• The ASX is set extend its decline on Monday
  • The all-crucial US inflation report due on Tuesday (US time)
  • Lyft plunged 36%


The ASX 200 is poised to continue its pullback on Monday following its 1.65% decline last week. At 8am AEDT, the ASX 200 Feb futures contract was pointing down by 0.15%.

On Friday, Wall Street was mixed as traders continue to drive Fed rate hike bets ahead of the US inflation report on Tuesday.

Although the consensus calls for further cooling inflation following the last three consecutive sharp slowdowns, analysts are still concerned it won’t go down as fast as expected.

“Traders are fearful that the Valentine’s Day inflation report will vindicate the Fed’s stance that ongoing rate increases will continue,” said Oanda analyst, Edward Moya.

There are indications the US economy is still going full steam ahead, which could end up being inflationary. A closely watched gauge of price expectations over the coming year, the University of Michigan Sentiment for example, rose to 4.2% from 3.9%.

In stock news, ride-hailing company Lyft plunged 36% after a dismal outlook during its earnings call. The company forecast that it will make $5 million-$15 million this quarter, versus the $85 million that analysts expected.

Adidas said it has US$1.3 billion worth of unsold Yeezy inventory it doesn’t want anymore.

Yeezy is the sportswear brand created by rapper Ye, who Adidas severed relationships with last year. CEO Bjørn Gulden said if it can’t sell the merchandise, Adidas could report its first loss in three decades.

Crude prices rose 2% after Russia said it will cut oil production by about 5% next month in response to Western sanctions. Russia has also stepped up its missile strike campaign in Ukraine over the last few days.

Gold prices continue to hover around the US$1,880 region as investors await this week’s inflation report.

Bitcoin was up 1.2% on the last 24 hours to US$21,955.

Crypto trading platform Kraken has settled charges with the US SEC for US$30m, and shut down all its crypto staking program as a result.

Earlier, the SEC alleged that Kraken’s crypto staking-as-a-service program amounted to offering unregistered securities products in the US.

Closer to home, the Japanese yen rallied after reports that Kazuo Ueda, professor and former Bank of Japan board member, will take over the governorship from incumbent Kuroda.

In Australia, the key headline this week will be the unemployment rate on Thursday.

Earnings season for large capped stocks will also start this week and today, among the companies to release their earnings are: JB HiFi, Beach Energy, and Carsales.


5 ASX small caps to watch today

DroneShield (ASX:DRO)
DroneShield has been admitted into MSCI Global Micro Cap Index, on Friday 10 February. The addition was made as part of regular index rebalancing, and the change will take place as of close of 28 February. The company said there will be increased investor awareness as a result of this inclusion.

Audinate (ASX:AD8)
Audinate delivered record revenue and EBITDA in the first half of FY23. Revenue increased 39.3% on pcp to a record US$20.6 million ($30.8 million). EBITDA was a record $4.3 million, up 109% on pcp. Audinate’s bottom line was a net loss after tax of $0.4 million, improved from $2.1 million loss in the pcp.

Encounter Resources (ASX:ENR)
Assays have confirmed lithium and other critical minerals at Junction Lithium Project in the Northern Territory. Assay results confirm LCT (lithium-caesium-tantalum) pegmatites at Junction, comparable to the host pegmatites of the Finnis lithium deposits in the Pine Creek region. Critical metal results include maximum assays: lithium (0.2% Li2O); rubidium (0.57% Rb); tin (500ppm Sn*); caesium (498ppm), tantalum (51ppm) and tungsten (740 ppm).

Red 5 (ASX:RED)
First-pass exploration drilling has delivered positive results at the Yandal South Gold Project. Drilling comprised two air-core programs totalling 5,708 metres. Assay results from initial samples have returned multiple intervals of gold mineralisation associated with quartz and visible sulphides along 1.2km strike, with gold zones remaining open at depth and along strike.

Azure Minerals (ASX:AZS)
Several diamond holes drilled in late 2022 have intersected lithium-bearing pegmatites. Mineralised pegmatite intersection returned 7.2m @ 1.51% Li2O with an internal high grade zone of 3.1m @ 1.87% Li2O. Significant quantities of visible spodumene were also identified in drill core.