Market Highlights and 5 ASX Small Caps to watch on Thursday

ASX to rise this morning despite sharp falls on Wall Street
US CPI is persistently high, but may have reached a peak
Bitcoin falls below US$30k

Sticky US inflation drags Wall Street lower

Aussie shares are set to open marginally higher this morning, despite a sharp drop on Wall Street overnight.

At 8am AEDT, the ASX 200 June futures is pointing up by 0.20%.

US investors ditched tech and growth stocks once again, on the back of persistently high inflation reading.

At the close, all three major US stockmarket indices fell – the S&P 500 by 1.65%, the Dow by 1.02%, and tech heavy Nasdaq by 3.18%.

Although annual US CPI fell from 8.5% to 8.3% in April, both the headline and core CPI rose 0.3% and 0.6% respectively in April, higher than forecast.

The high CPI reading prompted US President Biden to declare that inflation is the number one problem facing American households right now.

“I want every American to know that I’m taking inflation very seriously, and it’s my top domestic priority,” Biden said, adding that he’s considering removing tariffs on some imported Chinese goods to ease the pressure.

But Oanda’s senior market analyst Edward Moya believes that inflation in the US may have peaked.

“Inflation is expected to decelerate over the next few months, but it won’t be sharp given the rising prices on gas, hotel, airfares, and possibly a wide range of goods that will be impacted by China’s COVID lockdowns,” Moya said.

“But today’s inflation report proves that Fed Chair Powell made a mistake last week, when he removed the option of a 75-basis point rate hike at the next policy meeting,” he added.

In other markets, oil prices are surging again, by 5%, with the benchmark Brent now trading at US$107.40 a barrel. This came as Covid-19 cases in the Chinese cities of Shanghai and Beijing showed a drop on Tuesday.

Meanwhile, panic continues to sweep the crypto markets as major cryptos like Bitcoin, Ethereum, XRP all plunging overnight.

At 8.30am AEDT, Bitcoin shaved 7% from its price yesterday, and is trading at US$28,777.

5 ASX small caps to watch today

Rhythm Biosciences (ASX:RHY)
Rhythm has filed for an Australian Register of Therapeutic Goods (ARTG) listing for ColoSTAT. The ARTG filing is the final step required to secure market access in Australia, with launch expected later this year. ColoSTAT is a simple blood test developed by Rhythm for the detection of colorectal cancer, and is aimed at global mass market screening.

Atturra Limited (ASX:ATA)
Atturra updated its guidance, saying that FY22 revenue is now expected to be at the top, or slightly ahead, of the range of $127-$130m previously communicated to the market. Underlying FY22 EBIT is expected to be above $13.5m, up from the range of $11.7-$12.3m previously communicated.

Frontier Energy (ASX:FHE)
Preliminary results from Frontier’s Green Hydrogen Study have identified numerous existing water sources suitable for green hydrogen production near the company’s Bristol Springs Solar Project in WA. Frontier is now in discussions with key stakeholders from each of the above water sources regarding access for future green hydrogen production.

Civmec (ASX:CVL)
The construction and engineering services company had another solid quarter in Q3 FY22. The company delivered an 18.9% growth (on pcp) in sales revenues to $192.9m, and a 44.9% increase (on pcp) in NPAT to $12.14m.

Blue Star Helium (ASX:BNL)
Blue Star says it has been given the green light for Vecta’s final permit to drill a helium exploration well within the Serenity prospect located in Las Animas County, Colorado. Vecta’s planning for execution of the Sammons 315310C well is advanced, with drilling expected to begin as soon as practicable this quarter.