Market highlights and 5 ASX small caps to watch on Thursday

The ASX will open slightly lower on Thursday
FOMC minutes revealed the Fed could reduce its rate hikes
German Dax lost 2% as vessel got stuck in the Rhine

Local shares are set to open lower today. At 8am AEST, the ASX 200 August futures contract is pointing down by 0.20%.

The S&P 500 and Dow Jones fell for the first time this week, down by around half a per cent, while the Nasdaq also slipped 1.25%.

The much awaited July FOMC meeting minutes were released, indicating that Fed members considered slowing down rate hikes going forward.

During a meeting in which the Fed approved a 0.75% rate hike, participants noted that 2.25%-2.50% range (current range) for the federal funds rate was around the “neutral” level that is neither supportive nor restrictive on activity.

“Rather than talking up the prospect of falling inflation allowing for slower tightening, the message remains hawkish,” said Oanda analyst, Craig Erlam.

“What’s more, policymakers are continually pushing back against the policy U-turn next year that markets have been flirting with the idea of.”

Meme stock Bed Bath & Beyond (NASDAQ:BBBY) jumped by another 11% last night, taking its price surge to over 500% in the last three months.

The stock is now trading at US$23, but before things got this absurd, most analysts had a Sell recommendation with a target price of just US$2.

In commodities, oil prices edged higher by 1% as Chinese Premier Li pushed for more pro-growth measures from local officials. The US and Iran are continuing talks around the nuclear deal which could be a big positive for oil supply, and therefore a negative for prices if it ever gets over the line.

Over the Atlantic, the German Dax lost 2% as 20 ships were stuck in traffic along Germany’s Rhine River after a 1,660-ton vessel’s engine failure closed part of the waterway. The UK’s inflation rate jumped to 10.1%, the highest in 40 years.

In cryptos, Bitcoin has fallen by 2.0% in the last 24 hours to trade at US$23,340.

BitMEX CEO Arthur Hayes wrote that Ethereum will rally after its transition in September, citing George Soros’s “theory of reflexivity”.

“If the merge is successful… traders will buy ETH today, knowing that the higher the price goes, the more the network will be used and the more deflationary it will become, driving the price higher, causing the network to be used more, and so on and so forth,” Hayes said.

Looking ahead today, Australia’s labour force data for July will be released, along with average weekly earnings data.

5 ASX small caps to watch today

Ai-Media Tech (ASX:AIM)
Ai-Media has signed a multi-year agreement with global tech giant Google to the value of up to US$5 million over the three-year term of the agreement. Ai-Media will become Google’s lead global provider of live captioning and translation services for internal meetings and events.

Data3 (ASX:DTL)
Data3 reported its FY22 results, with revenue increasing by 12.1% on pcp to $2.2 billion. NPAT was up 19.1% to $30.3 million, and total fully franked dividend was up 19.3% to 17.90 cents per share.

VRX Silica (ASX:VRX)
VRX announced maiden Mineral Resource Estimate (MRE) for its Boyatup Silica Sand Project in WA. Inferred Mineral Resource was 60 million tonnes @ 97.8% SiO2. Testwork has demonstrated that the Resource can be processed to high-quality glass-making sand.

Schrole Group (ASX:SCL)
Schrole says its software integration with Eteach is complete and in the market, providing Schrole customers with direct access to Eteach’s 2 million UK-based educators. Jobs advertised to the Eteach job board by Schrole’s customers will deliver additional revenue of approximately US$700 per advertisement.

Hot Chili (ASX:HCH)
Chile’s authorities have approved the company’s application for connection to the Maitencillo sub-electrical power station, located 17km from the centre of its Costa Fuego senior copper development in Chile. Connection to Maitencillo is a key step forward for the development of Costa Fuego, providing access to Chile’s national energy grid and its multiple renewable energy providers.