Market Highlights: Wall Street jumps, ASX to rise as Powell and co go behind closed doors

The ASX is poised to open higher this morning
FOMC members have convened for the first monetary policy meeting of the year
US earnings season continues overnight, with mixed results

The ASX is set to open higher on Wednesday. At 8am AEDT, the ASX 200 Feb futures contract was pointing up by 0.45%.

Overnight, all three major US benchmarks surged by well over 1% as FOMC members convened for the first of a two-day monetary policy meeting.

The quarterly US wages cost index provided optimism that wage pressures are cooling, supporting the idea that disinflation trends remain in place.

The wages index is one of the many key statistics Fed Chair Powell would look at closely.

US consumer confidence also edged lower, fuelling bets on a Fed rate cut by the end of the year. A survey also suggested that 64% of US consumers were living paycheck to paycheck, up from 61% the year before.

“Wall Street is slowly growing confident that this week’s Fed rate hike might end up being the last one in this tightening cycle,” said OANDA analyst, Edward Moya.

Meanwhile, some sort of electric vehicle Black Friday is taking place.

Following Tesla’s move to slash its prices, Ford announced that it will also cut prices on its EV Mustang Mach-E models by as much as 8%, putting the price range at about US$46k to US$64k.

In other stock news, plant-based food specialist Impossible Foods plans to cut its staff by 20%.

Boeing is about to deliver its last 747 plane today, half a century after debuting the jumbo jet.

To earnings, Exxon delivered soft revenue but a strong EPS beat.

Exxon noted that they see tight oil supplies ahead as some producers pull back. The comments pushed crude prices to turn positive overnight, with Brent trading 1% higher to US$85.40.

McDonald’s reported strong beats on EPS, revenue and sales, but its share price slid 1.3% after announcing that it will open 1900 new restaurants this year.

General Motors share price surged 3% after reporting top and bottom lines beat, as well as better-than-expected guidance.

Investors are now bracing for quarterly reports from the major tech players – including Meta reporting results on Wednesday, followed by Alphabet Inc, (Google), Apple, and Amazon on Thursday (all US time).

“These tech titans – which got carried away during the pandemic era amid soaring revenues and profits and which are now being forced to regroup – still have piles of cash, in some cases hundreds of billions of dollars, and remain enormously profitable,” says deVere Group CEO, Nigel Green.

“Despite the short-term turbulence, the long-term trend of digitalisation hasn’t changed, and won’t, which means there is plenty of reason to be bullish for big tech,” he added.

To cryptos where Bitcoin rose by 1% to US$US$22,928.

“If the Fed is hawkish, we could see a healthy short-term correction in crypto and all risk assets,” said Nauman Sheikh, head of treasury at crypto asset management firm Wave Financial.

5 ASX small caps to watch today

The Reject Shop (ASX:TRS)
The company announced that CEO Phil Bishop has resigned for personal reasons, effective immediately. CFO Clinton Cahn has been appointed as acting CEO. Meanwhile, TRS says first half sales are expected to be $439.7 million, up 3.5% on the pcp. EBIT for the first half is expected to be in the range of $22.5 million and $23.5 million, versus $20.5 million in the pcp.

Genmin (ASX:GEN)
Genmin has signed a long-term power supply agreement for an initial term of 20 years with Gabon’s state-owned power utility. The agreement provides for the initial supply of 30 megawatts (MW), which can be increased to 50MW, and will provide green renewable electricity to accommodate future expansion at Baniaka.

Red Mountain Mining (ASX:RMX)
Lithium assay values to a high of 721ppm lithium have been returned from initial surface sampling efforts. This was the highest assay result from a total of 18 surface samples collected from the Mustang mineral claim. A total of eight samples returned assay results of over 500ppm Li, which are highly anomalous given the small scale sampling program, RMX says.

Best & Less (ASX:BST)
CEO Rodney Orrock will depart the company at the end of his current period of medical leave on 28 February. While Orrock continues to make good progress in his treatment and recovery from lymphoma, he has decided to step down to prioritise his long-term health. The external search process for a permanent CEO is progressing well, with Jason Murray to remain as executive chair until a new CEO starts in the role.

Kelly Partners (ASX:KPG)
The accounting company recorded a 42.2% increase of revenue to $44m in the first half. Underlying EBITDA was up 14.3% to $11.8m, up from $10.3m in the pcp. Total dividends paid related to FY22 was 8.17 cents per share, equating to a payout ratio of 58.4% of Underlying NPATA.