Wall Street higher as US Fed firms up November tapering

US stock markets were higher overnight, as US Fed Chairman Jerome Powell signalled the bank would start tapering its asset purchases starting in November, which would last until the middle of 2022.

Powell also said there is little direct exposure to debt in the US financial system from the Evergrande fallout, saying the issue is “particular to China”.

Evergrande’s Frankfurt-listed shares jumped 40% on the news that it would be making coupon payments on its bonds today.

On the interest rates front, half of Fed policymakers believe interest rates would be raised sometime next year, with the first hike being 0.25%.

Powell’s comments gave a sense of certainty to the markets, who have been anxious about an earlier than expected tapering and rate hike.

The Dow Jones rose by 1%, S&P500 by 0.95%, while tech heavy Nasdaq climbed 1.02%.

In other markets, spot iron ore price rebounded 15% following news on Evergrande’s coupon payment, while oil prices lifted 2.5%.

To cryptos, where Bitcoin is bouncing back to US$43,300 at 8:00am AEST this morning, from US$41,300 yesterday.

It’s been a better day for Bitcoin and crypto broadly, but nerves are still frayed. The entire crypto market cap, meanwhile, is valued at around US$2.02 trillion and up about 1 per cent since this time yesterday.

ASX 200 to open higher on Thursday

The ASX 200 looks set to open higher his morning, with futures markets (December contracts) pointing up by 0.19% at 8:30am AEST.

Yesterday, the Aussie benchmark had another positive session, rising by 0.3%.

Explorer Genesis Minerals (ASX:GMD) was the standout performer yesterday, more than doubling after announcing a $20.8m funding package.

In a speech by assistant governor Michele Bullock yesterday, the RBA sounded a warning on Australia’s high levels of household debt in the wake of the post-COVID surge in house prices.

She said the central bank is “continually assessing” possible regulatory measures to address financial stability risks, as housing prices have surged by 19.9% in Australian capital cities over the last 12 months.

On the IPO front, scheduled to list today at 12pm AEST is WA gold play, IRIS Metals (ASX:IR1).

The explorer’s focus is the Kookynie district, which has a reputation for hosting high grade gold. You can read more here.

5 ASX small caps to watch today

Nexion (ASX:NNG)
The hybrid cloud computing provider announced a partnership with NetApp, a global player in cloud services. The two companies will deliver Keystone, which is a new Storage-as-a-Service product for the Australia and New Zealand market. NetApp is the third global technology company headquartered out of the US to select Nexion as its principal partner in the region, the company said.

Zelira Therapeutics (ASX:ZLD)
The cannabis company has launched a new acne product to the market called RAF FIVE. This is the first product to be launched by Zelira’s dermatology subsidiary, which will address a $US11 billion acne medication market worldwide.

Talga Group (ASX:TLG)
The battery anode company has commenced trial mining at its 100% owned Vittangi graphite project in north Sweden. The trial mining campaign is aiming to extract an approximate 2,500-tonne sample of natural graphite. The raw ore will then be processed and refined into the company’s flagship Li-ion battery anode product Talnode.

Clean Teq Water (ASX:CLQ)
The clean water tech company has been awarded a contract to deliver an EVAPX system treat wastewater and recover clean water at an agricultural by-product processing facility in NSW. The $1.6m contract was awarded by Loris H Hassall Pty Ltd.

Great Southern Mining (ASX:GSN)
The company said significant bedrock gold mineralisation has been intersected at all four regional targets tested at the Duketon Gold Project. Standout intersections include [email protected]/tAu, and [email protected]/tAu.

 

At Stockhead we tell it like it is. While Nexion and Great Southern Mining are Stockhead advertisers, they did not sponsor this article.

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