Australian shares are gearing up for a robust Friday rebound following a tech surge on Wall Street. At 8 am AEDT, the ASX 200 index futures contract indicated a positive trend, pointing up by 0.8%.
Overnight in New York, the S&P 500 showed a rise of +0.88%, the Dow Jones index climbed +0.54%, and the Nasdaq, driven by a tech rally, surged +1.35%. Shares managed to recover from earlier losses in the week, thanks to fresh data revealing a surprising drop in US initial claims for unemployment benefits, reaching their lowest level since 2022.
The unexpected improvement in unemployment figures could complicate the Fed's decision on rate cuts but has simultaneously boosted market optimism about the US economy. Atlanta Fed President Raphael Bostic, while stating he doesn't foresee interest rate cuts until Q3 of 2024, remains open to the idea if there is "convincing" evidence of a decline in inflation.
The tech rally was spearheaded by Apple, experiencing its best day since May 2023 with a 3.3% rise, following an upgrade from Neutral to Buy by Bank of America. TSMC, the world's leading chipmaker, also saw a positive movement of +1.2%, despite reporting a 1.5% decline in Q4 revenue from a year ago. Conversely, hydrogen fuel cell developer Plug Power faced an -11.5% dip after announcing a potential US$1 billion stock offering plan.
In the small-cap realm, after a year of underperformance, these stocks might be gearing up for a significant comeback. According to Greg Tuorto of Goldman Sachs Asset Management, small caps could be well-positioned to capitalize on transformative technologies, despite concerns about their balance sheets withstanding higher interest payments. With the Federal Reserve seemingly concluding its rate hikes, Tuorto suggests it's time for small caps to catch up.
In other market updates, the gold price rebounded by +0.85% to US$2,022.47 an ounce, oil prices rose around +2%, with Brent trading at US$79.01 a barrel, and the benchmark 10-year US Treasury yield increased by 3 basis points to 4.14%. Iron ore futures also bounced back +2.5% to US$129.00 a tonne, the Aussie dollar surged by +0.3% to US65.71c, while Bitcoin experienced a -4% decline in the last 24 hours to US$40,809.
Additionally, here are 5 ASX small caps to watch, featuring companies like Visioneering Technologies (ASX:VTI), Voltaic Strategic Resources (ASX:VSR), Mantle Minerals (ASX:MTL), Cazaly Resources (ASX:CAZ), and Adavale Resources (ASX:ADD), each with notable updates or developments in their respective sectors.
Note: This information does not constitute financial product advice, and it is recommended to seek independent advice before making any financial decisions.
save stocktsm stockpyplgs stockenergyxfe battery metals corp stockenergyx stockalbemarle corporationenergy x stocklithium refining business