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The morning catch up: ASX to rise ahead of inflation data this morning

Published 28/02/2024, 09:47 am
© Reuters.  The morning catch up: ASX to rise ahead of inflation data this morning
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The Australian share market is set to open higher this morning — the ASX SPI futures were up 21 points or 0.27% at 9am AEDT.

This follows a mixed session on Wall Street overnight as US investors await key economic information later this week.

The US consumer confidence index fell from 110.9 to 106.7 in February, against expectations of a rise to 115. The Federal Reserve is due to provide an update on its preferred inflation gauge — the personal consumption expenditures (PCE) index — on Thursday.

Locally, earnings season continues today with 42 of the ASX 200 companies having reported earnings so far. Today’s releases include earnings updates from Flight Centre (ASX:FLT) and Worley.

The ABS is set to release January inflation data today at 11:30am AEDT. Expectations are for a 3.6% rise on-year versus 3.4% in December.

What happened overnight?

Here’s what we saw (source CommSec):

US markets

US sharemarkets were mixed on Tuesday ahead of US inflation and other economic data that could shed light on the possible timing of a US Federal Reserve interest rate cut.

Chevron (NYSE:CVX) and Hess fell between 1.5% and 3.1% after Exxon Mobil (NYSE:XOM) said it was considering a move that could break up the companies' US$53 billion merger and increase its share of Guyana's giant offshore oil reserves.

Viking Therapeutics (NASDAQ:VKTX) surged 121% following a weight loss drug trial success. But Amgen (NASDAQ:AMGN), which is developing a weight loss drug, dropped 2.8%, pressuring the Dow Jones.

A bullish outlook from Norwegian Cruise Line pushed its shares 19.8% higher.

Retail giant Macy's (NYSE:M) jumped 3.4% after announcing it would close around 150 of its struggling stores after reporting a revenue miss in the prior quarter. Lowe's gained 1.8% after posting an earnings beat. Zoom Video soared 8% following earnings reports that exceeded Wall Street expectations.

European markets

European sharemarkets were little changed on Tuesday as investors awaited this week's US inflation data that could shed some light on when interest rate cuts might commence this year.

Basic resources stocks rose by 1.7%, recovering from Monday's four-month low, tracking higher metal prices. Tech stocks jumped 1% to its highest level since December 2000. Media stocks fell 1.2%.

Currencies

Currencies were weaker against the US dollar in European and US trade.

  • The Euro fell from US$1.0865 to US$1.0832 and was near US$1.0845 at the US close.
  • The Aussie dollar slid from US65.57 cents to US65.31 cents and was near US65.45 cents at the US close.
  • The Japanese yen eased from 150.12 yen per US dollar to JPY150.57 and was near JPY150.50 at the US close

Commodities

Global oil prices rose more than 1% on Tuesday as sources said OPEC+ is considering extending voluntary oil output cuts into the second quarter to provide additional support.

  • The Brent crude price rose by US$1.12 or 1.4% to US$83.65 a barrel.
  • The US Nymex crude price gained US$1.29 or 1.7% to US$78.87 a barrel.

Base metal prices rose on Tuesday, lifted by hopes that next week's annual parliamentary meeting in China will set the path for further economic stimulus.

  • Copper futures gained 0.2%.
  • Aluminium futures added 0.1%.

The gold futures price rose by US$5.20 or 0.3% to U$2,044.10 an ounce on Tuesday. Spot gold was trading near US$2,030 an ounce at the US close.

Iron ore futures slid US27 cents or 0.2% to US$125.84 a tonne, despite reports that India is considering a potential export tax on low-grade iron ore.

What’s on today?

In Australia, the monthly consumer price index (CPI) indicator is released with construction work done data.

  • Flight Centre, Harvey Norman, Kelsian, Light & Wonder, NextDC, Perpetual, Spark NZ, Steadfast, Strike Energy and Worley all release earnings.
  • Beach Energy (ASX:BPT), EVT, Fortescue (ASX:FMG), Lottery Corp, Telstra and Woolworths shares trade ex-dividend.

The Reserve Bank of New Zealand (RBNZ) hands down its policy decision.

US economic growth (GDP) data is due tonight with the advance goods trade balance and wholesale inventories. Paramount Global (NASDAQ:PARA), Salesforce and Snowflake issue earnings.

On the small cap front

The S&P ASX Small Ordinaries lost 0.34% yesterday, while the ASX 200 finished 0.13% higher.

You can read more about the following throughout the day.

  • Artemis Resources Ltd (ASX:ARV, AIM:ARV, OTCQB:ARTTF) is undertaking a detailed strategic review of its Paterson Gold Project in Western Australia that has identified a new priority copper-gold target.
  • Accelerate Resources Ltd (ASX:AX8) has completed the sale of two non-core exploration licences to Fortescue for $300,000 cash, plus a milestone payment of $500,000 cash upon Fortescue commencing mining.
  • Brookside Energy Ltd (ASX:BRK, OTC:RDFEF) has successfully spudded three of the four planned Flames-Maroons Development Plan (FMDP) wells in the core of the southern SCOOP Play in the Anadarko Basin.
  • Genetic Technologies Limited (ASX:GTG, NASDAQ:GENE, OTC:GNTLF) has launched a wide-reaching customer-targeted digital advertising campaign in the United States to drive consumer-initiated testing for its geneType risk assessment tests.
  • Azure Minerals Ltd (ASX:AZS, OTC:AZRMF) says all competition law approvals have been obtained for the proposed acquisition of 100% of the shares in Azure by SH Mining.
  • Read more on Proactive Investors AU

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