Market Highlights: Gold, S&P 500 hit new highs as Netflix dazzles; and one global stock to watch

The ASX is set to rally on Monday as Netflix exceeded earnings expectations and gold rose to new highs.

TSMC crucial for chip production, and investors should watch this stock. Picture via Getty ImagesShot with Canon R5

• ASX set to rise on Monday after strong Wall Street gains

• Netflix shares up 11pc on strong profits

• TSMC crucial for chip production, and investors should watch this stock

The ASX is set to rally when the market resumes on Monday after a strong session on Wall Street. At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.5%.

On Friday, the S&P 500 climbed 0.4%, reaching a new all-time high and marking its sixth consecutive week of gains – the longest streak of 2024.

The tech-heavy Nasdaq led the way with a 0.63% gain, while the blue chips-focused Dow Jones added 0.09%.

Netflix’s post-market results on Thursday eased concerns about Big Tech facing challenges in the third quarter. The streaming giant's profit shot up, smashing Wall Street estimates, and both revenue and subscriber growth came in stronger than analysts expected. Shares were up 11%.

Tesla shares dropped 0.1% after the US National Highway Traffic Safety Administration (NHTSA) announced an investigation into the company’s full self-driving (FSD) technology. The NHTSA is looking into reports of four crashes that occurred while the FSD software was being used in situations with poor visibility, like when there’s sun glare, fog, or dust in the air. The investigation will involve about 2.4 million Tesla vehicles in the US – essentially every Tesla that has the FSD capability.

Wedbush analyst Dan Ives reported that iPhone sales in China have jumped 20% since September 20, when Apple launched the iPhone 16 and Huawei released a new model. Although Apple has lagged behind Huawei in China this year, this data has calmed concerns about weak initial iPhone 16 sales. Apple shares were up 1.23%.

American Express jumped nearly 3% after stronger-than-expected profit for Q3 and an upgrade to its full-year outlook, driven by solid consumer spending.

Coinbase saw its shares jump nearly 8%, riding the wave of Bitcoin's recent surge. Bitcoin climbed nearly 10% last week and is getting close to the US$70,000 mark.

Meanwhile, gold prices soared to a new record high, surpassing $2,700 an ounce and trading at US$2,721.20 at this time of writing. Rising concerns over the Middle East conflict and uncertainty surrounding the US presidential election have driven investors toward safer assets.

Back home, New Zealand dairy company Synlait Milk (ASX:SM1) has announced this morning that its CEO, Grant Watson, has resigned. The company will start searching globally for his replacement. In the meantime, Tim Carter, the CEO of Dairyworks, will step in as acting CEO starting today.

Why every investor should watch TSMC

Hani Abuagla, a senior market analyst at XTB says investors should pay attention to TSMC, a Taiwanese company that's one of the most important companies for the modern world as we know it today.

TSMC is the leading manufacturer of logic chips used in smartphones, computers, and more, making over 90% of the world's advanced chips for major clients like Apple, Qualcomm, and Nvidia.

Hani Abuagla notes, “Without this company, the world would... stop.”

However, TSMC operates in Taiwan, a region with rising geopolitical tensions due to China's claims over the island. If conflict were to arise, a Bloomberg estimate suggests world GDP could drop by 10% in the first year – far worse than the impacts of the COVID-19 pandemic or the 2008 financial crisis.

Before TSMC, most manufacturers, like Intel, designed and made their own chips. The founder of TSMC approached chip companies and offered to produce their chips more efficiently and at a lower cost, allowing these companies to focus on designing the chips.

Recently, TSMC’s strong financial results pushed its market cap back over US$1 trillion, making it larger than major companies like Berkshire Hathaway and Tesla.

“So you can imagine TSMC as a baker who bakes bread and other companies as a person with a recipe for this bread. Recipes in this case are provided by Apple, AMD or Nvidia, for example, TSMC is the baker,” explained Abuagla.

The company earns 43 cents from every dollar spent, which, with the exception of Nvidia, cannot be matched even by large American technology companies.

Apart from Taiwan, TSMC’s shares are also listed on the NYSE under the ticker TSM.

In other markets …

Gold price rose by 1% to US$2,721.21 an ounce.

Oil prices dropped by around 2%, with Brent crude now trading at US$73.06 a barrel.

The benchmark 10-year US Treasury yield fell by 1 basis point (bond prices higher) to 4.08%.

The Aussie dollar was up by 0.15% to US67.09 cents.

Bitcoin climbed by 1% in the last 24 hours to US$68,950, while Ethereum rose by over 2% to US$2,708.

And iron ore has rebounded by about 1%.

5 ASX small caps to watch today

PYC Therapeutics (ASX:PYC)
The US FDA has granted PYC Orphan Drug Designation for its drug candidate VP-001, which targets Retinitis Pigmentosa type 11 (RP11), a childhood eye disease. This is the first drug candidate for RP11 to enter human trials. Positive results from initial studies will be supported by more data from ongoing trials set for late 2024. The Orphan Drug Designation provides benefits such as tax credits and reduced fees as PYC works towards a New Drug Application.

Loyal Lithium (ASX:LLI)
Loyal Lithium and Expert Geophysics have created a 3D model that shows significant extensions of known lithium pegmatites at the Trieste Lithium Project in Quebec, Canada. This model uses data from a Mobile MTm survey and highlights three high-resistivity trends that match with known lithium pegmatite outcrops and 41 drill holes. The model goes over 300 meters below the surface, offering new insights into the project's potential size. With $6.3 million in funding, Loyal Lithium said it is well-positioned to develop the Trieste Greenstone Belt into a major lithium hub.

Elixir Energy (ASX:EXR)
Elixir Energy has signed a non-binding Memorandum of Understanding (MOU) with the Australian Gas Infrastructure Group (AGIG), one of the largest gas infrastructure businesses in Australia. This MOU aims to explore developing new gas infrastructure to support future gas production from Elixir’s Grandis Gas Project in the Taroom Trough. The initial focus will be on a new gas transmission pipeline to the Wallumbilla Hub, along with processing, compression, and storage facilities. AGIG operates infrastructure that delivers gas to over two million Australian homes and businesses.

Iondrive (ASX:ION)
Iondrive has achieved significant results in a new study of its lithium-ion battery recycling process using Raw Black Mass, which consists of grounded spent batteries. This study shows high recovery rates for four critical minerals, even from lower-quality materials. The company found that a simple three-stage pre-treatment process effectively removed impurities, leading to recovery rates of 100% for nickel, 98.6% for cobalt, 98.4% for manganese, and 89.1% for lithium, with potential for full lithium recovery. These findings mark a major step forward in Iondrive's eco-friendly recycling technology, and its Pre-Feasibility Study is on track for completion by the end of October.

GBM Resources (ASX:GBZ)
GBM has signed a Farm-in Agreement with Wise Walkers for a joint venture in the Twin Hills Gold Project. Under this agreement, GBM will receive $6 million in cash and Wise Walkers will fund $6 million in exploration over 18 months to earn a 70% interest in the project. GBM will retain a 30% interest without any funding obligations during this phase. The agreement provides an immediate cash boost to GBM and allows for quicker development of Twin Hills. Approval from GBM shareholders and a response from Newmont are still required to finalise the deal.

Originally published as Market Highlights: Gold, S&P 500 hit new highs as Netflix dazzles; and one global stock to watch