AUS
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Highlights
- The ASX is projected to decline by 0.4% as the final quarter of the year begins.
- Several ASX small caps, including Walkabout Resources and Lunnon Metals, are showing promising developments.
- Global market trends indicate mixed performance, with the S&P 500 experiencing its longest winning streak since 2021.
As the final quarter of the year kicks off, the ASX appears set for a decline. At 8 AM AEST, the SPI ASX200 futures contract pointed down by 0.4%, indicating a cautious start for Australian investors.
In contrast to the ASX, the U.S. markets showed some resilience overnight. The S&P 500 gained 0.4%, marking its longest winning streak since 2021. The blue-chip Dow Jones inched up by 0.04%, while the tech-heavy Nasdaq saw a 0.38% increase.
Emily Bowersock Hill from Bowersock Capital commented, “We expect the fourth quarter to be quite similar to the third quarter – elevated volatility, but with a strong finish.”
Key Insights from the U.S. Federal Reserve
In a recent speech, Federal Reserve Chair Jerome Powell provided a boost to the markets by highlighting the strength of the U.S. economy and a solid job market. Powell indicated that inflation seems to be stabilizing towards the target of 2%, but he did not commit to imminent rate cuts. "We’re not locked into any plan just yet. There are risks on both sides, and we’ll be making decisions as we go," Powell stated.
Attention now turns to Friday's employment report in the U.S., which is expected to influence future interest rate decisions.
Market Developments
In the world of stocks, automaker Stellantis experienced a significant drop of 12.5% after issuing a warning regarding its North American business, which negatively impacted other automotive stocks. In contrast, Meta Platforms Inc. enjoyed a nearly 1% increase following an analyst's revision of its price target from US$570 to US$620.
Boeing, meanwhile, faced ongoing challenges as a factory worker strike enters its third week with stalled negotiations, causing shares to decline by 2.75%. Nvidia also faced a setback, dropping 2% before rebounding, amid reports that Beijing is encouraging local companies to purchase chips from domestic manufacturers instead of Nvidia's popular GPUs.
Australian Economic Indicators
Back in Australia, attention is directed towards the August retail sales data, which is anticipated to reflect ongoing stability in the economy, according to AMP economist Shane Oliver.
Notable Small Caps on the ASX
Several ASX small caps are making headlines today:
- Walkabout Resources (ASX:WKT): The company has reported a significant increase in sales orders for September, totaling 800 tonnes of graphite concentrate from new customers in China and India. The CEO highlighted this as a key milestone in establishing Lindi Jumbo as a reliable source of high-quality graphite.
- Perpetual Resources (ASX:PEC): Exploration at the Isabella Lithium Project confirmed multiple spodumene-bearing pegmatite trends. Preliminary rock chip results are expected in the coming weeks.
- Lunnon Metals (ASX:LM8): New gold zones were identified at the Lady Herial prospect, with significant high-grade findings. This site is considered a crucial focus for the company.
- Loyal Lithium (ASX:LLI): The discovery of a new spodumene pegmatite dyke at the Trieste Lithium Project offers promising potential for further mineralized discoveries.
- Biome Australia (ASX:BIO): The company achieved record sales revenue of approximately $4.25 million for the first quarter of FY25, marking a substantial increase compared to the previous year.
As the market navigates the start of the final quarter, developments in both the U.S. and Australia will continue to shape investor sentiment and expectations.
