Market highlights and 5 ASX small caps to watch on Friday

• Wall Street advances as President Biden catches Covid
• The ECB raises its rates for the first time since the year 2000
• Oil prices tumble 3% as Nord Stream 1 resumes

Local shares are set to open marginally higher today. At 8am AEDT, the ASX 200 July futures is pointing up by 0.05%.

Overnight, US stocks advanced by around 1% as President Biden caught Covid.

Folks, I'm doing great. Thanks for your concern. Just called Senator Casey, Congressman Cartwright, and Mayor Cognetti (and my Scranton cousins!) to send my regrets for missing our event today.

Keeping busy! pic.twitter.com/uf7AsOg571

— President Biden (@POTUS) July 21, 2022

European stock markets were mixed following the ECB’s (European Central Bank) rate hike.

After years of cautious policy moves and dovish caveats, the ECB super-charged its tightening lift-off, exiting negative rates for the first time in 12 years.

The ECB raised its key rate by 50 basis points, the biggest since 2000, as it confronts 8.6% inflation in the Euro bloc.

The 50bp was a little surprising to traders as the prior guidance given by the ECB was at 25bp.

“That’s not to say it wasn’t the right move, in fact it was very welcome,” says Oanda market analyst, Craig Erlam.

The ECB’s president, Christine Lagarde, said: “We expect inflation to remain undesirably high for some time, owing to continued pressures from energy and food prices, and pipeline pressures in the pricing chain.”

In corporate news, Tesla rose another 10% today following its earnings report yesterday and the company’s decision to sell 75% of its Bitcoin holdings, worth US$935 million. United Airlines slumped by 10% after a Q2 earnings miss.

Oil prices tumbled 3% with the benchmark Brent crude now trading at just below US$104 a barrel. This came following the resumption of gas flows through Nord Stream 1, a key pipeline that pumps Russian gas to Europe.

“It does provide some relief in the short-term but Europe remains vulnerable to the whim of the Kremlin, something I suspect is not accidental or going to change,” said Erlam.

“Energy anxiety is going to remain a prominent feature of the months ahead as Europeans pray for another moderate winter.”

Looking ahead today, S&P Global Australia PMI numbers will be released, a key index that gauges the prevailing direction of the manufacturing and service sectors in the country.

5 ASX small caps to watch today

ECS Botanics (ASX:ECS)
The medicinal cannabis company says it has secured a $2 million loan from the National Australia Bank. ECS has also agreed to sell its hemp food and wellness business for $250,000 (plus inventory on hand) to Ananda Food, a subsidiary of Ecofibre. Meanwhile, the sale of ECS’ Tasmanian medicinal cannabis facility and the farm has commenced through agent CBRE, with a high level of interest received.

Elmore (ASX:ELE)
Elmore’s 100% owned Peko Iron Project has executed an ore sales agreement over the magnetite concentrate from Peko based on the 65% Fe index, which trades significantly higher than the average iron ore price. Average grade of product produced to date is circa 66% Fe.

Jervois Global (ASX:JRV)
In Q2, minerals miner Jervois delivered US$11.9m of adjusted EBITDA, impacted by favourable feed cost realisation offset by lower sales volumes. For the full year of FY22, its EBITDA guidance is US$35m-40m, compared to US$50m-55m in the previous guidance.

iTech Minerals (ASX:ITM)
Further drill results from the Caralue Bluff Kaolin Prospect have returned thick, high-grade intervals of REE (rare earth elements) mineralisation. Results include 12m @ 2,343 ppm TREO from 9m, and 17m @ 1,774 ppm TREO from 4m.

Centre Point Alliance (ASX:CAF)
The financial services consulting company reported a preliminary unaudited FY22 EBITDA of $7.2 million, an increase of more than 100% from $3.4 million in FY21.