Market highlights and 5 ASX small caps to watch on Monday

The ASX 200 will open slightly lower on Monday
US non-farm payrolls surprise on the upside, but Wall Street finishes mixed on Friday
Ahead this week, earnings season starts for ASX blue chips

Local shares are set to open lower today. At 8am AEDT, the ASX 200 August futures is pointing down by 0.15%.

Wall Street was mixed on Friday despite strong non-farm payrolls data for July which jumped past forecasts. According to the US Department of Labor, non-farm payrolls increased by 528,000 in July versus the forecast of 250,000.

These figures are expected to add a bit of complications into the Fed’s next monetary policy decision in September.

“Fed officials were already pushing back on the idea of a Fed pivot, and now it seems they will be debating whether they need to be even more aggressive to tackle inflation given how strong the labor market is performing,” said Oanda analyst, Edward Moya.

According to Commsec, US rate futures have priced in a 69% chance of a 75bps hike in September, up from about 41% before the payroll data.

The strong jobs data also supported oil prices on Friday, with crude prices rising by around 0.5%.

In equities, the S&P 500 was down 0.16%, the Dow Jones up 0.23% while tech heavy Nasdaq fell 0.50%.

Among the best stock performers on Friday was riding app Lyft as it surged 17% after reporting the highest earnings in its history. The company’s adjusted EBITDA for Q2 was $79.1 million, up by $55.3 million compared to the pcp.

Back home, the ASX blue chips earnings season is also about to get under way. Commonwealth Bank and AMP will report their results on Wednesday and Thursday respectively.

Experts will especially be looking at two things – how inflation has affected earnings margins and the companies’ profit guidance.

“Margin degradation, I think, is going to be a huge theme during this reporting season,” RBC Capital’s head of equities Australia, Karen Jorritsma told the ABC.

“I think it’s a case of the market having to get used to margins potentially going backwards for the first time in a long time,” she said.

In other markets, Bitcoin is currently trading at US$23,285 as we enter a relative quiet week of economic data.

Looking ahead this week, the Australian consumer confidence index will be released tomorrow while the weekly payroll data is out on Thursday.

According to the ASX, new stocks expected to list this week include Bayrock Resources (ASX:BAY) on Thursday, and Australia Sunny Glass Group (ASX:AG1) on Friday.

5 ASX small caps to watch today

Booktopia (ASX:BKG)
With the Lidcombe lease ending in 2023, Booktopia says it’s taking the opportunity to move its customer fulfilment to a larger 20,000sqm cleanskin facility in the same area. This new facility will underpin the company’s future distribution capacity, and is expected to drive significant operational efficiencies.

Singular Health (ASX:SHG)
SHG will divest of its 50% stake in the GeoVR joint venture (JV) to JV partner TerraCentric. The deal has an indicative purchase price of $500k and a proposed ongoing licence fee or royalty. The intellectual property (IP) that underpins GeoVR allows for the 3D visualisation in the mining and resource industry.

Kazia Therapeutics (ASX:KZA)
Interim data from the ongoing Phase I clinical trial of paxalisib has shown that all nine evaluable patients experienced complete or partial response, representing an overall response rate (ORR) of 100%. The trial is studying the combination of paxalisib and radiotherapy for the treatment of brain metastases. The data has been accepted for an oral presentation at the upcoming 2022 Annual Conference on CNS Clinical Trials and Brain Metastases in Toronto.

Nexus Minerals (ASX:NXM)
Near surface broad high-grade gold was intersected at the company’s Crusader-Templar Project in WA. Assay results include: 20m @ 2.83g/t Au (within 55m @ 1.47g/t Au from 17m), and 9m @ 5.02g/t Au (within 36m @ 1.65/t Au from 84m).

PolarX (ASX:PXX)
PolarX is currently ‘cutting’ multiple continuous channel samples to test highly prospective outcropping mineralised vein systems at the Golden Staircase target. Mapping shows that the vein swarm covers an area of at least 300m x 200m. Assays are expected in 4 to 6 weeks.