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Highlights
- ASX futures indicate potential for record highs after tech gains in the US.
- Woolworths faces operational challenges amid ongoing strikes.
- Collins Foods reports lower profits due to cautious consumer spending.
The Australian share market is poised for a promising opening, with ASX SPI 200 Futures reflecting an increase of 63 points, signaling optimism after a tech-led rally in the US. Historically, December has been a favorable month for stocks on the ASX, supported by an average growth trend over several decades.
Challenges for Woolworths (ASX:WOW)
Woolworths is navigating the impact of significant strikes at its distribution centers across Victoria and New South Wales. These strikes, ongoing since late November, have resulted in a $50 million reduction in food sales. The dispute stems from the United Workers Union’s (UWU) demand for a substantial wage increase over three years, alongside the removal of enforceable performance standards.
Despite Woolworths’ latest proposal to raise hourly rates well above the industry benchmark, the strike remains unresolved, disrupting supply chains and operations. Woolworths CEO has called for mutual respect as negotiations continue.
Profit Pressures for Collins Foods (ASX:CKF)
Collins Foods, the operator of hundreds of KFC outlets across Australia and Europe, has reported a significant profit decline for the half-year ending October. Weak economic conditions and restrained consumer spending have impacted fast-food sales. The company has also adjusted its dividend payout in response to these challenges.
Global Market Recap
Overseas markets provided a mixed picture. The Nasdaq and S&P 500 indexes in the US hit record highs, driven by gains in technology stocks such as Tesla and Apple. Meanwhile, European share markets rose modestly, with the FTSEurofirst 300 index climbing during Monday's session.
Commodities and Currencies Update
In commodity trading, oil prices remained steady, reflecting optimism around China's factory activity offset by concerns over US Federal Reserve policy. Gold prices, however, retreated as the US dollar strengthened, while base metals saw modest declines.
The Australian dollar softened against the US dollar, mirroring broader currency market trends amid cautious trading ahead of pivotal economic data releases.
Spotlight on Small Caps
Predictive Discovery (ASX:PDI) has announced progress at its Bankan Gold Project in Guinea, extending mineralization at the 800W target. The company plans to release a maiden Mineral Resource estimate for this satellite deposit in early 2025. Meanwhile, Alto Metals (ASX:AME) finalized its acquisition by Brightstar Resources (ASX:BTR), with trading in Alto shares now suspended. Shareholders are set to receive new Brightstar shares as part of the scheme of arrangement.
