Market highlights and 5 ASX small caps to watch on Tuesday

• The ASX is set to open higher this morning despite a fall on Wall Street
• Corporate earnings and economics data to dominate the week
• Bitcoin is edging towards below US$20k again

The ASX 200 July futures is pointing up by 0.30% at 8am AEST, despite Wall Street losing ground overnight.

US tech stocks tumbled with the Nasdaq closing 2.26% lower. The broad-based S&P 500 index also fell by 1%, while the Dow Jones was down 0.5%.

Twitter sank another 11% after its 5% fall on Friday as Elon Musk terminated his bid to buy out the rest of the company.

Investors are nervously awaiting the US inflation data which is due out on Wednesday (US time), as well as other significant data points such as factory output (Thursday) and retail sales (Friday).

These are expected to give insights into how much inflation has affected aspects of the economy, and will give the Fed critical input going into its board meeting on July 26.

“Central banks aren’t ready to take their foot off the brake yet, with the Fed pondering 50 or 75 basis points when it meets in a couple of weeks,” said Oanda market analyst, Craig Erlam.

Corporate earnings will also be on the agenda this week, with US banks like JP Morgan, Morgan Stanley and Citi Group to report later this week.

On the ASX, majors like Woodside Energy (ASX:WDS) and Whitehaven Coal (ASX:WHC) will also report their quarterlies this Thursday, while Rio (ASX:RIO) will report on Friday.

Meanwhile the US 10-year treasury yield has softened further, down by 11bp to just below 3%. The 2-year and 10-year yield spread has remained inverted (2-year yield higher than 10-year), which is regarded by many as the best leading indicator of a recession.

In other markets, oil prices were down by 1%, while iron ore prices fell 3% overnight.

“Recession fears are increasingly driving these markets, and that’s one reality that could limit the rise in oil prices over the medium term,” said Erlam.

Bitcoin is also feeling the pinch, and has traded back down to US$20,075 at 8.30am AEST.

“There remains plenty of focus on $20,000 but at this point, $18,500 and $17,500 are probably more important,” Erlam said.
 

5 ASX small caps to watch today

Little Green Pharma (ASX:LGP)
LGP has signed a two-year ~$2 million medicinal cannabis supply agreement with Ilios Santé in Germany. Ilios Santé will purchase minimum annual quantities of a high-THC white-label medicinal cannabis flower product being developed by LGP.

Rent.com.au (ASX:RNT)
The website made for renters has entered into a strategic partnership agreement with Origin Energy (ASX:ORG) to jointly develop services for Australia’s ~8 million renters. Under the deal, Origin will be appointed as the exclusive electricity and gas provider to Rent.com.au group, with customers expected to benefit from savings of up to $260 per annum.

RAS Technology (ASX:RTH)
RAS has announced an expanded five-year contract extension valued at $5m to become the provider of racing content to the Entain Group in Australia. Entain is the leading global sports betting and gaming entertainment operator, which operates Ladbrokes, Neds, Betstar and Bookmakers in the Australian market.

Evolution Energy Minerals (ASX:EV1)
EV1 says its thermal purification has achieved an exceptional, industry-leading purity level of 99.9995% C as a battery precursor. Thermally purified Chilalo graphite also exceeds the specifications required for nuclear-grade graphite, which sells for approximately US$30,000 per tonne. EV1 is currently undertaking a commercial verification program with an established US manufacturer of battery graphite products.

Corazon Mining (ASX:CZN)
Corazon announced the identification of a new target area for a potential porphyry copper deposit at the Mt Gilmore Project in NSW. Based on the positive results of this work, Corazon plans to undertake a new phase of targeted fieldwork at the Mt Gilmore Project.

At Stockhead we tell it like it is. While Evolution Energy Minerals and Corazon Mining are Stockhead advertisers, they did not sponsor this article.