Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Five at Five AU: ASX jumps 1.04% as tech and coal stocks gain ground

Published 19/01/2024, 02:47 pm
Updated 19/01/2024, 03:30 pm
Five at Five AU: ASX jumps 1.04% as tech and coal stocks gain ground

The ASX200 has climbed 76.1 points or 1.04% to 7,422.60 as of 2:30pm today – almost the entire bourse is in the green, with 10 out of 11 sectors climbing and tech and coal stocks making particular gains.

The two standouts at opposite ends of the spectrum were Information Technology, up 2.77%, and Utilities, down 0.20% with the pleasure of being the only sector to falter today.

Whitehaven Coal (ASX:WHC) is leading the charge for the energy sector today, up 4.35% intraday, and joined by mining giants Rio Tinto (ASX:RIO) (+0.66%), BHP (ASX:BHP) (+0.51%) and Fortescue (ASX:FMG) Metals (+1.81%).

Tech similarly made gains, with Xero Ltd (+3.67%) and Weebit Nano (+3.53%) making particularly good showings.

The index has lost 1.04% for the last five days but is virtually unchanged over the last 52 weeks.

Commodities were a bit more subdued during the day – palladium and platinum reversed some recent losses, up 2.45% and 2.83% respectively, while oil continued on its recent generally upward trend, adding 1.61% to West Texas crude.

Zinc and aluminium were the notable losses today, shedding 2.04% and 1.12%.

What’s in store for the big 7 tech stocks of 2023?

XTB research director Kathleen Brooks joins us to discuss the big seven tech stocks of 2023, and how they might fair in the year to come.

“The Magnificent 7 tech stocks were the big story of 2023. Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Nvidia, Meta and Microsoft (NASDAQ:MSFT) dominated financial markets and were integral to the direction of US and global stock markets,” Brooks wrote.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

“But will this be the case in 2024? Below we will take a look at what 2024 could have in store for mega tech, and how the Magnificent 7 could change in the coming months.

“Financial markets have been fairly directionless so far in January. Volatility has started to move higher as stocks and bonds retreated on the back of central banks pushing back on expectations for rate cuts. This has hurt the overall market.

“The S&P 500 was lower by 0.44% in the last week and has been down a touch since the start of the year. The S&P 500’s IT sector has fared better than the overall index, it is up 1.53% in the last week, and is 1.94% higher so far this year.

“The Magnificent 7 are an important part of the overall US index, but for indices like the FTSE 100, which has very little tech exposure, its performance has been even worse.

“The FTSE 100 is lower by 1.5% in the past week and is down by 3.59% YTD. Tech has had a good start to 2024 so far.”

Brooks points to several factors that will determine the success of these seven tech companies moving forward;

  • their ability to grow earnings in the year ahead;
  • the ability to leverage a disinflationary environment;
  • earnings performance; and,
  • a well-balanced price/earnings ratio - Microsoft, Apple and Tesla need to deliver stellar results to ensure their PE ratios are justified.

The AI question

“The AI theme was the hot topic of 2023, in 2024 this topic is still a major talking point; however, the focus is now on the monetisation of AI,” Brooks explained.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

“In the Magnificent 7 some are more exposed to AI than others. For example, Nvidia provides the chips needed to power the best AI models and Microsoft is a major stakeholder in OpenAI.

“Meta is also making a big push into AI, although its efforts are yet to bear meaningful fruit, Alphabet has made some inroads but is still lagging behind its rivals.

“Tesla has AI capabilities, but Elon Musk is facing a battle with the Tesla board to expand its efforts. Apple and Amazon have less focus on AI.

“Looking ahead, we believe that the biggest tech stocks with direct AI exposure could benefit the most from a continuation of the AI theme in 2024.

“The path of least resistance is for Microsoft and Nvidia to continue to dominate the AI space, and we think that this will pay off for these companies in the coming months.

“Nvidia has already had a stellar start to 2024. Its stock price is up by more than 13% so far this year, and by 4.5% in the last week, even though the broader market has been battered by a bout of volatility.

“This suggests that Nvidia is still in demand and has some defensive qualities that could help protect its stock price in periods of risk aversion. At the recent Computers and Electronics show in Las Vegas, Nvidia announced that its focus for 2024 was personal computing AI.

“This push into personal computing has cheered investors since it can be a big money spinner, just think of Microsoft and Apple in years gone by.

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

“Microsoft hasn’t performed as well as Nvidia so far in 2024, however it is higher by more than 4% so far this year and is up by 3.4% in the last week.

“It also overtook Apple as the world’s most valuable company. We think it managed to overtake Apple due to its exposure to AI.

“The chart below shows the stock price performance of the Magnificent 7 over the last year. The chart has been normalised to show how these stocks move together.

“As you can see, Nvidia, the yellow line, is leading the pack.

“Microsoft, the purple line, is trailing Nvidia along with the rest of the Magnificent 7, however, its stock price has turned higher, while the other tech giants are lower or moving sideways.

“As we move through 2024, we could see differentiation within the stock performance of the Magnificent 7, with Nvidia and Microsoft leading the way.”

Chart: Magnificent 7, normalized to show how they move together:

Source: Bloomberg.

“While AI is a theme within the tech sector that could drive robust individual performance for certain members of the Magnificent 7, the fate of other tech stocks could depend on the economy,” Brooks continued.

“Some Magnificent 7 stocks like Apple have defensive properties, such as massive cash piles. This means that if there is an economic downturn Apple and other tech stocks with defensive qualities could outperform.

“However, if the economy does have a soft landing as the Fed starts cutting interest rates in March or soon after, then it could allow the other more cyclical sectors in the S&P 500 to play catch up.”

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

The Five at Five

Imugene plans Phase 1 VAXINIA MAST trial expansion to target bile duct cancer

Imugene Ltd (ASX:IMU, OTC:IUGNF) plans to expand its Phase 1 metastatic advanced solid tumours (MAST) trial to target bile duct tumours, further advancing the evaluation of its novel cancer-killing virus CF33-hNIS (VAXINIA) following initial successes and a recent FDA Fast Track designation.

Read more

Island Pharmaceuticals advances with ISLA-101 study for Dengue with third cohort dosing

Island Pharmaceuticals Ltd (ASX:ILA) has dosed the third cohort of its single ascending dose study on ISLA-101, a drug candidate being repurposed for the treatment and prevention of dengue fever and other mosquito-borne diseases.

Read more

Andromeda Metals secures sales and distribution deal with IberoClays for kaolin products

Andromeda Metals Ltd (ASX:ADN) has entered into a binding sales and distribution agreement with Spain-based IberoClays SLU for its high-quality kaolin products in the Mediterranean market.

Read more

Cobalt Blue achieves 95% to 97% metal recoveries for Cobalt Nickel Refinery Project; secures WA Premier’s support

Cobalt Blue Holdings Ltd (ASX:COB, OTC:CBBHF) is accelerating its pursuit of the proposed Cobalt Nickel Refinery Project in Western Australia, with initial test results and government support solidifying the project's potential.

Read more

Provaris Energy welcomes independent findings for Scottish Government on hydrogen production pathways

Provaris Energy Ltd (ASX:PV1, OTC:GBBLF) has welcomed an independent report produced by ClimateXChange and ARUP for the Scottish Government, which confirms the cost-effectiveness of the company’s hydrogen production pathway.

Read more

On your six

Aura Energy on brink of uranium production with market at 16-year highs

3rd party Ad. Not an offer or recommendation by See disclosure here or remove ads .

Aura Energy Ltd (ASX:AEE, AIM:AURA) is a uranium and future metals explorer and developer on the cusp of becoming a fully-fledged producer.

At present, the company’s primary focus is the Tiris Uranium Project in Mauritania, Africa, which is quickly approaching production status.

Read more

One to watch

Imugene achieves ‘complete response’ with mid dose cancer trial

Imugene Ltd (ASX:IMU, OTC:IUGNF) CEO Leslie Chong joins Jonathan Jackson in the Proactive studio this morning to discuss encouraging results from the company’s Phase 1 Metastatic Advanced Solid Tumours trial, evaluating the safety and efficacy of its novel cancer-killing virus CF33-hNIS (VAXINIA).


Read more on Proactive Investors AU


Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.