (ASX:ZIP)
Group quarterly revenue was $193.8m, up 21.1% YoY. Transaction volume for the quarter was $2.3b, up 6.4% YoY. Revenue margin for the core business improved to 8.5%, vs 7.6% in pcp. Zip says the US business continued its solid momentum and exited FY23 cash EBTDA positive on a monthly basis, providing a strong platform for growth in FY24.

Nuix (ASX:NXL)
Nuix says its Annualised Contract Value (ACV) for FY23 will be between $184-$186 million, up 15% on pcp. Bottom line statutory EBITDA will be between $32-$35 million, up 164-189% on pcp.

Askari Metals (ASX:AS2)
Askari announced that a highly prospective ‘corridor of interest’ has been discovered, following a recent reassessment of project data. Undrilled LCT pegmatites with visible lithium mineralisation have been observed in the field. Planning is now underway to focus exploration efforts on the new area.

Kuniko (ASX:KNI)
Positive cobalt assays confirmed expanded mineralisation and higher grade shallow lens at Skuterud. Drilling pogramme results include: 6.2m @ 0.43% Co from 25.2m, and 2.1m @ 0.21% Co from 23.2m.

Widgie Nickel (ASX:WIN)
Significant nickel mineralisation intercepts outside of current Gillett Resource have been confirmed. Significant nickel intercepts include: 12.0m @ 1.97% Ni from 192m at Gillett, and 13.2m @ 1.68% Ni from 278.88m at Gillett North.