- The ASX is set to open lower on Wednesday, tracking Wall Street
- The debt ceiling impasse is likely to be resolved by “end of the week”
- Sam Altman’s other investments outside of ChatGPT
Local shares will open lower this morning after a selloff in New York. At 8am AEST, the front-dated ASX 200 futures contract was pointing down by -0.5%.
Overnight Wall Street tumbled as investors watched for signs of a breakthrough in the debt-ceiling impasse, and digested fresh economic data.
The S&P500 index was down by -0.64%, the Dow Jones by -1.01% and tech-heavy Nasdaq by -0.18%.
President Biden met again with House speaker Kevin McCarthy and while the debt ceiling negotiations are still far from a success, McCarthy said “it is possible to get to a deal by the end of the week”.
Biden will cancel his planned trip to Sydney next week to focus on the stalled negotiations. The market is staring down a June 1 deadline as Treasury Secretary Yellen warned that “time is running out”.
In stock news, Home Depot fell -2% after Q1 profits missed estimates. The company lowered guidance for the rest of the year, which could be a trend we see going forward for major US retailers.
Earnings from other giant retailers Walmart (WMT) and Target (TGT) are set to be reported later this week.
Chinese tech giant Baidu rose 4% on the Nasdaq after posting Q1 profits that beat estimates.
US regional bank stocks were sold off again as former executives from Silicon Valley Bank and Signature Bank testified before the Senate.
To economics data, where the headline US retail sales reading showed that consumers are holding up as purchases rose 0.4%, an improvement from the -0.7% dip seen in the prior month.
Sam Altman’s other investments
OpenAI founder Sam Altman has apparently a lot more going on than just ChatGPT.
According to FT, he’s about to secure a $100 million funding round for an eye scan-accessible global cryptocurrency project, Worldcoin.
Worldcoin is not totally unrelated to his signature project. It uses a device somewhat unoriginally called an ‘Orb’ that scans people’s irises to prove they are human, and rewards them with Worldcoin tokens, with focus on workers displaced by AI.
Altman has also backed a nuclear fission startup called Helion Energy, which recently notched an electricity supply deal to Microsoft starting in 2028.
Separately, Altman has $180 million plugged in a biotech startup called Retro Biosciences, which is exploring anti-ageing drugs and has a goal of expanding the average human lifespan by 10 years.
In other markets ….
Crude prices fell -0.7% overnight, with WTI now trading at US$70.65 a barrel.
“The global economic outlook has too many question marks, and that is not giving energy traders a lot of confidence in buying crude,” said Oanda analyst, Edward Moya,
Gold is trading hands at US$1,988.76 an ounce, down 1.5% from the previous day.
Moya believes too many risks remain on the table for investors to go offensive on gold right now.
“Risk aversion could get a boost from regional banking fears, debt ceiling drama, and a weakening consumer, but it will likely come from a new catalyst.”
Bitcoin meanwhile slipped -1.2% in the last 24 hours to US$27,027.
Data shows that trading ranges within BTC markets continue to narrow, a sign that uncertainty remains and traders are holding back on trading the coins.
5 ASX small caps to watch today
Serko (ASX:SKO)
The corporate travel tech company reported that its total income increased by 154% on the pcp to $48m for FY23. The figure came in just ahead of the revised guidance range of $42 million to $47 million. Growth was underpinned by a significant increase in Booking.com sales, and strategic decisions that allowed Serko to maximise the business travel recovery. Online bookings also rose 93% to 4.1 million from 2.2 million.
Temple & Webster (ASX:TPW)
In May, TPW has returned to year-on-year growth with trading in the last four weeks up 10% vs pcp. CEO Mark Coulter said the Australian furniture & homewares category remains highly under-penetrated in terms of its shift to online, compared to the US and UK. The company has reaffirmed its full year guidance range of 3-5% EBITDA.
Peter Warren Automotive (ASX:PWR)
Peter Warren is set to acquire a majority share in three NSW dealerships for an estimated total consideration of $45m. The dealerships to be acquired are Peter Warren Toyota at Warwick Farm, Bathurst Toyota and Bathurst Volkswagen. All are majority owned by the Warren family, a significant shareholder of Peter Warren. In the last financial year, the businesses generated a combined turnover of $180m with approximately 110 employees.
Toubani Resources (ASX:TRE)
Toubani announced the first drill holes at the Kobada West discovery in southern Mali. The drillings have delineated continuous, near surface oxide gold mineralisation with consistent grades and thicknesses section-to-section. The Kobada project hosts 3.1Moz in Mineral Resources which occurs over a 4.5km strike length, and is predominantly oxide and open pittable.
Auric Mining (ASX:AWJ)
Auric announced that open-pit gold mining has commenced at its Jeffreys Find Project. The project is located 45km northeast of Norseman in WA, approximately 750km from Perth. Commencing late-May, between 100,000-150,000 tonnes of ore will be hauled to the Greenfields Mill at Coolgardie where it will be toll treated. Gold produced will be forwarded to the Perth Mint for final refining and sale.