Market highlights and 5 ASX small caps to watch on Wednesday

The ASX will open lower on Wednesday
Market jitters as Pelosi lands in Taiwan
US and European energy stocks got a boost after huge profit by BP

Local shares are set to open lower today. At 8am AEDT, the ASX 200 August futures is pointing down by 0.20%.

Overnight, Wall Street was weaker across the board as House Speaker Nancy Pelosi touched down in Taiwan.

The S&P 500 fell by 0.7%, the Dow by 1.2% and tech heavy Nasdaq by 0.2%.

US and European energy stocks got a boost as British giant BP reported its highest profit in 14 years of $US8.5 billion for the second quarter. Days earlier, US oil companies ExxonMobil and Chevron also reported a triple increase in profits for Q2.

Oil prices were steady overnight as all eyes now turn to the OPEC+ (including Russia) production meeting later tonight. According to Reuters, two of eight sources said a modest output hike would be discussed. The rest said a boost was unlikely.

Shares in Uber rose by almost 20% overnight after it reported better-than-expected revenue in Q2 of $8.1 billion, doubling the previous quarter. The company however still posted a net loss of US$2.6 billion for the quarter.

In other markets, yield on US 10-year notes leapt 18bp to 2.75%, while the Aussie dollar slipped to 69.23c from a 70c handle.

Bitcoin is down by 0.75% in the last 24 hours to trade at US$23,100 this morning.

Later today, Australian retail sales data for June will be released, along with new vehicles sales for July.

ASX investors are still digesting yesterday’s 50bp hike by the RBA, and the aftermath statements by governor Philip Lowe.

The hike took the cash rate to 1.85% but according to AMP Capital economist Shane Oliver, it won’t go to 3%.

“We see the cash rate peaking around 2.6% which is at the low end of market and economists’ expectations,” Oliver said.

“Market and consensus expectations for rates to rise above 3% are too hawkish for these reasons: global supply pressures on inflation appear to be easing, the RBA is already getting traction in terms of slowing demand.

“Inflation expectations are still contained, and many households will experience significant financial stress with rising rates,” he concluded.

5 ASX small caps to watch today

Chimeric Therapeutics (ASX:CHM)
Chimeric has received a patent in Japan covering certain applications of chimeric antigen receptor (CAR) technology using chlorotoxin (CLTX), including Chimeric’s clinical-stage CAR T asset CHM 1101 and preclinical-stage CAR NK asset CHM 1301. Japan is the third largest pharmaceutical market in the world.

Invictus Energy (ASX:IVZ)
Invictus has been awarded three carbon offset projects for 30-year term, covering a combined 301,565ha of indigenous forests in Zimbabwe. Profits from sales of carbon credits will be shared with the Forestry Commission of Zimbabwe and local community to fund protection of forests.

Galileo Mining (ASX:GAL)
Further eight RC drill holes from the second RC program at the Callisto palladium discovery have returned significant palladium-platinum-gold-copper-nickel assays. Results include: 27 metres @ 1.44g/t 3E, and 29 metres @ 1.41g/t 3E.

Aguia Resources (ASX:AGR)
Aguia says it has lodged supplementary information regarding the grant of the Installation Licence (LI) for its Três Estradas Phosphate Project with the Rio Grande do Sul State Environmental Agency of Brazil. The LI is the only major outstanding permit required to commence project construction, and once received, earthworks, civil works and installation of the processing unit can begin.

Celsius Resources (ASX:CLA)
Celsius has received further shallow and high-grade copper assay results from the ongoing drilling program at its flagship MCB copper-gold project. Results include: an intersection of 93m @ 0.59% copper and 0.05g/t gold from 18m.

At Stockhead we tell it like it is. While Invictus Energy is a Stockhead advertiser, it did not sponsor this article.