Market Highlights and 5 ASX Small Caps to watch on Tuesday

ASX to rise as Wall Street rallies
US Fed Chair Jerome Powell sworn in
Aussie dollar retakes US71c

ASX to rise as Wall Street springs back to life

Aussie shares are set to open higher today after a rebound on Wall Street overnight.

At 8am AEDT, the ASX 200 index is pointing up by 0.26%.

All three major US stock market indices rose – the S&P500 was up by 1.86%, the Dow by 1.98%, and tech heavy Nasdaq by 1.59%.

The financial sector paced the rally after JP Morgan said its net interest income for the year will be US$56bn, up from the US$50bn forecast in January. JPM’s stock price rose 6%.

Major US tech stocks also rose with Microsoft and Apple leading, up by around 3-4%.

In Fed news, Chairman Jerome Powell was formally sworn in on Monday to begin his second four-year term as head of the US central bank.

Atlanta’s Fed Reserve President Raphael Bostic said the Fed could pause rate hikes in September if it already hikes by 50bp in the next two meetings.

“I have got a baseline view where for me I think a pause in September might make sense,” Bostic told reporters last night.

“After we get through the summer and we think about where we are in terms of policy, I think a lot of it will depend on the on-the-ground dynamics that we are starting to see. My motto is observe and adapt.”

European Central Bank Christine Lagarde has also signalled a possible July rate hike for the EU bloc.

In a blog, she wrote: “This would allow us a rate lift-off at our meeting in July, in line with our forward guidance. Based on the current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter.”

Meanwhile, the Aussie dollar has retaken the US71c handle, and at 8.30am AEDT, was trading at US71.5c.

Bitcoin remains volatile, and is currently trading at US$29,250, down 3% from yesterday.

“Bitcoin prices remain weak despite a broad risk rally on Wall Street. It looks like most crypto traders are hesitant to buy the dip, which most likely means that the bottom has not been made,” said Oanda’s senior market analyst, Edward Moya.

The overall crypto market was jittery after Lagarde noted in her blog that Bitcoin and other cryptocurrencies were “worth nothing”.

5 ASX small caps to watch today

Turners Automotive (ASX:TRA)
Turners has delivered record earnings for the full year FY22. Highlights include revenue of $342.0m, up 15% on previous year. NPAT was $31.3m, up 16% on previous year. Looking ahead, Turners has updated its three-year rolling target to cross over $50m of profit before tax by FY25.

Lykos Metals (ASX:LYK)
Drilling commences at the RDK copper-cobalt prospect, within the Sinjakovo Project in Bosnia-Herzegovina. An initial 19-hole, 4,600m diamond drilling program will follow up samples of up to 5.21% copper and 965g/t cobalt from historic rock dumps, and to continue geological investigation of the project area.

Gentrack Group (ASX:GTK)
The software company reported revenue of $57.1m for the half, up 12% on pcp. However statutory NPAT was a loss of ($5.8m), versus a loss of ($1.1m) in the pcp. Gentrack says the loss was mainly due to an increase in investments into R&D and people capabilities.

Alvo Minerals (ASX:ALV)
Maiden RC drilling program is scheduled to commence drilling in coming days, initially targeting extensions to known high-grade VMS and supergene mineralisation at C3, as part of a broader 4,000m program at the Palma Project in Brazil.

Technology One (ASX:TNE)
The software company reported record first half profit, with NPAT of $33.2m, up 18% on pcp. Its SaaS recurring revenue was $225.1m, up 44% on pcp.