• The ASX 200 is set to open higher today, extending Friday’s 2% gain
  • US Fed Chairman Jerome Powell has ruled out a 75bp hike for now
  • eToro’s analyst Josh Gilbert is still optimistic about the current market

ASX to extend Friday’s gain as Wall Street rallies

Aussie shares are set to extend their gains on Monday after a US Fed Chairman Jerome Powell-fuelled rally on Wall Street.

At 8am AEDT, the ASX 200 June futures is pointing up by 0.75%.

On Friday, the tech-heavy Nasdaq rose by 3.82% and had its best day since November 2020, after Powell said he would stick to the 50 basis points hike script and leave the 75bp off the table for now.

Other major US stock market indices also rose on his comments – the S&P 500 closed 2.39% higher while Dow Jones was up 1.47%.

The cryptocurrency market, which had its worst week since May 2021, also stabilised with Bitcoin surging to just a tick above US$31k as at 8am AEDT.

The crypto market was rocked last week after the total collapse of algorithmic stablecoin TerraUSD/Luna left bag holders with billions in losses.

eToro’s Australian market analyst, Josh Gilbert, said Bitcoin had been quite resilient so far in 2022, given the current state of the macro environment – but is now feeling the full effect of the market correction.

“Bitcoin’s rising correlation with other asset classes is climbing, such as equities and stocks. In that sense, Bitcoin is the victim of its own success, with more institutions getting involved and therefore trading differently from around 3-4 years ago.”

In commodities, oil markets remained volatile but Powell’s comments calmed sentiment and the benchmark Brent crude has now settled at the US$111 level.

Experts said the demand slowdown caused by China’s ongoing lockdown would ironically help stabilise oil prices, particularly as some Russian supply might be lost due to embargoes.

Gilbert also remains optimistic about the bigger picture.

“Fundamentals, in our view, are stressed but still secure, with market volatility clouding what has been a decent earnings season. There has been a 10 per cent earnings growth across the board and 79 per cent of companies have already beaten Wall Street earnings estimates,” he said.

All eyes are now on another Fedspeak scheduled for 17 May (US time), with Fed Chairman Jerome Powell giving a talk at a Wall Street Journal conference.

5 ASX small caps to watch today

Matador Mining (ASX:MZZ)
Matador has increased its landholding in Newfoundland following a comprehensive internal targeting workshop. The company increased its landholdings in Newfoundland by over 6% or 62km2 to a total of 1,033km2.

Metals Australia (ASX:MLS)
Initial 44-hole RC drilling program testing the Manindi Lithium-Caesium-Tantalum (Rubidium) (LCT) pegmatites has been completed at the Manindi project in WA. Rockchip results of up 2% to 2.30% Li2O and 0.70% Rb were previously reported from this zone. Assay results are expected shortly.

Nexus Minerals (ASX:NXM)
High-grade gold has been intercepted near surface and at depth at the Crusader-Templar project in WA. Drilling results include: 7m @ 18.68g/t Au (within 29m @ 5.29g/t Au from 31m), and 8m @ 13.76g/t Au (within 13m @ 8.54g/t Au from 267m).

PharmAust (ASX:PAA)
PharmAust’s cGMP (current Good Manufacturing Practice) grade monepantel (MPL) tablets specifically designed for the Motor Neurone Disease clinical trial in Melbourne have arrived. PharmAust is currently undergoing Phase 1 clinical trial of MPL for people with MND, following a $900k grant from FightMND charity last year.

Classic Minerals (ASX:CLZ)
Classic says it has mined 1,011 ounces of gold from its bulk sample mining operation. Around 6,504 tonnes of ore were mined at an average grade of 4.82 g/t, with 48,970 tonnes of waste and ore extracted in total.