Market Highlights and 5 ASX Small Caps to watch on Thursday
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US stocks rallied strongly overnight, as investors digested the central bank’s decision to speed up its tapering program and hike rates next year.
Fed Reserve governor Jerome Powell said the bank will reduce its monthly bond purchases at twice the pace it previously announced, with the possibility of ending them altogether by March 2022.
On the rates front, the dot plot suggests the Fed would raise the US Fed funds rate three times in 2022, each time by 0.25%.
All this seems to have been priced in by the market as all three major US stockmarket benchmarks rose on the news – the S&P 500 by 1.63%, the Dow by 1.08%, and tech heavy Nasdaq by 2.15%.
The yield on the benchmark 10-year US treasury also jumped 3 basis points to 1.47%.
Bitcoin meanwhile, is up around 1.3% and is trading at US$49,000 this morning at 8am AEDT.
At the time of writing, tthe entire cryptocurrency market cap is up 4.9 per cent compared with this time yesterday.
The Bank of England has sent a dire warning to crypto investors, saying that “bitcoin could be worthless”, and people investing in cryptos should be prepared to lose everything.
The ASX 200 looks set to rise at the open this morning, with futures markets (December contracts) pointing up 0.50% at 8:30am AEDT.
Yesterday, the local index finished 0.7% lower, with a steeper fall of 1.4% in the microcap Emerging Companies index.
There were more falls in tech as Afterpay (ASX:APT) dropped further below $90 to its lowest levels since May.
On the IPO front, four companies will be making their ASX debut today:
AVADA Group (ASX:AVD), a traffic management tech company that raised around $32m at $1 a share.
Qualitas Limited (ASX:QAL). This company operates in the alternative real estate investment management sector on behalf of fund investors. It raised $335m at $2.50.
Ronin Resources (ASX:RON), a mineral explorer that raised $5m at 20c.
XPON Technologies (ASX:XPN). This company provides corporate and mid-tier enterprises with cloud based marketing technology solutions. It raised $12.5m at 20c.
We’re also expecting a speech from RBA boss Philip Lowe later today titled “The RBA and the Australian Economy”.
In large caps news this morning, Qantas (ASX:QAN) has forecast a first half FY22 EBITDA loss of between $250 million to $300 million.
The lithium miner has signed a binding takeoff agreement with Traxys, for 100% of its lithium hydroxide (5,000tpa) production from the company’s planned Phase 1 Project. The agreement also includes Traxys acting as agent for caesium sulphate solution (400tpa), with scope to be expanded to other products.
The medtech company won a $409k pharmacokinetic testing contract with Linear Clinical Research. Under the deal, PIQ will test a novel drug for degenerative and inflammatory diseases on behalf of Linear, the Australian arm of pharmaceutical company Sironax.
Zelira Therapeutics (ASX:ZLD)
The cannabis company has expanded into the growing New Zealand cannabinoid-based medicines market, after signing an exclusive distribution agreement with NUBU Pharmaceuticals. Under the 5-year deal, NUBU will purchase a minimum order totalling over A$2.6 million (with A$178k in Year 1).
Predictive Discovery (ASX:PDI)
The gold explorer reported new gold discoveries at its Bankan Gold Project located within 3km of its existing 3.65Moz Mineral Resource Estimate. Assay results include: 7m @ 8.5g/t Au from 38m, including 2m @ 24.2g/t Au from 40m.
Skynews Network (ASX:SKT)
Sky has confirmed the sale of its Mt. Wellington properties for $56 million to Goodman Property Trust. The move is part of the company’s strategy to consolidate its presence into a central Auckland site.