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The morning catch up: ASX set to rise despite subdued US session; oil prices rise with all eyes on OPEC+ meeting

Published Nov 30, 2023 09:57 Updated Nov 30, 2023 10:30
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© Reuters The morning catch up: ASX set to rise despite subdued US session; oil prices rise with all eyes on OPEC+ meeting
 
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ASX Futures are predicting a 31.5-point or 0.45% lift in early trading today, despite mixed trading in the US session that mostly pushed the markets down.

Falling US Treasury 10-year bond yields buoyed the market as Pershing Capital founder Bill Ackman said his company was “betting that the Federal Reserve is going to have to cut rates more quickly than people expect”.

On the other hand, Federal Reserve Bank of Richmond President Thomas Barkin expressed scepticism that the central bank’s tightening cycle was at an end. Barkin's remarks kept the possibility of further rate hikes in play, should inflation re-escalate.

Salesforce, the renowned software company, saw its shares climb 2.4% in anticipation of its earnings announcement.

Automotive giant General Motors (NYSE:GM) reported a substantial 9.4% increase in share value, buoyed by news of a US$10 billion share buyback plan and a significant 33% dividend increase.

NetApp (NASDAQ:NTAP), a cloud data services provider, experienced a surge of 14.6% following an earnings beat.

In the energy sector, Phillips 66 (NYSE:NYSE:PSX)'s stock jumped 3.6% after Elliott Investment Management acquired a US$1 billion stake in the company.

Cybersecurity firm CrowdStrike's shares lifted 10.4% on forecasts of fourth-quarter revenue surpassing market expectations.

However, Tesla (NASDAQ:TSLA)'s shares declined by 1.1% as the market anticipated its Cybertruck delivery event.

Major tech players such as Meta Platforms, Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) experienced falls ranging from 0.5% to 2%.

The Dow Jones index saw a marginal increase of 13 points or less than 0.1%, while the S&P 500 index declined by 0.1%, while the Nasdaq index fell by 23 points or 0.2%.

US economic data and European markets

In US economic data, the Gross Domestic Product (GDP) recorded a 5.2% annual growth rate in the September quarter, exceeding expectations and marking the fastest expansion since the fourth quarter of 2021.

US government bond yields declined as recent economic growth data did not significantly alter market expectations of a potential US Federal Reserve rate cut.

The US 10-year Treasury yield fell by 7 points to 4.27% and the US 2-year Treasury yield decreased by 9 points to 4.65%.

The Fed's Beige Book indicated a slowdown in economic activities recently as consumer spending on non-essential items decreased.

European share markets ended predominantly on a positive note.

Auto stocks led the gains, rising by 2.4%, while energy shares fell by 0.9%.

German inflation, on an EU-harmonized basis, showed a deceleration from 3% in October to 2.3% in November, marking the slowest pace since June 2021. This was lower than the anticipated 2.5%.

Germany's benchmark index ascended 1.1% to a four-month high, and the FTSEurofirst 300 index rose by 0.4%.

However, the UK's FTSE 100 index dipped 0.4% following remarks by Bank of England Governor Andrew Bailey, who emphasised the central bank's commitment to reducing inflation to its 2% target.

Currencies and commodities

The US dollar strengthened against major currencies in both the US and European markets.

The Euro moved from US$1.1003 to US$1.0959 and was trading near US$1.0970 at the US market close.

The Australian dollar also saw a decrease, falling from US66.53 cents to US66.06 cents, and was near US66.15 cents at the US close.

In Japan, the yen showed a slight weakening, moving from 146.95 yen per US dollar to JPY147.87, and was around JPY147.30 at the US market close.

Global oil prices saw an almost 2% increase on Wednesday, reversing almost a month of unsteady declines.

Market focus was predominantly on the forthcoming OPEC+ output policy meeting, overshadowing the rise in US crude, gasoline, and distillate stockpiles.

According to government data, US crude inventories rose by 1.6 million barrels last week, reaching their highest level since July.

Brent crude oil price rose by US$1.42 or 1.7% to US$83.10 per barrel, while US Nymex crude oil price increased by US$1.45 or 1.9% to US$77.86 per barrel.

Base metal prices, however, fell. Copper futures dropped by 0.4%, influenced by ongoing concerns about economic conditions in China, a leading metal consumer. Aluminium futures also declined by 0.4%.

Contrasting this downward movement, gold futures price surged by US$27.10 or 1.3% to near seven-month highs of US$2,067.10 an ounce. Spot gold was trading near US$2,043 an ounce at the US close.

Iron ore futures experienced a minor fall, decreasing by US2 cents or less than 0.1% to US$130.38 a tonne.

On the small cap front

The ASX Small Ordinaries gained a solid 28.5 points or 1.06% in trading yesterday, beating the ASX200’s 0.34% gain.

You can read about the following and more throughout the day.

  • Lightning Minerals Ltd (ASX:L1M) confirmed the presence of a more than 100 parts per million lithium drill target at the Dundas South Project, which the company will drill test in early 2024.
  • Firebird Metals Ltd (ASX:FRB, OTC:FRBMF) has established and registered its Chinese subsidiary following strong results from its China-based battery-grade manganese sulphate scoping study, and has secured an agreement for patented crystallisation technology.
  • Elixir Energy Ltd (ASX:EXR)’s Daydream-2 well at the Grandis Gas Project has intersected the primary target Kianga Formation ahead of schedule, with the first gas peak measuring 777 units.
  • Helix Resources Ltd (ASX:HLX) has intersected new copper mineralisation at the Bijoux copper prospect, observing visual mineralisation of up to 25 metres of oxide copper mineralisation, thus far untested by assay.
  • Great Boulder Resources Ltd (ASX:GBR) has signed a heads of agreement for an option to acquire 75% of Castle Minerals’ Polelle and Wanganui gold projects at Meekatharra, effectively doubling the company’s footprint in Meekatharra to 384 square kilometres.
  • Read more on Proactive Investors AU

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    The morning catch up: ASX set to rise despite subdued US session; oil prices rise with all eyes on OPEC+ meeting
     

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