FIVE at FIVE AU: ASX gains; Nasdaq still high on AI; Saudis cut oil production; US easing unlikely

© Reuters FIVE at FIVE AU: ASX gains; Nasdaq still high on AI; Saudis cut oil production; US easing unlikely

All eyes are on the Reserve Bank’s next move when it meets tomorrow, with economists widely predicting another rate hike, even as many COVID-19-era borrowers edged closer to the so called ‘mortgage cliff’ – when many cheap fixed-rate home loans are expected to expire, exposing borrowers to the full force of the intervening months of rate rises.

The markets were nonchalant about this, with the S&P/ASX200 up 67.20 points or 0.94% to 7,212.30 at close of play, after crossing above its 200-day moving average.

Over the last five days, the index is virtually unchanged but it’s currently 4.70% below its 52-week high.

All sectors were in the green, or at the very least the black, apart from Information Technology, which was down 1.16%. Consumer Discretionary led the charge, up 1.79%, with Financials (1.43%), Real Estate (1.22%) and Materials (1.19%) closely behind.

In the US there were 52-week highs last week for the Nasdaq, as IG’s Tony Sycamore explained: “We expect AI mania to remain a driver of the Nasdaq in the months ahead, with the technology still too early in its lifecycle to disappoint relative to expectations.

“Pullbacks in AI-related tech stocks and the Nasdaq will likely be met by buyers looking to position for the next leg higher towards the 15,268 high of March 2022.”

Oil producers to slash output

Saudi Arabia has announced it is set to cut oil production by one million barrels a day for a month starting in July as part of an effort by the Organisation of Petroleum Exporting Countries plus Russia and other smaller producers (collectively, OPEC+) to shore up crude prices.

The statement followed a meeting on Sunday in Vienna of the alliance, at which the big oil producer also agreed to extend an earlier production cut of 500,000 barrels per day through to next year.

Russia is also expected to extend a production cut of 500,000 barrels a day through to the end of 2024, while other OPEC+ members also agreed to curb output.

US monetary policy easing unlikely

Over in the US, the sentiment on the central bank’s next move mirrors our own, though there is the possibility of a short pause. Blerina Uruci, chief US economist at T Rowe Price shares her view:

“I think the Fed is likely to skip hiking during the June meeting. Chair Powell and the Fed leadership in recent comments had sounded relatively dovish which I interpreted as more consistent with a skip during the June meeting while leaving the door open to another rate hike down the line.

“More importantly, I interpret the current focus on data dependency as responding to the trend not the month-to-month ebbs and flows in economic indicators.

“This allows [the Fed] strategy to shift gears and hike at every other meeting or after assessing the effects of monetary policy and banking stress over the summer months. In this strategy, several skips could well turn into an extended pause under the right inflation path, although I do not have strong conviction in this outcome.

“Instead, I believe that further interest rate increases may be needed given the underlying resilience of the US consumer and labour market. But with policy already restrictive, more spaced-out hikes seem appropriate.

“At the same time, the recent improvement in the housing data illustrates how finely balance the risk rewards are for the Fed. They cannot let go of their inflation fight just yet. For this reason, I remain strongly convicted that policy easing will not be in the cards this year.”

The five at five

SensOre Ltd (ASX:S3N) reveals promising lithium pegmatite signatures on joint venture AI targets

SensOre Ltd (ASX:S3N) has identified lithium-fertile pegmatite signatures in three of its four joint venture targets in Western Australia, marking a promising start to its field reconnaissance programs.

Read more

Tempus Resources kicks off 4,000-metre Elizabeth resource expansion campaign in Canada

After notching its most successful year of exploration at the Elizabeth Gold Project in 2022, Tempus Resources Ltd is back on the ground in southern British Columbia with a 4,000-metre diamond drilling program designed to expand the project’s resource estimate.

Read more

Cobalt Blue Holdings expects to finalise DFS for integrated cobalt supply chain by year-end

Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) is making strong progress with a definitive feasibility study (DFS) for an integrated Australian cobalt supply chain incorporating the Broken Hill Cobalt Project (BHCP) in New South Wales and a refinery in Kwinana, Western Australia.

Read more

Flynn Gold bolsters Tasmanian portfolio by exercising option on advanced gold and battery metals projects

Flynn Gold Ltd (ASX:FG1) has bolstered its gold and battery metals portfolio after exercising an option to acquire a 100% interest in two projects covering 99 square kilometres in northern Tasmania.

Read more

Helix Resources reveals copper drilling results ahead of Canbelego resource update

Helix Resources Ltd (ASX:HLX) has revealed promising new copper assays from its diamond core drilling program at the Canbelego Copper Project in central New South Wales, ahead of completing a new resource estimate for the Canbelego Main Lode.

Read more

On your six

Thrive or survive? Three steps to successful trading

Wealth Within chief analyst Dale Gillham explains that in trading, times change, but people don't. And that is a problem.

Read more

The one to watch

Resources & Energy Group sees gold and critical mineral upside in WA portfolio

Resources & Energy Group Ltd (ASX:REZ) CEO Daniel Moore introduces Proactive’s Elisha Newell to the company’s precious and critical minerals portfolio. REZ is prospecting for gold and silver in Australia’s premier mineral districts, just a stone’s throw from Kalgoorlie — WA’s legendary gold mining town — and Rockhampton in central Queensland. Moore details what’s in store as the company explores its East Menzies and Springfield projects.

Watch

Read more on Proactive Investors AU

Disclaimer