ASX to fall as inflation panic sets in on Wall Street

Aussie shares are set to open lower this morning, with the ASX 200 April futures pointing down by 0.58% at 8am AEDT.

The rotation out of growth stocks continued to play out on Wall Street overnight as inflation concerns mount.

Survey of US consumer inflation expectations rose by a record 6.6% in March, up from 6% in February – ahead of the official inflation data later today (US time).

The tech heavy Nasdaq fell heavily by more than 2% as rate sensitive stocks fell in a broad based selloff. Chipmaker and market darling Nvidia dropped 5% following a broker downgrade.

Both the S&P 500 and the Dow indexes also fell by more than 1%, ahead of the key inflation data which will determine the speed of Fed rate hikes.

In the past week, the equity market has largely been dictated by movements in the bond markets .

The 10-year US yield is currently at a 6-year high of 2.77%, while the Aussie 10-year bond yield is also at its highest level since 2015 at 3.02%.

In commodities, oil prices sank to their lowest level since February as China’s lockdowns have sparked fears that oil demand could be substantially reduced.

Brent crude is now trading at US$99/barrel even as the war in the Ukraine continues to cause giant leaps in cooking oil and food prices.

Meanwhile, Bitcoin’s correlation with the Nasdaq remains in lockstep, with the crypto plunging by 7% to US$39,764 at 8.30am AEDT.

Bitcoin has now dropped below a key technical mark alongside Nasdaq’s recent losses.

5 ASX small caps to watch today

Genmin (ASX:GEN)
African iron ore explorer Genmin has signed an MoU for the supply of renewable hydroelectricity from Poubara for its 100% owned Baniaka iron ore project. The project is located in the Republic of Gabon, central West Africa. The term is for up to 20 years, and will be priced at less than US¢10 per kilowatt hour.

Southern Cross Electrical Engineering (ASX:SXE)
SXE has received contract awards worth around $50m in the iron ore sector in the Pilbara. The contracts include works for BHP Iron Ore Pty Ltd in the Pilbara and Port Hedland.

Vection Technologies (ASX:VR1)
VR1 has increased its Total Contract Value (TCV) by around 30% to ~$14 million for FY22 as of 31 March. The company has also confirmed its FY22 revenue guidance of $17 to $19 million (compared to FY21 audited revenue of ~$3.5 million).

Anax Metals (ASX:ANX)
Diamond drilling has intersected massive copper (Cu) and zinc (Zn) sulphide mineralisation. This was discovered over true widths up to 15 m at the Evelyn Deposit. Feasibility studies are also advancing with key work streams in progress.

AD1 Holdings (ASX:AD1)
The recruitment tech platform says that subsidiary Art of Mentoring (AoM) saw a strong finish to the quarter. AoM achieved a 38% increase in revenue over the previous quarter, with March 2021 seeing a 400% increase over March 2021.

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