Market highlights and 5 ASX small caps to watch on Thursday

The ASX will open higher today
Wall Street rallies on the back of strong earnings
Oil prices tumble after OPEC+ meeting

Local shares are set to open higher today. At 8am AEDT, the ASX 200 August futures is pointing up by 0.50%.

Overnight, US stocks rallied after a steady dose of impressive earnings and economic data. The S&P 500 gained 1.56%, the Dow by 1.29%, while tech-heavy Nasdaq surged by 2.59%.

Investors were impressed by earnings of some big names. Moderna rallied more than 15% and CVS Health gained 5% after reporting earnings beats.

Starbucks also rose 4.3% after also reporting solid financial results. EBay reported Q2 revenue that beat expectations as it offered investors an upbeat profit outlook.

Even the home of meme stocks Robinhood rose 11% as it announced the culling of a quarter of its staff as crypto dives.

“The economy doesn’t look bad at all after strong earnings from Moderna, Gilead Science, CVS, Electronic Arts, Starbucks, and SoFi,” said Oanda analyst, Edward Moya.

Fresh US economic data also offered some hope for the economy. The ISM services index surged to 56.7, much better than the consensus estimate of 53.5. US factory orders also impressed, another sign the economy keeps chugging along.

“The economic data broadly came in higher than expected as the service part of the economy seems to be stabilising and price pressures are improving,” said Moya.

Oil prices tumbled by almost 4% after OPEC+ members concluded their meeting overnight, agreeing to the smallest increase in OPEC+ history.

The cartel said they would increase production by 100,000 barrels a day in September, far less than the nearly 650,000 barrels a day that it agreed to add in July and August.

"A 100,000 barrel a day increase, shared pro rata among the OPEC+ members, would raise Saudi Arabia’s target by 26,000 barrels a day. That’s not even enough to full one Suezmax tanker a month"@JLeeEnergy @TheTerminal

— Jonathan Ferro (@FerroTV) August 3, 2022

“It looks like OPEC+ is resisting calls to boost output because the crude demand outlook continues to get slashed. The world is battling the ongoing global energy crisis and it won’t be getting any help from OPEC+,” commented Moya.

In other markets, iron ore was down almost 5% to $US108.10 a tonne, while Bitcoin was up 1% in the last 24 hours to trade at US$23,259.

Looking ahead today, the ABS will release Australia’s international trade accounts figures for June. The market is expecting solid surplus numbers here.

5 ASX small caps to watch today

Lykos Metals (ASX:LYK)
Gold-bearing “diatreme” breccia has been identified in the first trench in the Zekil-Erak Prospect at the Sinjakovo Project in Bosnia. Up to 5.78g/t gold has been returned from 15 outcrop samples from breccia collected to date.

Gale Pacific (ASX:GAP)
The screening and shading products specialist says H2 FY22 profit before tax is expected to be between $9.5 million and $10 million, compared to the $8.5 million achieved in H2 FY21.

Infinity Mining (ASX:IMI)
A drone magnetic survey was recently flown by Infinity at the Coppermine Project in the Central Goldfields, WA, revealing a 350m long magnetic high target beneath historical copper workings. Recent rock chip sampling at Coppermine returned up to 2.06 % Cu, 3791ppm Zn and 0.33ppm Au – coincident with the magnetic high target.

Metal Bank (ASX:MBK)
Initial results from the Kingsley Resource western extension drilling returns broad zones of Au mineralisation including: [email protected]/t Au from 44m, and 12m @1.62g/t Au from 48m.

Anson Resources (ASX:ASN)
Drilling of the Clastic Zones at the Paradox Lithium Project in Utah has returned Li grades up to 70% higher than those previously reported. Results include: 103ppm Li, 1,940ppm Br and 662ppm B in Clastic Zone 33 (4m thick), and 189ppm Li, 3,576ppm Br and 1,131ppm B in Clastic Zone 29 (18ft thick).