Market Highlights and 5 ASX Small Caps to watch on Thursday

Wall Street leaps as Fed hikes rate

US stocks surged overnight, after the US Fed increased its cash rate by 0.25% and signalled six more rate hikes to follow.

It was the first time in three years the Fed had increased rates, as it tries to control the highest US inflation in 40 years.

Fed Chairman Jerome Powell said that he won’t stop until rates are between 1.75% and 2% by end of the year.

He also said that recession is unlikely to happen within the next one year, saying the US economy was strong.

“Inflation is likely to take longer to return to our price stability goals than previously expected,” Powell said.

“But, in my view, the probability of a recession within the next year is not particularly elevated. And why do I say that? Aggregate demand is currently strong and most forecasters expect it to remain so,” he added.

The benchmark 10-year US Treasury yield jumped to 2.18%, while all three major US indexes rallied strongly.

The S&P 500 was up by 2.24%, the Dow by 1.55%, and tech heavy Nasdaq by 3.37%.

Oil prices continue to ease after skyrocketing in the wake of the Russian invasion of Ukraine. Overnight, benchmark Brent crude slashed another 2% to trade at US$97.85 a barrel.

The Aussie dollar rallied strongly on expectations the RBA would follow the Fed’s move. At the time of writing, the AUD/USD is trading at US 72.9c.

The spot iron ore price jumped 7% to $US145.45 a tonne after the Chinese government issued a statement late yesterday saying that it will work to keep stock markets stable and support overseas listings.

Bitcoin meanwhile rose by 5% to US$41,172 at 8.30am AEDT.

Media company South China Morning Post is spinning its blockchain-based NFT business to form a new company led by its current chief executive.

Read the rest of that story here on Coinhead.

ASX 200 to open higher on Thursday

The ASX 200 is set to open higher this morning, with the March futures pointing up by 1.47% at 8.30am AEDT.

Yesterday, local shares gained 1% as sentiment shifted towards riskier assets with all 11 sectors in the green. The Tech sector was the best performing, gaining more than 3%.

Today, the all-important February ‘Labour Force’ publication will be issued.

CBA economists expect Aussie employment to have increased by ~40,000 jobs in Feb. The unemployment rate is expected to have fallen from 4.2% in Jan to a record low (since Feb 1978) of 4% in Feb.

5 ASX small caps to watch today

Good Drinks (ASX:GDA)
Good Drinks announced a partnership with C&C International, a trading name of Wm. Magner, to become the exclusive importer of the Magners Irish Cider brands in Australia. C&C is a FTSE 250 company headquartered in Dublin, and is listed on the London Stock Exchange.

intelliHR (ASX:IHR)
The human resources tech company reported a strong Q3, with a YoY quarterly annual recurring revenue growth of 162% to $6.5m. The company also scored notable customer wins during the quarter, which include Newable, Southbank Centre and Loreto College.

Veris Ltd (ASX:VRS)
The consulting services company has been awarded the M6 Motorway, Stage 1 contract in Sydney by Transport NSW. The initial contract value is $5 – $8 million, with potential for additional growth.

Arrow Minerals (ASX:AMD)
Electrostate will purchase 90% of Arrow (Malinda) Pty Ltd, the holding company of the Malinda Lithium Project in WA, for total cash consideration of$500k. Arrow will retain a 10% free-carried interest in Arrow (Malinda) Pty Ltd through to a decision to mine.

Tambourah Metals (ASX:TMB)
Tambourah has advanced its lithium exploration at its Russian Jack Project in the eastern Pilbara. More than 320km2 of the tenement is still under explored, and extensive outcropping pegmatites, felsic intrusives and quartz veining delineated by GSWA mapping currently remain untested.