Market highlights and 5 ASX small caps to watch on Thursday

Wall Street mixed as US Federal Reserve says inflation is transitionary

US stock markets finished in mixed territories, as investors digested US Fed chairman Jerome Powell’s testimony before a House panel.

The Dow Jones finished 0.13% higher, S&P 500 climbed by 0.12%, but tech-heavy Nasdaq fell 0.22%.

Powell said he expects inflation to ease, but would not hesitate to raise interest rates to keep it under control.

Shares in US buy-now-pay-later (BNPL) stocks have continued their slide, with Affirm falling another 2.5%, and Afterpay’s US listed shares fell by 4%.

Earnings season continues, and after solid earnings from Goldman Sachs and J&P Morgan yesterday, other US banks also released their quarterlies overnight.

Citigroup, Wells Fargo, and Blackrock all topped expectations, but Bank of America’s revenue took a hit. Banks’ results are usually used as an indicator of the state of the economy.

Meawwhile, the deadlock in oil markets has finally been broken after Saudi Arabia and UAE reached a deal that would lift global supplies over the next month. Oil prices fell 2% on the news.

To cryptos, where Bitcoin is falling again, and is currently trading at US$32,900 level at 8am AEST, from the US$32,500 level on Wednesday.

Ethereum has got the nod in Brazil, becoming Latin America’s first 100% Ethererum ETF. Crypto investment firm QR Capital will list the ETF on Brazil’s B3 stock exchange, and it will go live with the ticker QETH11.

ASX 200 set to open lower on Wednesday

The ASX 200 looks set to open marginally lower at the open this morning, with futures markets (September contracts) pointing down by 0.03 per cent at 8:30am AEST.

Yesterday, the benchmark index closed at 7,355 which is 0.31 per cent higher, while the ASX Emerging Companies Index closed 0.14 per cent higher at 2,193.

In big cap news this morning, Sydney Airport (ASX:SYD) has rejected the $22 billion takeover bid from an investment consortium, saying the offer “is not in the best interest of shareholders.”

5 ASX small caps to watch today

Pure Hydrogen (ASX:PH2)
The company announced that it will swap 21% of its share in the Serowe Gas Project for a 19.99% post-IPO interest in BotsGas (to be renamed Botala Energy). BotsGas intends to list on ASX, raising $7 million in new funds.

Rhythm Biosciences (ASX:RHY)
The medtech company has just established a 100% owned US domicled entity, IchorDX, Inc., as part of its US market entry plan. The new entity will provide a more focused commercial pathway for ColoSTAT in one of the world’s largest diagnostic markets.

Delta Drone (ASX:DLT)
The company is expanding its operations in Mali to deliver advanced LIDAR (advanced light detection and ranging ) services for Barrick Gold. Whilst small in dollar value ($25,000), the contract adds to Delta’s list of countries of operations with 11 countries using its services.

Coventry Group (ASX:CYG)
The industrial supplies distributor reported a solid quarter, with group sales up +20.2% on the prior year and up +17.1% on prior year excluding acquisitions.

Dateline Resources (ASX:DTR)
The company has completed a review of US Geological Service data in conjunction with the acquisition of the Colosseum Gold Mine in California. Radiometric anomaly was identified within the Colosseum tenement, and the potential for rare earths in addition to the known gold occurrences is a positive advancement for the project.