Wall Street a sea of red

The ASX looks on track for rocky session today, after all three major US stockmarket benchmarks fell sharply overnight following another rise in bond yields.

The S&P 500 was down by 1.84%, the Dow Jones by 1.51%, and tech heavy Nasdaq slumped by 2.6%.

The benchmark 10-year Treasury yield rose 4 basis points to 1.82%, its highest level in two years as traders begin to price in expected rate hikes by the Fed.

In December, the Fed’s dot plot showed central bank officials expected three hikes in 2022, but some analysts predict there could be as many as four (or more) rate hikes this year.

At this point, the yield curve suggests traders are pricing in a 0.50% hike in March.

The rise in yields hammered tech stocks overnight, with Amazon, Meta and Tesla all falling between 2-4%. Investment bank Goldman Sachs also fell 7% after its quarterly results missed expectations.

Meanwhile, oil prices jumped 1% and are close to their highest level since 2014. Brent crude is currently trading at US$87 a barrel, as energy traders await a monthly report by the International Energy Agency later today.

In cryptos, Bitcoin extended its losses once again, but has seen a spike over the past hour as traders bought the dip. BTC is now trading at US$42,100 at 8.30am AEDT.

The US government will be turning its attention to Bitcoin mining on Thursday morning (EST), with a Congress subcommittee preparing to discuss the activity’s environmental impact in the United States.

Read more about that here on Coinhead.

ASX 200 to open lower on Wednesday

The ASX 200 looks set to open lower this morning, with futures markets (January contracts) pointing down by 0.80% at 8:30am AEDT.

Yesterday, the local benchmark lacked direction and failed to maintain early momentum, finishing the day down by 0.11%.

Chipmaker Brainchip (ASX:BRN) was once again one of the biggest winners, up by 26% on no particular news.

Stockhead along with Luke Winchester at Merewether Capital have done a deep dive into Brainchip’s recent price action, which has surged 170% over the last 30 days. Read about that here.

On the IPO front, set to list today is NiCo Resources (ASX:NC1), a mineral explorer that raised $12m at 20c.

And later today, the Westpac/Melbourne Institute consumer sentiment index for January will be released.

5 ASX small caps to watch today

First Graphene (ASX:FGR)
The company has been awarded funding from Innovate UK EDGE to progress development work on its supercapacitor graphene hybrid materials. The £15,000 funding from Innovate UK will be matched with approximately $100,000 in-kind funding from First Graphene’s internal resources to advance the technology.

Helix Resources (ASX:HLX)
The company has reported another intersection of visible copper sulphide mineralisation at the Canbelego Main Zone, approximately 50 metres down dip from the high-grade intercept of 18 metres at 3.4% Cu intersected in May last year.

Westar Resources (ASX:WSR)
Westar announced the commencement of a ground fixed loop electromagnetic survey (FLEM) at its Gidgee North Project. The FLEM survey, which will be completed by late January, is the next step in establishing the veracity of the geophysical aanomalies already identified for Volcanogenic Massive Sulphide (VMS) deposits in at least six separate prospects.

Manhattan Corp (ASX:MHC)
Drilling rig and technical crew are about to mobilise to the site at MHC’s flagship Tibooburra Gold Project this week. Reverse Circulation (RC) drilling programme has been expanded from 5,000m to 10,000m, with multiple drills planned until May.

Strickland Metals (ASX:STK)
Further gold mineralisation has been intersected at at Dusk til Dawn at STK’s Yandal Project. Results include: 10 metres @ 3.1g/t Au from 314 metres, and 11m @ 2.0g/t Au (incl 5m @ 3.2 g/t Au) from 249m.