Market Highlights and 5 ASX Small Caps to watch on Friday

Wall Street lifts as earnings beat forecasts

US stocks surged overnight as corporates posted strong quarterly results, while jobless claims fell to a 19-month low.

All three major US stock market benchmarks rose – the S&P 500 gained by 1.72%, the Dow Jones by 1.58%, and tech heavy Nasdaq was up 1.75%.

Despite supply chain and COVID-19 obstacles, US companies have so far reported better than expected quarter at this early stage of the reporting season.

Bank of America, Morgan Stanley and Citigroup all reported better than expected earnings overnight.

Meanwhile, the US initial jobless claims fell below 300,000 to 293,000, and are at a 19-month low. The data lent support that the US economy may be pulling out of the pandemic, with inflation having risen to 5.4% as reported yesterday.

In other markets, oil prices keep climbing with Brent crude now trading at US$84/barrel. The spot iron ore price is also staging a gradual comeback, up by another 2% to US$126/tonne, while base metal prices were trading higher with copper leading the way rising by 4% to US$10,131/t.

Eurozone shares +1.7%
US shares +1.7% on better than expected earnings and economic data
US 10 yr yld -3bp to 1.51%
Oil +1.3% to $81.5
Gold +0.2% to $1795.9
Iron ore +1.9% to $126
ASX futures +0.6%$A 0.7412 with $US index flat

— Shane Oliver (@ShaneOliverAMP) October 14, 2021

To cryptos, where Bitcoin is holding steady at US$57,500 at 8:00am AEST, despite the Bank of England warning that it could trigger a meltdown in the financial system.

“Of course $2.3 trillion (cryptos market cap)needs to be seen in the context of the $250tn global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems – sub-prime was valued at about $1.2tn in 2008,” said Sir Jon Cunliffe, a senior Bank of England policymaker.

ASX 200 to open higher on Friday

The ASX 200 looks set to open higher this morning, with futures markets (December contracts) pointing up by 0.63% at 8:30am AEST.

Yesterday, the Aussie benchmark climbed by around 1%, as tech stocks rallied with the ASX 200 Information Technology index jumping by more than 4% — its best session since early August.

In large caps news this morning, Treasury Wine (ASX:TWE) has flagged in its AGM that sales recovery in both Australia and the US will be delayed due to COVID obstacles, while providing no guidance for FY22.

Later today, the Aussie Bureau of Statistics releases the Monthly Business Turnover Indicator report, which is expected to provide a timely update on business sales or turnover in August using ATO data.

5 ASX small caps to watch today

Payright (ASX:PYR)

BNPL play Payright has continued its strong run, posting a record quarterly Gross Merchandise Value of $27.6 million, up 72% on prior corresponding period (pcp). The company says its sees further growth over the coming months as Australia emerges gradually from lockdowns.

BCI Minerals (ASX:BCI)

The company has received approvals for $740m of project finance debt for the Mardie Project. Total funding of $1.2Bn is required to develop the project to a capacity of 5.35Mtpa of salt and 140ktpa of Sulphate of Potash. The loan has been approved by various lenders including Export Finance Australia and the Northern Australia Infrastructure Facility.

My Food Bag (ASX:MFB)

The NZ-based online food delivery services company reported $98.4m in revenue for the half year, which was in line with its expectations. The company has reaffirmed its full year FY22 revenue, despite ongoing uncertainties surrounding COVID-19 lockdowns.

Essential Metals (ASX:ESS)

The company says RC drill holes completed in the upper zone of the Cade deposit have returned excellent lithium assays including: 21m @ 1.08% Li2O from surface, and 24m @ 1.29% Li2O from surface.

Alchemy Resources (ASX:ALY)

The company revealed that its subsidiary Goldtribe has won three ballots for three key exploration licence applications. These tenements form part of Alchemy’s Lake Rebecca Project which sits  strategically between three major gold deposits and spans 50 strike kilometres covering 562km2.

At Stockhead we tell it like it is. While BCI Minerals is a Stockhead advertiser, it did not sponsor this article.