Market Highlights: Two uttered words that crashed the market, and 5 ASX small caps to watch today
The ASX is poised to plunge on Wednesday, tracking movements in New York. At 8am AEST, the ASX 200 Dec futures contract was pointing down by 1.65%.
On Wall St, the US Fed unleashed a fourth consecutive jumbo 75bp rate hike, which was in line with expectations.
But it was Fed boss Jerome Powell’s words that spooked investors and caused the market to plunge.
Initially Powell told reporters that a slowdown in rate hikes could happen “as soon as the next meeting or the one after that”.
But towards the end of his speech as investors hung on to his every word, Powell contradicted himself by saying it was “very premature” to consider pausing rate increases.
The markets immediately plunged, sending the Nasdaq to crash 3.5%, the S&P 500 by 2.5% and Dow Jones by 1.6%.
All major stock indices across Europe also slipped by around 1% each.
— Federal Reserve (@federalreserve) November 2, 2022
The Fed’s move last night has pushed the Fed funds rate to 4%. Stocks could struggle from here as the risk of the central bank taking rates above 5% are clearly still on the table.
Elsewhere, a US ADP job report released overnight showed private sector job growth remains strong, led by medium-size companies. The headline number was higher than forecast and served as another reminder that the US labour market remains robust.
“Job momentum will spell trouble for traders expecting the Fed to convincingly signal they will downshift to a slower pace of tightening in December,” said OANDA analyst Edward Moya.
Global shipping company Maersk says that it’s seeing container demand slowing as recession looms. The Danish company cut its forecast for container demand this financial year, even as it beat Q3 earnings forecast.
“Global recessionary fears are intensifying, and that should spell trouble for global transportation and logistics demand,” Moya said.
In other markets, crude oil jumped 1% overnight with Brent now trading at US$95.66 a barrel. Gasoline inventories also declined more than expected, and hit the lowest levels since November 2014.
Bitcoin fell by almost 2% after the Fed report, but continues to trade above the $20k level at to US$20,155.
Meanwhile, news has emerged that the world’s largest bitcoin options exchange, Deribit, was hacked for close to $28 million.
Deribit hot wallet compromised, but client funds are safe and loss is covered by company reserves
Our hot wallet was hacked for USD 28m earlier this evening just before midnight UTC on 1 November 2022.
— Deribit (@DeribitExchange) November 2, 2022
Onto today’s session where new vehicles data for October and Australia’s international trade for September will be released.
Viridis Mining and Minerals (ASX:VMM)
The NSW Resource Regulator has provided Assessable Prospecting Operations approval for the drilling program at the Smoky Project. The planned 1,800m aircore drill program is to commence at Smoky Project in early 2023, subject to drill rig availability.
Leo Lithium (ASX:LLL)
Resource drilling results at Danaya reveal thick zones of high grade mineralisation. Spodumene pegmatite intercepts greater than 60 m down-hole width and include: 72 metres at 1.77 % Li2O from 71 m, and 118 metres at 1.53 % Li2O.
Immutep announced that a late-breaking abstract relating to its phase II TACTI-002 trial has been accepted for an oral presentation at the Society for Immunotherapy of Cancer (SITC) Annual Meeting 2022. The oral presentation will include new clinical data for efit, its first-in-class soluble LAG-3 protein, in combination with pembrolizumab in 1st line non-small cell lung cancer (NSCLC) patients. The meeting will be held in Boston from 8 to 12 November 2022.
Forbidden Foods (ASX:FFF)
FFF has has formally launched the flagship Amazon US online store for its plant-based Blue Dinosaur range. The Amazon US launch complements existing Blue Dinosaur ecommerce site, and the company says this will unlock an additional platform to underpin the its long-term high-margin revenue growth strategy.
Galileo Mining (ASX:GAL)
Assays have been returned from the first of four RC drill holes. Extensive 50 metre drill intersection from NRC346 containing higher grade nickel intervals include: 50metres @0.32% nickel from 95m, and 2 metres @0.50% nickel from 111m.