ASX Small Cap Lunch Wrap: Markets are ‘frothy’ but don’t worry — low rates are here to stay

For investors, low interest rates are generally positive for stock valuations.

Which is why everyone tunes in to see if the US Federal Reserve Open Market Committee (FOMC) plans to make changes to the official rate – a blunt tool used to fire up the economy (lower rates) or slow it down (higher rates).

This time, while Federal Reserve Chairman Jerome Powell said he does see some ‘froth’ in equity markets, interest rates were left near zero and the pace of asset purchases unchanged.

Inflation is also up, but Powell says this is “transitory”.

Supply-side bottlenecks – largely caused by COVID-19 — will be resolved over the coming quarters, placing supply and demand in better balance, he says.

Rates are expected to stay low until “inflation has risen to 2 per cent and is on track to moderately exceed 2 per cent for some time”.

The S&P 500 briefly rose to an intra-day record high in response, before finishing the day slightly in the red.

The Aussie market started the day up a solid 4% for April. By 12pm eastern time the ASX200 index was up another 0.28% to 7,084.4 points.

WINNERS

Here are the best performing ASX small cap stocks at 11:45am Thursday April 29:

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Ecommerce platform Rewardle (ASX:RXH) will provide consulting services to SplitPay, an Aussie Buy Now, Pay Later (BNPL) platform targeting the fast-growing UK and EU markets.

The stock was up +290% to hit four-year highs in early trade.

Internet-connected appliance maker Zimi (ASX:ZMM) – formerly Quantify Technology – will sell $500,000 worth of product to Beacon Lighting (ASX:BLX).

The ‘Zimi Powermesh’ devices will also appear on an upcoming TV renovation show, the company says.

Digital banking and payments company Novatti Group (ASX:NOV) has been selected by BNPL giant Afterpay (ASX:APT) to deliver its payment card program in New Zealand.

The initial agreement is for three years. Novatti will receive project set-up, monthly recurring and — dependant on the take up of the service — transaction-based fees.

LOSERS

Here are the worst performing ASX small cap stocks at 11:45am Thursday April 29:

Swipe or scroll to reveal the full table. Click headings to sort.