Market Highlights and ASX Small Caps to watch on Thursday

ASX to open flat as US stocks extend gain

Wall Street extended its gains to third consecutive day overnight, buoyed by a surge in Alphabet (Google).

All three major benchmarks rose – the S&P 500 by 0.94%, the Dow Jones by 0.63%, and tech heavy Nasdaq by 0.50%.

That marked the best three-day rally since April 2020, but the latest round of company results reflected the ongoing volatility seen in markets to start the year.

Alphabet jumped 8% after announcing an eye popping fourth quarter, with digital ads, which accounts for 80% of its revenue, up by 33%. The company did not provide a guidance.

Meanwhile, Paypal lost a quarter of its market cap overnight after plunging 25%.

The payments company badly missed expectations after saying that new users in 2022 will only be a third those in 2021.

The news sent the entire fintech/retail sector reeling, with Shopify tumbling by 10% and Block Inc (Afterpay’s parent) by 6%.

Then after the closing bell, Meta ($FB) slumped by ~20% in after-market trade after its Q4 earnings announcement missed analyst expectations.

Over the Atlantic, the market is expecting a rate hike by the Bank of England later today, which will see UK rates increase from 0.25% to 0.5%.

To cryptos, where Bitcoin has lost 4% since yesterday, and is trading at US$37,170 at 8.30am AEDT.

As a backlash to the NFT craze intensifies, several Australian artists whose work will be highlighted in a groundbreaking new Sydney NFT exhibition are coming to their defence.

They want people to know the new medium has been “genuinely life-changing” and empowering for many creators.

Read the rest of that story here on Coinhead.

ASX 200 to open flat on Thursday

The ASX 200 index looks set to open flattish this morning, with futures markets (February contracts) showing a flat move at 8:30am AEDT.

Yesterday, local shares were up 1.17% as investors digested live comments from RBA’s governor Dr. Philip Lowe, who was speaking at the National Press Club.

Australia’s central bank boss hinted that earlier rate hikes are on the cards, consistent with a growth in wages that’s expected to hit 3% next year.

When asked by journos if a rate hike in 2022 is possible, Dr Lowe said it’s possible but unlikely.

All sectors except Utilities rose following the speech, with Energy and Mining leading the pack and rising by 2.7% and 1.6% respectively.

In large caps news this morning, Westpac (ASX:WBC) reported an increase in net profit to $1.82bn for the quarter, after slashing its expenses by 7%.

There’s a bit of economics data coming our way today, with the release of the December dwelling approvals and trade balance, as well as the January service and composite PMIs.

ASX small caps to watch today

Announcements were scarce on Thursday morning, with results for only seven companies reported on the ASX website as at 9am EST.

Serko Limited (ASX:SKO)
The tech company focusing on the travel sector says the rapid spread of Omicron and related restrictions has reduced business travel volumes in key markets, and is expected to negatively impact revenues for the full-year to 31 March 2022. In light of this, Serko is adjusting its guidance range for revenue for the full-year to 31 March 2022 to between NZ$18 million and NZ$20.5 million, from NZ$21 million and NZ$25 million.

Nufarm (ASX:NUF)
Revenues for Q1FY22 have increased 36 percent compared to Q1FY21, supported by favourable weather conditions particularly in Australia. The company says that while agricultural conditions and the outlook for soft commodity prices remain favourable, it expects earnings in FY22 will be heavily weighted to the first half.