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ASX Small Caps Lunch Wrap: Inflation a little higher than expected, but then so is the ASX
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A chastened ASX200 has given up early gains while the Aussie dollar has enjoyed a mini-bump after this morning’s not-awful inflation numbers.
Ahead of the 11.30am CPI data, with the benchmark basking in the surprise riches of US corporate earnings and perhaps feeling a little more easy over Middle East tensions, the ASX200 fought its way to a third straight morning of winning.
And then…
At 12.45pm, the S&P/ASX200 is up 22.30 points or 0.29% to 7,705.80.
Over the 12 months to the March 2024 quarter, the Aussie CPI rose 3.6%.
The most significant price rises this quarter were Rents (+2.1%), Secondary education (+6.1%), Tertiary education (+6.5%) and Medical and hospital services (+2.3%).
But the CPI was slightly higher than the expected annual 3.4%, despite being well down from 4.1% in the December quarter.
On a quarterly basis the Consumer Price Index rose 1.0% this quarter, while a survey of Bloomberg economists had prices rising 0.8% in the quarter, with CBA economists seeing a 0.7% increase.
Annual CPI inflation peaked at 7.8% in December 2022.
Through the previous session, a plucky benchmark opened significantly higher, drifted lower, and then wafted about lightly through an afternoon of extended gains.
Financials ended up making the most of a positive previous session banking a 1.1% gain.
The valuations on Aussie banks have almost universally been dismissed as bloated and the short-term outlooks is fraught.
This morning the brokers at Citi slapped a Sell rating on all four of the big ones.
It was the IT crowd which landed the biggest fish yesterday, buying in pursuit of the Nasdaq, while Healthcare had a second strong session as well. The biggies like CSL (ASX:CSL) were once again higher, while word that Wesfarmers (ASX:WES) was interested in Ramsay Health Care (ASX:RHC) saw it gain 3%.
ANZ Bank economists are forecasting an increase in monthly inflation growth to 0.8% for the March quarter compared to 0.6% in the December quarter, but a fall to an annual rate of 3.5% from 4.1% in December.
Local markets are higher, but there’s been some exciting corporate bloodletting which we should linger over for a bit.
The shock and roll which accompanies any investment with online retailer Kogan (ASX:KGN) pumped up the jam this AM, on a mixed but not entirely awful March quarter trading update.
Sales and revenue fell. Margins improved (by more than a third) and gross profit grew 14%.
The stock was down 25% by 11am.
Also worth a selfie is the slumped form of Cleanaway (ASX:CWY), which has fallen more than 10% giving back most of Tuesday’s gains after denying a Bloomberg-inspired rumour about being a great big, sexy buyout target for none other than the Seven Group.
The iron ore scene remains in general deterioration. Commodities are subdued in much the same way the Chinese economic rescue-plan is.
Rio Tinto (ASX:RIO) is just the worst. A tedious quarterly update from Andrew Forrest’s Fortescue (ASX:FMG) is also weighing, as is the unbearable heaviness of being the Big Australian, BHP (ASX:BHP). All down between 2% – 1.5%
Also stuttering is Ellison’s Mineral Resources (ASX:MIN) – short more than 2%.
ASX Sectors before Lunch on Wednesday
Both the Small Ords (XSO) and the XEC Emerging Companies indices were lower at lunchtime.
NOT THE ASX
Wall Street surged overnight as US corporate earnings success surprised and delighted and left most expectations in the dust.
The Dow Jones closed 0.7% higher, the S&P500 jumped 1.2% and the Nasdaq leaped 1.6%.
Materials was the only sector to close in the red on Wall Street last night. Base metal prices have pulled back sharply due to a lack of fresh Chinese monetary stimulus.
In company news, Spotify rallied 11.4 per cent after it delivered better than expected earnings and upgraded guidance going forward. UPS & GE Aerospace both delivered better than expected results closing 2.4 per cent & 8.3 per cent respectively. PepsiCo closed 2.9 per cent lower after reporting that recalls and a weaker lower-income consumer hurt demand in the US.
Tesla reported results after the bell. Tesla reported a 9 per cent revenue drop, its steepest decline since 2012. Despite challenges, Tesla plans to launch more affordable models and optimise existing production lines to achieve growth targets.
An all-round Like for that one. Sares are currently up 11%.
The stock had been down over -40% year to date and as early as Monday Musk was cutting EV prices yet again in an increasingly competitive market suffering from easing EV demand.
The International Energy Agency nonetheless believes one in every five cars sold globally in 2024 will be an EV; half of all cars in China and a quarter in Europe.
Expectations heading into Tesla’s result were very low, so a bounce will not have surprised.
Visa has also reported and its shares are up 2.6%.
Otherwise, Wall Street has its mojo back and is gradually recovering its run of losses. The S&P500 fell around -300 points from its high but has regained around 100.
Earnings results are helping, with 76% of the 20% of S&P500 companies reporting to date exceeding expectations.
Meta reports tonight.
A rosy results season could all become undone on Friday night nonetheless when March PCE inflation data are revealed. Still, economists do not expect the PCE to be as “hot” as the CPI, given different basket weightings among price segments.
The May Fed meeting then follows next week. The statement will be released on May Day.
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for 24 April [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
CODE COMPANY PRICE % TODAY VOLUME MARKET CAP CT1 Constellation Tech 0.002 100% 77,945 $1,474,734 OZM Ozaurum Resources 0.071 48% 1,230,936 $7,620,000 1MC Morella Corporation 0.004 33% 912,256 $18,536,398 LSR Lodestar Minerals 0.002 33% 300,000 $3,035,096 ACM Australian Critical Minerals 0.078 26% 251,674 $2,190,228 LNR Lanthanein Resources 0.005 25% 7,754,158 $7,819,636 NGS NGS Ltd 0.005 25% 693,203 $1,004,910 NPM Newpeak Metals 0.02 25% 950,952 $1,599,228 OSL Oncosil Medical 0.005 25% 1,050,000 $9,022,165 TIG Tigers Realm Coal 0.005 25% 685,328 $52,266,809 AN1 Anagenics Limited 0.011 22% 202,529 $4,151,883 MGA Metals Grove Mining 0.05 22% 62,601 $1,525,221 CG1 Carbonxt Group 0.067 22% 172,065 $17,870,691 ASE Astute Metals NL 0.041 21% 51,476 $13,957,663 LRD Lord Resources 0.055 20% 101,419 $1,982,583 FNR Far Northern Res 0.19 19% 20,162 $5,719,332 ZNO Zoono Group Ltd 0.07 17% 90,368 $12,823,444 RDN Raiden Resources Ltd 0.037 16% 15,673,748 $85,010,723 BOC Bougainville Copper 0.75 15% 305,046 $260,690,625 LYN Lycaon Resources 0.3 15% 689,677 $11,454,625 IND Industrial Minerals 0.155 15% 313,058 $9,282,600 T92 Terra Uranium 0.155 15% 219,005 $8,115,495 FHS Freehill Mining Ltd 0.008 14% 150,273 $20,970,911 WMG Western Mines 0.36 14% 1,214,791 $23,651,202 FRB Firebird Metals 0.16 14% 432,735 $19,930,596
Up 25%, NewPeak Metals (ASX:NPM) has placed 13.667 million shares at 1.5 cents to raise $205,000 cash to a new cornerstone investor, Mr Gerhard Redelinghuys, founder of Bowen Coking Coal Ltd, Queensland.
It’s part of the placement announced to the ASX on 15 April 2024, being the total amount of stock NPM has available.
A subscription for a further 6.333 million shares at the same price ($95,000) has been agreed to by Redelinghuys, which will be placed as a part of the total intended $500k placement, subject to approval at the company’s planned EGM in late May 2024.
Also up strongly, Carbonxt Group (ASX:CG1) has had a good March quarter, with an 8% increase in quarterly receipts.
Sales of Powdered Activated Carbon (PAC) were consistent q/q and up 56% on the prior period due to increased sales in non-coal fired power station channels.
Aales of Activated Carbon Pellets (ACP) were up 37% on the last quarter.
Elsewhere, Western Mines (ASX:WMG) says a ~750m deep drill hole hit ~700m of rock containing “disseminated nickel sulphide mineralisation and numerous sets of remobilised nickel sulphide veinlets” at the Mulga Tank project in WA.
These veinlets — confirmed by spot pXRF up to 42.2% nickel — appear oblique to the drill core “indicating a possible source at depth”. Exciting times for the small explorer.
Industrial Minerals (ASX:IND) has a maiden high purity quartz (HPQ) exploration target of 1.5-3 million tonnes grading 97-99% SiO2 at the Pippingarra quarry project in the Pilbara.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for 24 April [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap AXP AXP Energy Ltd 0.001 -50% 10,884 $11,649,361 FAU First Au Ltd 0.001 -50% 55 $3,323,987 RML Resolution Minerals 0.002 -33% 5 $4,829,990 88E 88 Energy Ltd 0.0035 -30% 515,274,831 $125,620,313 KGN Kogan.Com Ltd 5.21 -26% 3,724,161 $707,833,779 CYQ Cycliq Group Ltd 0.003 -25% 2 $1,430,067 RIL Redivium Limited 0.003 -25% 75,000 $10,923,419 NXS Next Science Limited 0.325 -23% 453,849 $122,511,943 EMUDA EMU NL 0.024 -20% 80,700 $2,024,771 RFT Rectifier Technolog 0.012 -20% 1,559,416 $20,729,759 RNX Renegade Exploration 0.012 -20% 4,760,000 $15,055,046 EME Energy Metals Ltd 0.1 -20% 964,938 $26,210,414 CCO The Calmer Co Int 0.004 -20% 300,000 $5,913,483 ECT Environmental Clean Tech 0.004 -20% 1 $15,859,052 MCT Metalicity Limited 0.002 -20% 829,982 $11,212,634 MKL Mighty Kingdom Ltd 0.004 -20% 14,823,856 $11,654,665 NRZ Neurizer Ltd 0.004 -20% 2,615,158 $7,882,054 TSL Titanium Sands Ltd 0.008 -20% 145,720 $19,937,302 GRL Godolphin Resources 0.029 -17% 327,112 $5,923,471 AQX Alice Queen Ltd 0.005 -17% 4 $4,145,940 VRC Volt Resources Ltd 0.005 -17% 6,075,327 $24,952,069 ID8 Identitii Limited 0.011 -15% 56,225 $5,593,094 ADG Adelong Gold Limited 0.003 -14% 5 $3,081,711 MEL Metgasco Ltd 0.006 -14% 242 $7,447,207 NAG Nagambie Resources 0.012 -14% 734,463 $11,152,899
ICYMI – AM EDITION
Lithium Universe (ASX:LU7) has moved to secure 18MW of green electricity from Hydro-Canada that will be used to power the production of greener, battery-grade lithium carbonate at its proposed Becancour refinery.
This follows the finalisation of power requirements for Train 1 of the proposed refinery under a comprehensive engineering study conducted by Hatch Engineering.
The first train will be capable of producing up to 15,000tpa of lithium carbonate to help close the North American lithium conversion processing gap.
Lord Resources (ASX:LRD) has raised $1.5m through a two tranche placement of shares priced at 5c each to institutional and sophisticated investors, along with existing shareholders.
Proceeds from the raising will be used for exploration at the company’s Horse Rocks and Jingjing lithium projects near the Mt Marion lithium mine.
Meanwhile, Mineral Resources (ASX:MIN) has completed due diligence on Horse Rocks as part of its agreement to acquire an initial 40% interest in the project.
At Stockhead, we tell it like it is. While Lithium Universe and Lord Resources are Stockhead advertisers, they did not sponsor this article.
