The morning catch up: ASX to open softer; record-breaking…

This morning ASX 200 futures were trading 14 points lower, down 0.17%, suggesting a subdued start for the Australian markets.

Big day for tech on Wall Street

Not so on Wall Street overnight, where a pre-Christmas rally resumed after Friday’s pause.

The Nasdaq climbed 1.6% to another record close, fuelled by gains in – you guessed it – mega-cap tech stocks, while the S&P 500 added 0.6%. The Dow Jones traded flat.

Key growth stocks drove US market gains, with Alphabet rising more than 4% and Tesla surging 5.2%.

The Nasdaq’s record-breaking session was also powered by a 1.24% rise to 20,173, led by a standout performance from Broadcom. The chipmaker surged 11.2% following Bernstein’s bullish price target, citing its pivotal role in AI advancements.

Broadcom’s rally lifted the semiconductor sector, with Micron and Teradyne also gaining more than 5%.

News of MicroStrategy’s likely inclusion in the Nasdaq 100 also boosted sentiment around the cryptocurrency sector, about which more below.

Trump’s Bitcoin economy

Bitcoin made headlines, briefly hitting a record high above US$107,000. The crypto’s fortunes were boosted after President-elect Donald Trump suggested the US should create crypto reserves similar to its strategic oil reserves.

Speaking on CNBC, Trump said, “Yeah, I think so,” when asked if such a reserve was a good idea. He added, “We’re gonna do something great with crypto because we don’t want China or anybody else … embracing it, and we want to be the head.”

Bitcoin has surged more than 50% since Trump’s election win and is up nearly 200% for the year.

“We’re in blue sky territory here,” IG market analyst Tony Sycamore told Reuters. “The pullback that a lot of people were waiting for just didn’t happen, because now we’ve got this news.”

Analysts suggest US$110,000 could be the next target for the cryptocurrency.

Governments are slowly increasing their Bitcoin holdings. Crypto aggregator CoinGecko estimates 2.2% of Bitcoin’s supply, or about US$50 billion, is held by governments through purchases, donations or asset seizures.

The US alone holds more than 200,000 Bitcoin, valued at some US$22 billion, much of it acquired from the shutdown of the Silk Road marketplace in 2013.

Rate cut expected from Fed

The Federal Reserve is widely expected to cut interest rates by 25 basis points tomorrow, with market pricing showing a 99.1% likelihood of the move.

Analysts anticipate a “hawkish cut,” with the Fed signalling data dependence and fewer rate reductions in 2025.

In Europe, equity markets closed lower. France’s CAC 40 fell 0.7%, impacted by political uncertainty as a new Prime Minister took office. Germany’s DAX lost 0.5% after the Chancellor faced a no-confidence vote.

Commodities painted a mixed picture. Oil prices softened amid oversupply fears, while gold gained. Locally, yesterday’s rise in iron ore prices may offer some support to mining stocks today.

Market snapshot

• ASX 200 futures: flat 8,256 points.
• Australian dollar: flat at 63.63 US cents.
• S&P 500: +0.5% at 6,082 points.
• Nasdaq: +1.5% to 22,108 points.
• FTSE: -0.5% to 8,300 points.
• EuroStoxx: -0.4% to 510 points.
• Spot gold: +0.2% to $US2,654/ounce.
• Brent crude: -0.8% to $US73.89/barrel.
• Iron ore: +0.8% to $US104.75/tonne.
• Bitcoin: +4.9% to $US106,290.

Source: ABC

What’s happening in small caps?

1. Astral Resources NL (ASX:AAR) has reported assay results for a 21-hole, 3,702-metre infill program at the Iris Deposit, part of the 100%-owned Mandilla Gold Project, 70 kilometres south of Kalgoorlie in WA.
2. FireFly Metals Ltd (ASX:FFM) has commenced trading on the main board of the Toronto Stock Exchange (TSX) under the symbol FFM.
3. Sovereign Metals Ltd (ASX:SVM, OTC:SVMLF, AIM:SVML) says the test pit mined during the Pilot Mining and Land Rehabilitation Program at its Kasiya Rutile-Graphite Project in Malawi has been successfully backfilled.
4. Sprintex Ltd (ASX:SIX) has secured an A$17.5 million minimum order commitment from Air End Repair Ltd, contributing to a current total global minimum order value of A$30 million through recent exclusive distribution agreements in UK, Türkiye and India.
5. Buru Energy Ltd (ASX:BRU, OTC:BRNGF) has made progress across several work fronts associated with its re-focused strategy to deliver enduring cashflows built on the foundation Rafael Project, with partnering and gas/liquids offtake discussions underway.