Note from the MD: ASX tipped to rise despite abrupt end to Wall Street’s winning streak

Investors are feeling optimistic this morning with futures markets pointing towards a 20-point gain (0.3%) on the ASX despite inflation fears putting an end to Wall Street’s recent upward momentum overnight.

Investors are feeling optimistic this morning with futures markets pointing towards a 20-point gain (0.3%) on the ASX despite inflation fears putting an end to Wall Street’s recent upward momentum overnight.

US markets had been on a tear lately, with the S&P 500 index hitting record highs over eight consecutive days before a lift in the producers’ price index yesterday became the stumbling block that ended the run.

The higher producer prices are tipped to flow into consumer prices, which will be captured in the US CPI print later this week.

No doubt those figures will be of interest to investors, with some analysts expecting more declines on the cards before an end-of-year influx of new capital into markets pushes things back up.

And hopefully, businesses that experience some of these wild swings are in a position to keep their share registry informed of any material changes.

The leading ASX 200 index (ASX: XJO) didn’t seem to know which way it was going yesterday, swinging between the red and the black for much of the day before finally settling at 7,434.2 points – 18 points (0.2%) lower than the start of trade.

The market has now been trading between 7,320 and 7,465 since 15th October and has now traded around the 7,465 level for three consecutive trading days. The market may pick a direction in the coming days, however in the meantime this period is a great period to filter the outperformers from the underperformers.

The big four banks proved the biggest drag on markets yesterday, with ANZ (ASX: ANZ) the worst of that bunch, down 1.55%.

Even NAB dropped 0.75% despite the bank increasing its full-year cash earnings 76.8% and doubling dividends.

Banks weren’t the only weak links, however – the energy, utilities and telco sectors all also suffered, offsetting the gains made elsewhere in health care, IT and materials.

The biggest story of the day came from Chalice Mining (ASX: CHN) – the company’s shares jumped 28.5% after a mammoth discovery at its Julimar complex, not far from Perth.

The company announced it had found 10 million tonnes of palladium, platinum and gold – collectively referred to as ‘platinum group elements’. It’s the largest find of this kind in Australian history.,

It was not, however, the only discovery they reported. In addition to this haul, Chalice reported the site plays host to 530,000 tonnes of nickel – the largest nickel deposit identified globally in 20 years.,

Not bad for a day’s work.

Other miners – including Lynas Corporation, (ASX: LYC), Fortescue Metals (ASX: FMG) and BHP (ASX: BHP) – also notched up gains.

There was some commotion yesterday around Sydney Airport (ASX: SYD), too, and not because borders are open again.

The airport’s management agreed on Monday to a $32 billion takeover bid from a consortium of investors led by IFM Investors, the institutional investment manager backed by several industry super funds.

On Tuesday, concerns were raised about what such a takeover would mean for competition in the space, given several of the super funds behind IFM Investors also have stakes in airports in Brisbane, Melbourne, Adelaide and Perth. 

Plenty of investors will be watching with a keen eye to see how competition watchdog the ACCC will respond.

While all this played out in the big-cap space, small and microcaps enjoyed some modest gains – the ASX small ordinaries index (ASX: XSO) put on 0.7% while the Emerging Companies index (ASX: XEC) climbed 1.49%.

That’s it from me for this week. I hope to see you all in our upcoming webcasts.

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Tomorrow at 11am (AEDT) I will be joined by the company’s managing director Steuart Roe, who will talk about the business opportunity and how Registry Direct’s technology is disrupting the market. Click here to attend.

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