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The morning catch up: Tech stocks continue to break US records; ASX to open up; RBA expected to keep rates steady

Published 18/06/2024, 09:52 am
© Reuters.  The morning catch up: Tech stocks continue to break US records; ASX to open up; RBA expected to keep rates steady
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Expectations are that the Australian share market will have a lively opening this morning in keeping with its US counterpart.

ASX futures were up 0.4% to 7,743 points early this morning.

In the US overnight the benchmark S&P 500 was driven to a fresh record high by, you guessed it, the robust performance of megacap technology stocks, despite a significant increase in US bond yields.

The Dow Jones index rose 189 points or 0.5%, the S&P 500 index gained 0.8% to a record closing high and the Nasdaq index added 168 points or 1%.

Megacaps continue to rise

Leading the charge were megacaps Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA), which rose 2% and 5.3%, respectively.

The Philadelphia SE Semiconductor index ascended 1.6% to a new all-time high.

Nvidia ended 0.7% lower after hitting a record high earlier in the session, as State Street (NYSE:STT) indicated the chipmaker might constitute more than 20% of its tech exchange-traded fund's weighting.

Super Micro Computer soared 5.1%, Broadcom (NASDAQ:AVGO) gained 5.4% and Micron Technology (NASDAQ:MU) jumped 4.6% following price-target increases from brokerages.

Traders are bracing for key data on US retail sales and multiple speeches from US Federal Reserve officials.

All eyes on the RBA

The rate wobbles are starting to subside, with the Reserve Bank of Australia widely expected to keep the cash rate at 4.35% at the conclusion of its two-day policy meeting.

The current economic indicators and forecasts, along with a raft of economic experts, suggest that the bank will stay its hand.

That said, the bank will probably maintain its position that ‘nothing is ruled out’ in terms of the rate horizon, and the ongoing global theme of services inflation will keep observers on our toes.

Europe cruises

European sharemarkets remained relatively unchanged on Monday. French stocks climbed 0.9% after a significant drop last week due to political uncertainties.

The continent-wide FTSEurofirst 300 index edged up 0.1% while the UK FTSE 100 index dipped 0.1%.

The banking sector advanced 1%, recovering from an 8% slump last week, while technology stocks saw a 0.5% gain after a nearly 2% drop.

Conversely, the healthcare sector led the declines, falling 1%, and miners shed 0.7% as most metal prices dipped following weaker-than-expected industrial output data from China.

Italian EU-harmonised consumer prices rose 0.2% month-on-month in May and 0.8% year-on-year, aligning with expectations.

Currencies and commodities

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

The Euro rose from US$1.0685 to US$1.0736, the Australian dollar increased from 65.85 US cents to 66.16 US cents and the Japanese yen eased from 157.15 yen per US dollar to JPY157.95.

Global oil prices surged nearly US$2 a barrel on Monday, reaching their highest settlement levels in over a month as investor optimism about demand grew.

Brent crude rose US$1.63 or 2% to US$84.25 a barrel, and US Nymex crude added US$1.88 or 2.4% to US$80.33 a barrel.

Base metal prices slipped with copper futures shedding 0.6% to eight-week lows following weak industrial data from China and aluminium futures also falling 0.6%.

Gold futures fell US$20.10 or 0.9% to US$2,329 an ounce on Monday, stung by higher US Treasury yields.

Spot gold was trading near US$2,319 an ounce at the US close.

Iron ore futures fell 28 US cents or 0.3% to US$107.05 a tonne yesterday following economic data from China, which undershot expectations.

What’s happening in small caps?

On the small cap front, which you can read more about throughout the day on Proactive:

  • St George Mining Ltd (ASX:SGQ) has made further exploration progress at C1 – a high-priority target for a potential mineralised late-stage intrusion – at the Destiny Project in the Eastern Goldfields region of Western Australia.
  • Iondrive Ltd (ASX:ION) is making progress towards completion of its pre-feasibility study (PFS) to develop an exclusively licensed deep-eutectic solvent (DES) battery recycling technology, with the final key activities about to start.
  • Yandal Resources Ltd (ASX:YRL) has received all assay results from the eighteen holes completed across the Oblique Prospect, part of a larger 4,500-metre program across both the Oblique and Quarter Moon prospects, part of the broader Ironstone Well– Barwidgee Gold Project.
  • Silver Mines Ltd (ASX:SVL, OTC:SLVMF) has news about exploration drilling activities and recent assays from the Bowdens Silver Project, 26 kilometres east of Mudgee in Central West NSW.
  • Maximus Resources Ltd (ASX:MXR, OTC:MXRRF) has kicked off the second phase reverse circulation (RC) drill program at the company’s 100% owned Wattle Dam Gold Project, 25 kilometres from Kambalda, WA.
  • Read more on Proactive Investors AU

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