Market highlights and 5 ASX small caps to watch on Monday

Dow Jones extends record high, yields at one-year high

The flip flop between higher yields and tech stocks continued, with the tech-heavy NASDAQ slumping by 0.59% on Friday after 10-year Treasury yields jumped to 1.64%.

The 1.64% rate was the highest level in one year, widening the gap with two-year yield to 1.48%. A steepening yield curve is usually a sign of a recovery, but also signifies rising inflation expectations.

The so-called FAANG stocks were sold off, with Facebook and Alphabet (Google) losing around 2%. Blue chip Dow Jones added to its all-time high, rising by 0.9%, while financials gained on the S&P500 index, which rose by 0.1%.

Investors were coming back to cyclical stocks after the $1.9 trillion Rescue Package was signed into law, and President Biden appeared on national television announcing that all adult Americans can get a shot before May 1.

Iron ore dropped again on Friday by 3%, after China shut down steel mills in the top steelmaking city of Tangshan last week. This will put more pressure on ASX iron ore stocks.

Bitcoin at fresh record high

Bitcoin meanwhile, passed through the US$60,000 level for the first time over the weekend, trading as high as US$61,012.

It has since retreated to US$59,972 at the time of writing, 8am AEDT.

The crypto price has now more than doubled since the beginning of 2021.

Meanwhile, crypto exchange Coinbase is expected to go public on the NASDAQ with a rumoured valuation of US$100 billion, the biggest IPO valuation since Facebook’s listing in 2012. The exchange caters to more than 43 million crypto traders.

Closer to home

The ASX200 rose across the board on Friday, higher by 0.79%. It’s set to open slightly lower this morning.

Wind energy stock Tilt Renewables Limited (ASX:TLT) has entered into an agreement with Powering Australian Renewables (PowAR) and Mercury NZ (ASX:MCY), under which PowAR will acquire Tilt Renewables’ Australian business and Mercury will acquire Tilt Renewables’ New Zealand business. Tilt Renewables shareholders will receive NZ$7.80 per share in cash.

The Quad had its inaugural meeting over the weekend, which may exacerbate Australia’s strained relationship with China, and jeopardise exports even further. The Quad is a recently formed strategic forum made up of Australia, US, Japan, and India.

Watch for some form of a Jobkeeper extension to be announced by the government this week.

5 ASX small caps to watch today

Little Green Pharma (ASX:LGP)
The cannabis play has agreed to acquire two properties underlying its southwest WA cultivation and manufacturing facilities as well as two adjacent properties, with a total land area of approximately four acres. The purchase is intended to help service higher-than-expected international and domestic market demand for LGP cannabis flower medicines.

QEM Limited (ASX:QEM)
Mining explorer QEM announced that it has commenced studies into green hydrogen opportunities on site at its flagship 100%-owned Julia Creek vanadium and oil shale project in North Queensland. The studies will investigate the financial and regulatory requirements of the company to produce hydrogen on site at Julia Creek using a “green” solar-powered electrolyser.

Strike Energy (ASX:STX)
The company announced it has been selected as the successful bidder for Perth Basin block L20-3 at the end of the WA Petroleum Acreage Release 1 of 2020. The block is the last remaining unheld acreage in the high-profile Permian Gas Fairway, and is flanked by highly prospective gas discoveries.

Wiluna Mining (ASX:WMX)
The company said it has formally agreed to enter a five-year alliance with world leading contractor Byrnecut, for the performance of underground development and production mining services at the Wiluna Mining Complex. The alliance will focus on development and refinement of the long term mine plan for the maximum efficiency and staged capitalisation. It will allow Wiluna to amortise agreed mine establishment capital over the full period of the alliance.

CleanTeq (ASX:CLQ)
CleanTeq was awarded a contract valued in excess of $1 million to undertake the procurement of the existing DESALX technology water plant in Oman. The water treatment plant is designed to remove a range of deleterious elements from up to 200 tons of waste water per day.

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