Market Highlights and 5 ASX Small Caps to watch on Monday

ASX to open higher after a rally on Wall Street on Friday
Bubs Australia has scored a significant export deal with the Biden government
Australia’s GDP data to be released on Wednesday

A strong surge on Wall Street on Friday is driving futures contracts of Australian shares higher this morning.

At 8am AEDT, the June ASX 200 futures contract is pointing up by 1.15%.

On Friday, US stocks had one of their best days in May ahead of Monday’s Memorial Day long weekend.

It was also the best week for US stocks since November of 2020, as all three major indices (S&P 500, Dow, and Nasdaq) rose by around 6% each.

Tech and Consumer Discretionary sectors led, as consumer spending in the US last month rose more than expected (0.9% actual vs 0.8% forecast).

Dell led the Tech sector, rising by 13% after better than expected earnings.

The market has now priced in a peak in US inflation, with positions in the bond market showing that traders are betting for a quicker end to the Fed’s rate hikes. In April, US inflation fell to 8.3% from 8.5% in March.

But some experts are still sceptical.

“It is still too early to call what the actual hiking path will be,” Peter Schaffrik of RBC Capital Markets told Bloomberg.

“Yet, the path forward for the second half of the year does not seem to be set in stone — giving markets room for interpretation for the time being.”

Oil prices rose by around 2% on Friday, with Brent crude now at US$119.40 a barrel.

Bitcoin is trading at US$29,400 at 8.30am AEDT after dipping below US$29k just a couple of hours ago.

Ahead this week, the ABS will release Australia’s GDP data on Wednesday, while the US will release its unemployment rate on Friday.

Check out Stockheader Christian Edwards’ report on what other data to expect this week, as well as upcoming IPOs on the ASX.

5 ASX small caps to watch today

Bubs Australia (ASX:BUB)
The US FDA announced it will exercise discretion for the immediate import of Bub’s Infant Formula products to the US. This will mean sales to the US of around 27.5 million bottles over the coming weeks across Bubs’ different product lines. At the moment, 500,000 tins are ready for immediate export.

I’ve got more good news: 27.5 million bottles of safe infant formula manufactured by Bubs Australia are coming to the United States.

We’re doing everything in our power to get more formula on shelves as soon as possible.

— President Biden (@POTUS) May 27, 2022

Paradigm Biopharma (ASX:PAR)
The biotech company has appointed Marco Polizzi as its new CEO. Polizzi brings to Paradigm over 30 years of experience in the pharmaceutical industry in various commercially focused roles. He also has a proven track record that is highlighted by several successful business and product launches in the US.

Vista Group (ASX:VGL)
Vista has entered into a deal to transition an existing major enterprise client in Latin America to the Vista Cloud platform. The transition is a transformational project for the enterprise client involving the transition of over 300 sites to the platform over time. No amounts were disclosed.

Cygnus Gold (ASX:CY5)
Recent exploration activities at Cygnus’ 800km2 Bencubbin Project in WA have returned significant coincident pathfinder geochemical anomaly, indicating lithium bearing pegmatites proximal to interpreted late granite intrusions. Immediate follow up auger work is planned to evaluate the full extent of the target ahead of drill testing.

Aruma Resources (ASX:AAJ)
Aruma has reported high-grade lithium and rubidium results at the Mt Deans Lithium Project in WA. Results include: Li2O to1.96% andRb2O to 1.42%.