• The ASX is poised to open lower on Friday
  • Wall Street retreated overnight after economics data reinforced weakening economy
  • Oil and gold down sharply

Local shares are set to open lower on Friday. At 8am AEST, the ASX 200 September futures contract is pointing down by 0.60%.

Overnight, Wall Street retreated following a raft of economics data that reaffirmed a weakening US economy.

The equity selloff gathered momentum toward the end of the session and at the close, the S&P 500 was down 1.13%, the Dow Jones by -0.56% and Nasdaq by -1.43%.

Tech stocks led the decline with Microsoft, Apple and Amazon falling by around 2% each.

US retail sales were sluggish in August, up 0.3% vs survey of flat, as consumers failed to keep up with inflation.

US industrial production also fell 0.2% in August vs survey of +0.1%.

The Empire State index, which is a monthly survey of manufacturers in New York state, showed a massive fall of -31.3 points to -1.5 points in September.

But another rout like the one we saw on Tuesday was avoided after US railroad companies and unions reached a tentative deal to avoid a strike.

“This agreement saved the economy from further intensifying inflationary pressures, and avoided the US economy a daily economic hit of about $2 billion,” said OANDA analyst, Edward Moya.

Oil prices retreated by 4% with natgas down by 9% on concerns of faltering demand after the economic data releases.

The US Department of Energy also clarified that the restocking of the Strategic Petroleum Reserve (SPR) won’t happen due to prices falling at a certain level, and that they won’t take action until after FY23.

“Oil fundamentals are still mostly bearish as China’s demand outlook remains a big question mark, and as the inflation fighting Fed seems poised to weaken the US economy,” said Moya.

Gold got pummelled once again, and is now trading at US$1,663.50 an ounce.

“If Treasury yields keep going up that will keep the selling pressure on bullion,” Moya said.

US treasury yields rose once again overnight with the 2-year surging by 8bp, and the 10-year by 4bp – widening the curve inversion spread.

The 2-year vs 30-year spread is at the most inverted level in over 20 years, reinforcing the idea that we might indeed head into a recession.

Meanwhile, Bitcoin is down by 2% in the last 24 hours to change hands at US$19,808 at 8.30am AEST.

Looking ahead today, RBA Governor Philip Lowe will speak, while China will release its August retail sales and production data.

5 ASX small caps to watch today

Mamba Exploration (ASX:M24)
Reprocessing of regional radiometric data at the company’s Ashburton/Gascoyne Project in WA has identified several thorium anomalies, similar to anomalies found over Dreadnought Resources’ and Kingfisher Mining’s rare earth element (REE) discoveries. Evaluation of the REE potential of Mamba’s tenements is ongoing with field validation of the thorium anomalies planned for early October.

My Food Bag (ASX:MFB)
The company announced that overnight, it has received notice of resignation from the company’s CEO Kevin Bowler due to personal reasons. The board is commencing a search for Bowler’s replacement. In the meantime Mark Winter, chief financial officer, will act as the interim CEO of My Food Bag.

Anova Metals (ASX:AWV)
Anova has received the grant of an additional exploration tenement as part of its recently acquired Warriedar Gold Project. The new tenement adjoins the southeast extent of the existing tenure and increases the total Warriedar land package to over 90km. Anova also announced that Dr Amanda Buckingham has just been appointed to the role of managing director.

Antipa Minerals (ASX:AZY)
Newcrest (ASX:NCM) has exercised its right to maintain its 9.9% shareholding in Antipa via a top-up placement on the same terms as the recently announced placement. The top-up placement delivers an additional $1 million in new equity funds for Antipa, increasing the overall placement size to approximately $10 million. Proceeds will be used to accelerate the Pre-Feasibility Study activities at the Minyari Dome Gold Project (100% AZY).

Ardiden (ASX:ADV)
Robin Longley has resigned as CEO of  Ardiden. The board will undertake additional duties to support experienced exploration manager, Hayden Daxter, and CFO, Tara Robson, who will assume responsibility for the day-to-day operations of the company. A search for a new CEO is underway.

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