ASX 200 futures are showing a strong performance, trading 55 points higher and marking a 0.69% increase as of 8:30 am AEST.
The S&P 500 had its best day since early June, driven by a rebound in tech stocks that helped recover some of the losses from their worst week since April. This recovery in the tech sector indicates renewed investor confidence following a challenging period. In an unexpected move, China's central bank cut key interest rates, aiming to stimulate economic growth and stability. Additionally, resource companies are continuing to release their quarterly reports, providing crucial insights into the sector's performance and future outlook. Another notable event today is the debut of Axel Ree on the ASX, scheduled for 10:30 am, which is anticipated to attract significant investor interest.
OVERNIGHT MARKETS
Major US benchmarks rebounded, finishing near their best levels, led by a surge in tech stocks. Top performers included Tesla (NASDAQ:TSLA) (+5.1%), Nvidia (+4.7%), and Alphabet (NASDAQ:GOOGL) (+2.2%). This tech and growth rally is largely seen as a correction from the post-CPI rotation, which was deemed too rapid. Despite recent volatility, the six largest tech stocks are still projected to grow their earnings per share (EPS) by 30% this year, compared to just 5% growth for the other 494 companies in the S&P 500. Goldman Sachs (NYSE:GS) suggests that small-cap and equal-weight benchmarks will continue to outperform unless Big Tech’s Q2 results prompt analysts to upgrade earnings estimates for the second half of 2024 and the full year of 2025. Jefferies notes that the S&P 500 reached a weekly Relative Strength Index (RSI) of nearly 80 last week, a rare occurrence that has historically led to a short-term pause followed by solid gains over the next six to twelve months.
ASX TODAY
Arafura has reached a major milestone in debt funding, securing conditional approvals from commercial lenders for $775 million in senior debt facilities (ASX:ARU). Lynas reported Q4 total rare earth production of 2.19 kilotons, with gross sales revenue rising to $136.6 million compared to $101.2 million in the previous quarter, and a cash balance of $523.8 million (ASX:LYC). Ora Banda Mining announced Q4 gold production, achieving full-year production of 69,932 ounces, aligning with the guidance range of 67-73 thousand ounces, and provided FY25 guidance of 100-110 thousand ounces (ASX:OBM). Plenti Group reported Q1 revenue of $60.9 million, marking a 32% increase year-on-year (ASX:PLT). SRG Global has updated its FY EBITDA guidance towards the upper end of the range at $98-99 million, compared to the prior guidance of $95-100 million and consensus expectations of $98 million (SRG).
WHAT TO WATCH TODAY
Several stocks that reported quarterlies or trading updates on Monday will be in focus today as the market digests the new data. Key names to watch include:
- Droneshield: Shares fell 20.9% after reporting Q2 revenue of $7.4 million, a pipeline of $1.1 billion, and plans to increase manufacturing capacity from $400 million per annum to $500 million per annum. The stock is down 40% over the past five sessions and has been downgraded by several analysts overnight.
- Insignia Financial: Shares rose 5.0% on a better-than-expected Q4 update.
- Iress: Shares surged 9.3% following a 1H24 earnings upgrade, with the company expecting first-half adjusted EBITDA of $65-67 million.
- Perenti: Shares gained 5.7% after revising FY free cash flow guidance to $180 million, surpassing prior guidance of $100 million and the $113 million consensus.
- South32: Shares plummeted 12.5% after its Q4 update downgraded FY25 alumina production guidance by 5%, Sierra Gorda copper by 7%, and Cannington zinc by 9%.