ASX News LIVE| XJO Uncertain as Wall St Ends 9-Week Bull Run, MidEast and Rate Cuts Top Concern in Markets

The ASX 200 closed down -0.50% at 7,451.4 after holding above breakeven in the morning.

With the Christmas rally looking out of steam, it’s been a slow start to the new year for global markets. All 11 sectors were down today, with Energy the best performer at -0.03%.

But there have been some bright sparks in the losses. The ASX debut of Kali Metals was certainly one today. With the price opening at 25 cents, the stock gained 80% today, closing at 45 cents.

Uranium stocks also were top performers today, with Paladin Energy up 3.70% and Boss Energy gaining 8.75%.

The weaker day was largely due to stronger-than-expected Job numbers in the US for December.

Forecasts were for around 170k new jobs, but the number came in well above, with 216k new non-farm payroll jobs.

With the unexpected strength of the US jobs and economy, many traders cut back their expectations of earlier rate cuts, while bond traders are now pricing in five cuts rather than six in 2024.

In Australia, the bond market had fully priced in an RBA rate cut in September from its previous June and put a 50% chance of a follow-up cut in December, down from a 100% chance.

Recently IPO’d company Kali Metals [ASX:KM1] has rocketed up by 68% in its first-day trading.

The company, which became a rich lister favourite after its IPO closed in less than 20 minutes and was oversubscribed, has ignited hopes in lithium spodumene prices returning to their former glory and Australia becoming a hot spot for production.

Kali holds large swaths of land in known lithium-rich areas of Kalgoorlie and Norseman, the same area where Mineral Resources operates. Former MinRes director Tim Roberts is actually one of the billionaire investors who joined the IPO launch with a strong belief that the area’s riches will be replicated on the unexplored land.

As Kali managing Director Graeme Sloan put it:

‘Each of our WA projects is within a bull’s roar of existing lithium mines and advanced lithium projects, and that sparked a lot of interest,’ he said.

 

‘We took the view that $15 million was enough to fund two years of really solid exploration.’

Metcash [ASX:MTS] has announced today the appointment of former Premier Investments CEO Richard Murray to run Metcash’s hardware chain Total Tools.

Richard Murray, former JB Hi-Fi CEO, will replace Paul Dumbrell as CEO of the hardware chain, which Metcash recently acquired.

MTS paid $101.5 million last year to buy the final 15% of Total Tools, which is the largest professional hardware chain in Australia.

Metcash has held a majority stake in Total Tools since 2020 and has seen the company revenue increase from $585 million to $1.09 billion and expand its stores to 110 around Australia.

Metcash Groups CEO Doug Jones said Mr Murray had ‘a huge passion for the sector and Total Tools’, calling him a DIY enthusiast.

Shares in Metcash are up by 0.86%, trading at $3.53 per share this afternoon.

Here are some interesting GDP growth forecast numbers from a sharp quant from Europe.

It’s interesting that it’s showing the Eurozone holding despite woeful statistics coming out of Germany, which has now plummeted in global competitiveness and has struggled to shrug off rising power prices after its mass closing of Nuclear power plants.

Source: Nikolay Kolarov – EU Commission

🇪🇺 Consensus forecasts for 2024 show real growth in Europe will likely remain anemic in the context of a global slowdown. Though the US might once again surprise us this year… pic.twitter.com/F0D5lk78C2

— Nikolay Kolarov, CFA (@libertniko) January 6, 2024

I’ve shared this here before but this is the first time in 2024 and its worth another look to see whats changed.

The Bloomberg 12 Global Indicators shows just how poorly Germany and China are doing, while highlighting the remarkable resistance of the US economy.

Another thing to keep an eye out for is the topping of South Korean Exports, this will be a key indicator to watch for the US technology stocks as these exports are a good proxy for semiconductor sales.

Do these indicators make you feel bullish or bearish?

The ASX 200 sits just above open today, up 0.13% at 7,498.6, as the main movement comes from Uranium stocks, which have continued their bull run as structural shortages in supply combine with the increasing sentiment that nuclear is a necessary option for our future energy mix.

This was highlighted earlier today when the UK government announced plans to spend £300 million on a new high-tech nuclear plant, the first fourth-generation plant in Europe.

Uranium miner Boss Energy [ASX:BOE] is the main one to watch today, up by 8.63% around midday, trading at $4.60 per share.

Meanwhile, Paladin Energy [ASX:PDN] has also gained 4.43% to trade at $1.06 per share.

Other stocks to watch today are Red 5 [ASX:RED] , which is up 6.25% after an update today where is said it was on track to meet the upper range of its production guidance for FY24. This is after another strong quarter of production from its King of the Hills Project in WA.

Good morning. Charlie here

The ASX 200 opened flat at 7,491.6 as US markets closed flat overnight as stronger-than-expected job numbers for America cut down traders’ hopes for earlier rate cuts.

The ‘good news is bad news’ trend appears back in form as traders were forecasting a Goldilocks zone of around 170k new jobs for December, which is not great but not terrible.

Instead, December’s numbers were 216k new non-farm jobs, which shows the US may be pulling off the soft landing. This meant bond traders slashed their bets of cuts this year from six to five as rhetoric from the Fed has been for a more cautious approach to cutting rates.

My take on this is that unless those job numbers start looking very sick, I would expect fewer rate cuts and later than the market hopes.

Bulls are arguing that rate cuts are coming far sooner than the Fed is predicting, while the Fed is attempting to maintain a bulwark of consistent strong messaging to say cuts aren’t coming any time soon.

Wall Street: Dow flat, Nasdaq flat, S&P 500 +0.18%.

Overseas: FTSE -0.43%, STOXX -0.23%, Nikkei +0.27%, SSE -0.85%

The Aussie dollar rose +0.07% to US 67.13 cents.

US 10-year bond yields +5bps to 4.05%.

Australian 10-year bond yields +12bps to 4.17%.

Gold fell -0.08% to US$2,044.04. Silver fell -0.31% to US$23.12.

BTC rose +0.25% to US$43,983, while Ethereum fell by 0.53% to US$2,223.

Oil Brent rose +1.6% to US$78.82, while WTI Crude rose +2.48% to US$73.98.

Iron ore fell -1.8% to US$138.65 a tonne.

It seems Iron ore futures are hoping for another round of stimulus in China’s struggling property sector as Beijing officials struggle to find any other levers to pull to stimulate their lop-sided economy.