Market highlights and 5 ASX small caps to watch on Tuesday
Aussie shares are poised to open higher this morning, following a mixed trading day on Wall Street overnight.
The S&P 500 was up by 0.13% while the Nasdaq was down 0.43% as traders await the FOMC meeting later today (US time).
The meeting is expected to bring about a 75bp rate hike according to consensus forecast, although some have predicted a 100bp hike.
A handful of Mega Tech results announcements later this week also weigh on investors’ minds.
It's going to be a massive week for the markets.
July 26: FOMC Meeting, Microsoft & Google Earnings
July 27: Meta Earnings
July 28: US Q2 GDP Release, Apple Earnings
Volatility incoming. 🚨
— Miles Deutscher (@milesdeutscher) July 25, 2022
After Snap disappointed on Friday, Walmart on Monday lowered its profit outlook for Q2 and the full year. The giant retailer said surging inflation is forcing customers to reduce spending on discretionary items. Walmart’s share price closed 0.14% higher.
In other markets, global oil prices rose around 2% overnight, while the iron ore price was up 3% to US$106 a tonne. Bitcoin is currently trading at US$21,870, down 3% from 24 hours ago.
Meanwhile, tucked between this week’s FOMC meeting and earnings reports from US tech is the release of Australian Q2 inflation data on Wednesday.
The market has already priced in a headline YoY inflation of 6.2%, which would be the highest level since 2001 on the back of price rises in petrol, electricity, gas, food and new home construction costs.
Core inflation or the “trimmed mean” is expected to rise by 1.5%, taking the annual rate to 4.7%.
“A firmer Aussie CPI number on Wednesday, followed by a hawkish Fed on Thursday morning, would raise the chances that the RBA opts for a larger rate hike of 65 or 75bp when the board meets next Tuesday,” said Tony Sycamore, market analyst at City Index.
“Currently, the market is 77% priced for a 65bp interest rate hike at next week’s RBA Board meeting, which would take the cash rate to 2%.
“The interest rate market then expects another 140bp of rate hikes in 2022, taking the cash rate to 3.4% by year-end,” Sycamore added.
Ahead today, Australian consumer confidence and regional population data are scheduled to be released, according to Commsec.
Bigtincan Holdings (ASX:BTH)
The software company has signed a $3.3 million extension and expansion to an existing contract to June 2025 with global financial company, Fidelity Workplace Services. This contract is the single largest contract signed to date using the Brainshark technology, a company that was acquired by Bigtincan in September 2021.
The mining services company has delivered a record FY22 performance. The company added 15 quality rigs to end the year with 183 rigs, with a further 11 on order or under build. DDH produced strong safety performance with TRIFR decreasing 21.4% to 8.65 (vs FY21 of 11.01). TRIFR measures how frequently recordable injuries are occurring.
SILK Laser (ASX:SLK)
SILK has launched Australian-first day procedure centres in Tasmania. It is the first operator in the state – and the country – to meet regulations and be awarded a licence, launching as a day procedure centre in a retail setting. SILK is one of Australia’s largest specialist clinic networks, offering a range of non-surgical aesthetic products and services.
Fiji Kava (ASX:FIJ)
Fiji Kava has extended a strategic partnership with Network Nutrition, part of Dutch multinational IMCD. Network Nutrition was appointed as exclusive sales agent of Fiji Kava for the US ingredient market in October 2021, and sells Fiji Kava bulk ingredients under the Network Nutrition Kavaton brand.
Zenith Minerals (ASX:ZNC)
Zenith has reported positive initial sighter level metallurgical test work on lithium mineralisation from the Split Rocks project in WA. The purpose of the test work was to verify the lithium bearing mineral eucryptite. The results have now confirmed the amenability of eucryptite mineralisation, confirming the potential of eucryptite as a viable lithium target.