Morning Bell 5 June

US equities closed mixed overnight. The Dow Jones dropped 0.2%, ending at four day winning streak as lower than expected payroll data dragged down sentiment. The S&P500 and the Nasdaq however, both closed in the green, gaining 0.44% and 0.32% respectively.

European markets were all in the green with the STOXX600 up 0.47%.

Our local market rallied yesterday as the energy sector lead the market with strong gains. Paladin Energy (ASX:PDN) and Mineral Resources (ASX:MIN) were among the top performers.

Uranium stocks jumped at the open following news that one of the world’s biggest technology companies had stepped up demand for nuclear power.

The rise came after Meta overnight signed a 20-year contract to buy 1,121 megawatts from Constellation’s nuclear plant, with power supply beginning in 2027. This follows similar deals struck by peers Microsoft, Amazon, and Google parent Alphabet. Nuclear power has emerged as one of the biggest winners from the AI-fuelled surge in electricity needed for data centres. New nuclear reactors are an important source of uranium demand growth. This follows Microsoft’s recent deal to fulfil all AI power needs from a US Nuclear power plant.

Also yesterday, the GSP growth rate was released. GDP grew at 0.2% in the March quarter following a 0.6% expansion in the prior quarter. Markets were expecting a 0.4% rise so the data out today indicating stalled growth.

What to watch today:

• The Australian market is set to open slightly in the red. The SPI futures are suggesting a 0.1% drop at the open this morning.
• And in commodities,
  • Crude oil has dropped more than 1% and is trading at US$62.69 per barrel as Saudi Arabia signalled it may push for a large production increase, raising fears of a global oil oversupply.
  • The price of gold has rebounded, advancing 0.6% trading at US$3,373.44 an ounce, and approaching a one-month high, as a series of weak US economic reports renewed concerns over the outlook.
  • And iron ore has jumped more than 1% trading at US$96.26 per tonne. The price is still hovering around eight- month lows as weak economic data from China clouded the metal's demand outlook.

Trading ideas:

• Bell Potter maintain their Buy rating on Elders (ASX:ELD), a leading supplier to fertiliser, agricultural chemicals and animal health products. Their 12- month price target is unchanged at $9.10, and at ELD’s current share price of $6.15, this implies 48% share price growth in a year.
• And Trading Central has identified a bullish signal in ResMed (ASX:RMD) indicating that the stock price may rise from the close of $38.33 to the range of $40.60 - $41.20 over 10 days according to the standard principles of technical analysis.