Market Highlights: Sizzling US jobs market, central banks’ gold addiction, and 5 ASX small caps to watch

• Shares to rise today after a rally on Wall Street
• US jobs data boosted possibility that a recession could be avoided
• Central banks keep buying gold, says the World Gold Council

 

Aussie shares are poised to rise at the open, buoyed by Friday’s rally on Wall Street. At 8am AEST, the ASX 200 index futures was pointing up by +0.3%.

Major indexes in New York rose by around 1% as traders assessed the stronger than expected US jobs report.

According to the data, employers in the US added nearly twice as many jobs in September at 336,000, while the unemployment rate was unchanged at 3.8%.

“Even though the employment data was considerably higher, at least this is a scenario that bodes well for the economy and signals that we’re likely not going into a recession,” said Nick Giacoumakis of NEIRG Wealth Management.

US treasury yields spiked (bond prices down) after the release, with the 10-year Treasury yield surging to its highest level of the year at 4.86%.

Gains in US equities meanwhile were fairly broad based.

Tesla closed 0.2% higher after cutting the price of some Model 3 and Model Y versions in the US.

ExxonMobil, however, closed -1.6% lower after revealing that it was in negotiations to buy US$50bn market capped Pioneer Natural Resources (NYSE:PXD), which is the largest crude producer in Texas.

 

Central banks keep buying gold

Central banks collectively increased their gold reserves in August for the third consecutive month.

Based on the reported data from the World Gold Council (WGC) at the time of writing, they added 77 tonnes to global official reserves during the month, a 38% up-tick from July’s buying.

Over the last three months, their combined net buying has totalled 219 tonnes, comfortably outweighing the combined net sales from April and May (96 tonnes).

Buying, however, continues to be sizeable but limited to a small number of banks. The People’s Bank of China once again led the pack, adding a further 29 tonnes during the month.

“Suffice to say, central bank buying remains healthy,” read the note from WGC.

“Even accounting for the net sales earlier in the year, the pace of buying so far this year suggests that we are on course for another strong annual total,” noted the report.

 

In other markets …

Gold price was up +0.7% to US$1,832.34 an ounce.

Oil prices surged +3%, with Brent crude now trading at US$84.58 a barrel after war broke out in Israel.

Iron ore futures climbed +0.27% to US$117.74 a tonne.

Base metals prices lifted with nickel futures falling by +0.5%, and copper futures climbing by +1.85%.

The Aussie dollar slipped -0.16% to US63.58c.

Bitcoin meanwhile traded flat in the last 24 hours at US$27,940.

 

5 ASX small caps to watch today

Genex Power (ASX:GNX)
Fortescue Metals(ASX: FMG) today announced that following a competitive process, its wholly owned subsidiary has entered into a power purchase agreement with a wholly owned subsidiary of Genex Power for 337.5 megawatts (MW) of new solar energy. The contract is intended to meet a portion of the renewable energy requirements for the proposed Gibson Island Project in Brisbane. Under the contract, Fortescue will secure the solar energy and renewable generation certificates at an agreed nominal fixed price over a 25-year term.

Lincoln Minerals (ASX:LML)
Lincoln announced the appointment of Jonathon Trewartha as its new CEO, effective November 3, 2023. Trewartha’s extensive career spans numerous key positions in the mining industry, highlighting his expertise in exploration, study, approvals, projects and technical operations. In his most recent role as Senior Study Manager at Worley, Trewartha oversaw a variety of feasibility studies.

Red Mountain Mining (ASX:RMX)
RMX says it has recently staked a total of 199 mining claims at the north-east region of Nevada, US. The staking initiative has now almost doubled RMX’s landholding size position in Nevada. Initial sampling program is expected to commence at the end of October.

Biome Australia (ASX:BIO)
Following a record Q1, microbiome health company Biome has now announced FY24 sales revenue guidance of $11.5m, representing a 60% increase vs pcp. In addition, the company expects to deliver its first positive monthly EBITDA by June 2024. Biome continues to grow sales revenue while containing operating costs and maintaining a gross margin above 59%.

DevEx Resources (ASX:DEV)
DevEx has secured a highly prospective addition to its uranium exploration portfolio in Northern Australia after entering into an earn-in agreement over the province-scale Murphy West Uranium Project. Under the deal with unlisted Transition Minerals (TM), DevEx can earn up to 75% of the uranium mineral rights within seven granted exploration tenements totalling 5,000km2 in a highly prospective, but under-explored uranium province. The Murphy West Uranium Project falls within TM’s Barkly Project where TM is exploring for vanadium and rare earths.

 

At Stockhead we tell it like it is. While DevEx Resources is a Stockhead advertiser, it did not sponsor this article.