Market Highlights and 5 ASX Small Caps to watch on Thursday

The ASX is set to open much lower following a plunge in US stocks overnight
UK, Canada at highest inflation levels in decades
Aussie unemployment rate ahead

ASX set to plunge on Wall Street rout

Aussie shares are set to much lower this morning following a rout on Wall Street overnight.

At 8am AEDT, the ASX 200 June futures is pointing sharply down by 1.80%.

Overnight, Wall Street plunged to its biggest drop since 2020, as fears of rising inflation triggered a selloff in sectors like retail and tech.

At the close, the S&P 500 was down 4.3%, the Dow Jones index by 3.75, and tech heavy Nasdaq fell by 4.7%.

Eurozone shares -1.4%
US shares -4%, Nas -4.7% on earnings concerns with Target and Cisco downgrading outlook on costs and disruptions
US 10 yr yld -10bp to 2.88%
Oil -2.5% to $109.6
Gold +0.1% to $1816.6
Iron ore -1.3% to $129.9
ASX futures -1.8%$A 0.6951 with $US index +0.4%

— Shane Oliver (@ShaneOliverAMP) May 18, 2022

Strong CPI prints in the UK and Canada weighed heavily on equities selloff, as worried investors envision a more hawkish Fed rate path.

In Britain, the inflation rate surged to a 40-year high of 9%, while in Canada, it accelerated to a three-decade high of 6.8%.

Shares in retailers like Target (down 25% overnight) and Walmart (down 7%) took the full brunt of investors’ anxiety, with Target warning that its margin could be further hit by rising costs.

Tesla was dumped by the S&P ESG index, which cited concerns around the company’s working conditions and its poor handling of a probe into deaths linked to its driver-assistance systems.

Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!

ESG is a scam. It has been weaponized by phony social justice warriors.

— Elon Musk (@elonmusk) May 18, 2022

The yield on the benchmark 10-year US Treasury dipped below 2.9% after topping 3% on Wednesday, as investors sought haven from equities.

In other markets, oil prices fell by 3% while Bitcoin dropped 4.5% to trade at US$29,040 at 8.30am AEDT.

Ahead today, the ABS will release the crucial unemployment rate data. The last reading in March shows a rate of 4%, and the consensus is for it to drop to 3.9% today.

5 ASX small caps to watch today

Flexiroam (ASX:FRX)
The IT company achieved a number of important milestones in FY22, including a 40% bump in revenue to $3.69 million. Gross profit was up 250% to $1.48m, as the company executes on its strategic plan to sign highly scalable IoT connectivity solutions across multiple verticals.

Titomic (ASX:TTT)
Titomic says it’s ready to deliver the world’s first automated cold spray glass mould coatings system. The company has successfully completed Factory Acceptance Testing prior to its first shipment and installation. Revenue of $1.7 million is expected over a three-year period for every comparable machine sold.

Discovery Alaska (ASX:DAF)
Comprehensive data review identified widespread presence of lithium mineralisation within historical Coal Creek drill core in Alaska. Re-analysis work of drill core is currently in progress, with 12 drill-holes selected as initial priority for lithium assessment works.

Ronin Resources (ASX:RON)
Ronin has received formal confirmation from the Colombian National Mining Agency that the transfer of the FI3-152 Mining Contract to Ronin’s wholy owned Colombian subsidiary Cooperativo Minero de Norte de Santander SAS has been approved. Ronin will now finalise the registration of the FI3-152 Mining Contract in the coming months.

Openn Negotiation (ASX:OPN)
The real estate tech company has started a pilot program designed to prepare Openn’s platform and technology for commercial roll-out in bridgeMLS and the Northern California, Bay Area Market. Openn is now running five concurrent pilots across Canada and the US.