Market highlights and 5 ASX small caps to watch on Thursday

Wall Street down as Fed signals two rates rises by 2023

All major indices in the US fell on Thursday, after an announcement by the central bank that surprised the market.

The Dow Jones fell by 0.77%, S&P 500 by 0.54%, and tech heavy Nasdaq by 0.24%.

Investors were left largely surprised at the Fed’s announcement where 11 out of 18 policymakers signalled two rate increases by the end of 2023, a year earlier than expected.

However, chairman Jerome Powell watered down the impact by saying that it was still too premature to talk of a ‘lift-off’ phase for interest rates.

The central bank also said that its bond purchases program will remain at a rate of US$120 billion per month.

After the statement, US treasury yields rose, with the benchmark 10-year rising by 8 basis points to 1.575%.

In cryptocurrency market, Bitcoin was trading lower at US$38,800 level at 8am AEST, compared to the US$40,200 level on Wednesday.

Billionaire venture capitalist Tim Draper is reportedly sticking to his prediction that BTC will top US$250,000 by the end of 2022.

Modest gain for the ASX on Wednesday

The ASX lifted slightly by 0.1 per cent on Wednesday, after briefly climbing past the 7,400 level.

Only tech and energy sectors were in the red, down by 0.36 per cent and 1.56 per cent respectively while resources led the winners with a 1.49 per cent gain.

In big caps news this morning, newly listed financial company, Challenger (ASX:CGF), has reaffirmed its profit guidance for the full year FY21, saying that its profit before tax will come in between $390 million and $440 million.

5 ASX small caps to watch today

DC Two (ASX:DC2)
Cloud data centre company has secured an initial customer and signed a deal to provide co-location services for a cryptocurrency miner estimated to be a minimum of $926k over five years. The customer will use DC2’s modular data centre to host solutions for Bitcoin and cryptocurrency miners with a focus on lower cost, renewable energy.

Vectus Biosystems (ASX:VBS)
The fibrosis and high blood pressure specialist has received an approval to conduct a phase 1 human trial in Australia for VB0004. The trial will be titled: “A phase I/Ib, first-time-in-human, single centre, double blind, randomised, placebo-controlled, dose-escalating study of the safety, tolerability and pharmacokinetics of single and repeat doses of VB0004 administered orally to healthy volunteers; and to patients with mild to moderate hypertension with low cardiovascular risk”.

Wide Open Agriculture (ASX:WOA)
The regenerative agriculture company will develop a pilot-scale lupin protein production facility in WA. The facility will be used to refine the lupin production process, protect existing IP, build new IP, and produce food grade quantities of Modified Lupin Protein. WOA said it expects the plant to generate a modest revenue stream for the company.

4D Medical (ASX:4DX)
The medtech company announced that its XV Technology will be deployed at University of Michigan in the US after it received a purchase order for one of its Permetium preclinical scanners. The company will receive US$600,000 from the sale of the scanner to be funded by the US National Institutes of Health, a US government agency responsible for biomedical and public health research.

De.Mem (ASX:DEM)
The water tech company has reported the first sale of De.mem water treatment equipment to West Australian clients. The first order is for chemicals related to the supply of Reverse Osmosis membrane antiscalants manufactured by Capic.