Happy Fright-day (US inflation edition).
It was a week where the good vibes (more or less) spilled from Wall Street out across global markets, as tech stocks rebounded and another round of US companies reported strong earnings.
Still, everyone was waiting to see if Thursday night’s US inflation print came in hot or not.
Here’s the read:
Annual headline inflation of 7.5% (a 40-year high); and
Annual core inflation of 6% (easily beating expectations of 5.5%).
For the most part though, equity investors weren’t looking for a hot CPI print.
Whether inflation proves sticky or not is one thing (and has been debated ad nauseum since US CPI started rising last year).
But when the monthly data comfortably beats expectations, that changes the outlook for rate rises by the US Fed.
As James Whelan recently highlighted on Stockhead, the Fed have already told us they need to raise. They’ve already told us they will raise.
So the question that creates the jitters then becomes; how fast will they do it?
As tech investors know by now, markets have reached a point in the post-COVID cycle where macro changes can have an impact on large-scale equity rotations.
US equity investors didn’t like it (Nasdaq: -2.1%), and local stocks look set to end the week in the red following the latest CPI disruption.
Shortly after 12pm EST the ASX 200 was down by around 0.8%, while the microcap Emerging Companies index was ~1.6% lower.
Gold stocks fell as US bond yields rose sharply, while tech stocks led falls across the major sectors (although the selloff wasn’t as savage as some of the January falls).
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for February 11 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Price | % | Market Cap |
|---|---|---|---|---|
| ANL | Amani Gold Ltd | 0.0015 | 50.0% | $22,933,441 |
| LKO | Lakes Blue Energy | 0.0015 | 50.0% | $42,382,422 |
| BOC | Bougainville Copper | 0.53 | 32.5% | $160,425,000 |
| PSL | Paterson Resources | 0.029 | 20.8% | $8,142,206 |
| DDD | 3D Resources Limited | 0.0035 | 16.7% | $11,641,116 |
| HZR | Hazer Group Limited | 1.09 | 14.7% | $154,752,334 |
| AFW | Applyflow Limited | 0.004 | 14.3% | $10,351,628 |
| ITM | Itech Minerals Ltd | 0.43 | 13.2% | $33,629,999 |
| HGV | Hygrovest Limited | 0.053 | 12.8% | $10,807,837 |
| NKL | Nickelxltd | 0.18 | 12.5% | $8,856,000 |
| SMI | Santana Minerals Ltd | 0.45 | 12.5% | $53,054,915 |
| SMX | Security Matters | 0.27 | 12.5% | $39,839,742 |
| QGL | Quantum Graphite | 0.28 | 12.0% | $73,250,000 |
| AS1 | Angel Seafood | 0.19 | 11.8% | $27,467,725 |
| MEB | Medibio Limited | 0.005 | 11.1% | $9,274,730 |
| DLC | Delecta Limited | 0.011 | 10.0% | $12,049,087 |
| OAR | OAR Resources Ltd | 0.0055 | 10.0% | $9,272,824 |
| FTC | Fintech Chain Ltd | 0.055 | 10.0% | $32,538,479 |
| SLM | Solismineralsltd | 0.33 | 10.0% | $9,469,500 |
| HVM | Happy Valley | 0.066 | 10.0% | $12,751,773 |
| RWD | Reward Minerals Ltd | 0.115 | 9.5% | $20,496,282 |
| MR1 | Montem Resources | 0.047 | 9.3% | $10,948,655 |
| FCT | Firstwave Cloud Tech | 0.071 | 9.2% | $107,951,757 |
| EQE | Equus Mining Ltd | 0.18 | 9.1% | $28,722,697 |
| SHP | South Harz Potash | 0.18 | 9.1% | $79,362,668 |
Among stocks with news, Hazer Group (ASX:HZR) got a boost after announcing that it’s executed a (non-binding) Memorandum of Understanding (MOU) with two Canadian companies — Suncor Energy Inc and FortisBC Energy Inc. — to “develop a 2,500 tpa low-carbon emission hydrogen production facility”, using the company’s Hazer processing technology.
Also on the winner’s list on Friday was Angel Seafood (ASX:AS1), after the company entered into a Scheme Implementation Agreement with a subsidiary of Laguna Bay Agricultural No 1 Pty Ltd.
The deal is for Laguna Bay to acquire 100% of the shares in AS1 in an all-cash deal for 20c each. The completion of the deal followed Laguna’s initial bid in December, when AS1 was trading at 12.5c.
ASX SMALL CAP LOSERS
Here are the worst performing ASX small cap stocks for February 11 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Price | % | Market Cap |
|---|---|---|---|---|
| ZBT | Zebit Inc. | 0.078 | -60.0% | $18,453,867 |
| KEY | KEY Petroleum | 0.002 | -33.3% | $5,903,784 |
| CRM | Carbon Minerals Ltd | 0.31 | -26.2% | $7,897,467 |
| EN1 | Engage:Bdr Limited | 0.0015 | -25.0% | $7,005,272 |
| WOO | Wooboard Tech Ltd | 0.0015 | -25.0% | $7,644,325 |
| TRT | Todd River Res Ltd | 0.062 | -19.5% | $43,674,884 |
| PEC | Perpetual Res Ltd | 0.059 | -16.9% | $34,942,695 |
| CCE | Carnegie Cln Energy | 0.0025 | -16.7% | $45,307,721 |
| MLS | Metals Australia | 0.0025 | -16.7% | $15,715,672 |
| ADS | Adslot Ltd. | 0.016 | -15.8% | $37,658,119 |
| JAY | Jayride Group | 0.17 | -15.0% | $35,276,852 |
| KNB | Koonenberrygold | 0.12 | -14.3% | $10,376,272 |
| MBK | Metal Bank Ltd | 0.006 | -14.3% | $18,254,727 |
| NOR | Norwood Systems Ltd. | 0.012 | -14.3% | $3,964,868 |
| LAW | Lawfinance Ltd | 0.43 | -14.0% | $20,385,370 |
| AGS | Alliance Resources | 0.125 | -13.8% | $30,162,484 |
| OAK | Oakridge | 0.26 | -13.3% | $5,158,704 |
| KCN | Kingsgate Consolid. | 1.45 | -12.9% | $368,498,554 |
| IGN | Ignite Ltd | 0.12 | -11.1% | $12,093,594 |
| MRD | Mount Ridley Mines | 0.008 | -11.1% | $51,583,013 |
| OEX | Oilex Ltd | 0.004 | -11.1% | $32,008,282 |
| RR1 | Reach Resources Ltd | 0.008 | -11.1% | $14,346,112 |
| OPN | Oppenneg | 0.17 | -10.5% | $22,189,183 |
| AML | Aeon Metals Ltd. | 0.044 | -10.2% | $42,424,636 |
| CLE | Cyclone Metals | 0.0045 | -10.0% | $25,521,185 |
US ecommerce company Zebit (ASX:ZBT) recommenced trading, after flagging plans to delist from the ASX earlier this week.
The stock promptly slumped more than 60% in morning trade to 7.7c — a discount of 95% from its October 2020 IPO price, when it raised $35m from investors.
In its announcement to the market, Zebit said it will need to raise “additional capital in FY22 to fund its existing operations and future growth”.
“Having regard to the Company’s limited liquidity, CDI price, and market feedback, the Company believes it is unlikely to be able to raise the capital it requires from Australian investors”.
The group’s latest 4C filing showed it booked net operating cash outflows of US$3.663m in December, and finished the quarter with just US$7.868m in the bank.