ASX News LIVE | XJO Set for Volatile Day as Wall St Worries Continue; Bitcoin Surges as Bond Pressure Eases Slightly

Australian markets surprised many today, finishing up 0.19% at 6,856.9 after a volitle day of trading that was down around midday. The sectors were evenly split today with six sectors down and five in the green today.

Biggest gainers were Energy (+0.39%) and Materials (+0.85%) sectors, while Staples (-1.02%) and Utilities (-0.51%) were down with heavy losses in the sector.

Consumer staples giants took hits today, with Coles down -1%, Woolworths falling -1.1%, and Endeavour fell -1.38%.

The Energy sector tracked oil prices today, with Brent gaining +0.77% to US$90.52, while WTI Crude fell -0.63% to US$86.03.

In company moves today;

The biggest gainer on the ASX 200 was Arafura Rare EARTHS which gained +15.79% as investors viewed increasingly hostile trade moves by China to restrict critical minerals.

Wildcat Resources (+15.52%) also continued to climb after yesterday’s news of incredible lithium intercepts at its Tabba Tabba project.

Buy now pay later company Zip (+6.67%) had a good day in the markets, after its quarterly report showed Quarterly revenue of $204.4 million, up 32% YoY.

Bitcoin was the big winner on the day, gaining a stunning 12% to finish at US$34,456, well above the 30k mark that it passed just yesterday. This was in part thanks to optimism that the SECs court failures will mean that Bitcoin ETF’s are just around the corner.

Gold is up 0.11% at US$1,975.76 after its burst of safe haven inflows seen on Friday last week began to ebb.

RBA Governor Michelle Bullock is scheduled to give a speech at 7pm tonight (AEDT), her first prepared speech in the role. Many are looking closely at the speech plus tomorrows CPI data which is due out at 11:30am tomorrow (AEST) to determine the RBA’s next interest rate moves.

Tonight we will also see quarterly results from Alphabet and Microsoft and later from the week we will see the rest of the Magnificent Seven report earnings.

So far the U.S. earnings season has failed to impress traders.

Chevron Corporation’s monumental $53 billion acquisition of Hess Corporation appears solely for a slice of its 11 billion barrels of oil located off the coast of South America.

This deal grants Chevron a 30% stake in Guyana’s Stabroek Block, home to the world’s largest crude discovery in the past decade and one of the most lucrative.

The deal helps Chevron narrow the gap with its larger US rival, Exxon Mobil, which owns 45% of the block, while China’s CNOOC Ltd. owns the remaining 25%.

Chevron’s willingness to pay a premium for Hess, even after its shares nearly doubled last year, highlights the determination of major US oil companies to secure low-cost oil supplies for the long term.

Guyana is appealing not only due to the magnitude of its discoveries but also because of its remarkably low breakeven costs, making it one of the most attractive locations for new offshore developments globally.

Guyana’s oil production is poised to triple to 1 million barrels per day by the end of the decade. This rapid expansion positions the country, with a population of 800,000, on par with OPEC-member Angola and makes it one of the most resource-rich countries per capita globally.

Arafura [ASX:ARU] shares are up 13.16% today as the Rare Earth Mineral starts the journey of turning around its slow slide this year.

Shares are down 30.65% in the past 12 months as the focus has shifted away from these critical minerals to others. Now, with China’s latest moves, the market is reconsidering the importance of supplies of critical minerals that are outside of China.

Arafura’s primary products from the Nolans project are rare earths. They are used in catalytic converters in automobiles, consumer electronics, energy-efficiency lighting, optics, super alloys, advanced ceramics and high-strength permanent magnets.

The latter are found in automotive applications such as drive traction motors, electronic power steering motors, wind turbine generators, robotics, speakers, mobile phones, and other products.

Here are the market segments that rely on these rare earths.

Source: ARU

Here is a great graph showing what the U.S. is seeing as the critical minerals for the next decade in attempting to shift our energy systems.

With the latest export restrictions from China covering more of this list, it’s worth keeping an eye on where these shift to next.

Most of the critical list are major components in modern batteries and semiconductors, but others could be our future fuel sources post-oil.

Over the next decade, the US sees rising importance and higher supply risk for:

– lithium
– nickel
– graphite and more

12 items in total.

In 2011 the list included just 5 REEs.

📊 @mining pic.twitter.com/hnLpFOZIwa

— Paola Rojas 🐝 (@paola_rojas) October 23, 2023

 

The ASX 200 is flat around midday; after a positive morning of trading, things have turned down. Technology benchmark XTX is now down -0.40% while All Ords is also flat.

Seven sectors are down, while four remain in the green heading into the afternoon. Energy (+0.33%) and Telecom (+0.25%) Sectors are the best performers so far today with energy stocks bouncing off big drops yesterday, while Telstra (+0.66) and TPG (+0.95%) are carrying the Telcos this today.

The biggest gainer today remains Syrah Resources, up +13.33% after positive momentum in response to China’s graphite export restrictions.

Markets are awaiting crucial inflation data for Australia coming tomorrow and a slew of data from the U.S., including third-quarter GDP and personal consumption, to gauge the country’s strength.

Graphite stocks have surged since China announced an export ban on the critical battery mineral.

Over the weekend, China put in place the requirement of export permits for key graphite products to ‘protect national security’, its commerce ministry said.

As a response, major Australian graphite producers like Syrah Resources [ASX:SYR] have surged, with SYR up 83% in the past week alone. Talga [ASX:TLG] has also seen strong gains today, up 10%, as they become potential major players in Western EV battery production.

China is the world’s top producer of graphite, a key ingredient in EV battery anodes and other essential lithium-ion batteries. China produces around 90% of the world’s graphite and significantly refines and produces the particular spherical graphite used in a battery’s negatively charged portion.

This comes at a time when China is stepping up efforts to compete on the international stage in the EV market space, with many of its models drastically outcompeting the likes of Tesla in terms of price as its costs are considerably lower and its manufacturers benefit from vast subsidies.

The EU is considering levying tariffs, targeting these Chinese-made EVs that they claim unfairly benefit from subsidies and are cost-competing with its European rivals. The U.S. has also fired another salvo in the trade war, expanding its ban on advanced chips to include Nvidia’s latest AI chips, the A800 and H800, for training advanced AI.

China’s move is not a complete ban. Still, it is seen as a significant restriction that could be selectively tuned up and down without facing major headlines as it restricts individual miners on the mainland.

Bitcoin’s rally past US$30K continued overnight as investors were optimistic the first Blackrock Bitcoin exchange-traded fund would be approved after the Securities and Exchange Commission (SEC) faced a series of setbacks in court in recent weeks.

A US federal appeals court on Monday formalized a victory for Grayscale Investments LLC in its bid to create a spot Bitcoin ETF over objections from the SEC.

That is not 100% of the approvals required before it can be launched, but for many, that was the hardest hurdle facing the creation of BTC-related ETFs, opening the door for investors.

That was enough to get investors excited and run a wave of optimism that has seen BTC spike 10% and then pair off over half of those gains.

It currently sits up 3.81% this morning at US$ 32,807

Good morning all, Charlie here

The ASX 200 opened up +0.33% to 6,868.9, surprising investors as future markets turned just before open, as the ASX Tech benchmark XTX leads up.

Expect a volatile day of trading as similar moves were seen in the US markets overnight due to large volatility in the bond markets.

US 10-year bond yields moved over 17bps overnight in one of the most volatile days seen in years. Bonds eased after Bill Ackman of Pershing Square acknowledged he covered his bet against long-term treasuries.

“There is too much risk in the world to remain short bonds at current long-term rates,” Ackman said in a post on X on Monday morning. “We covered our bond short”.

Wall Street: The Dow -0.58%, Nasdaq +0.27%, S&P 500 –0.17%, Russell 2000 -0.89%.

Overseas Markets: FTSE -0.37%, STOXX +0.42%, Nikkei -0.83%, SSE -1.47%

Gold prices fell, down -0.42% to US$1,973.32. Silver fell -1.78%.

Oil prices fell again as global economic growth concerns overshadowed the Middle East concerns. JPMorgan said that ‘demand destruction will outweigh wider Mideast conflict in oil markets’

Brent Crude is down -0.75%, at US$90.50, while WTI crude is down -0.62% at US$86.02

Iron Ore is down slightly to US$118.45.

Bitcoin made huge moves this morning, up +10.65% to US$33,113.25 as markets look for safe havens in the midst of debt crises and uncertainty.

The Aussie dollar is up +0.37%, to US63.35 cents, around values seen in November last year.