• The ASX could fall for the 4th consecutive day
  • Wall Street slipped overnight as talk of a recession became louder
  • More earnings reports on the ASX are due for release today.

 

Aussie shares could fall for the fourth straight day as shares in New York fell once again. At 8am AEDT, the ASX 200 March futures contract was pointing down by 0.10%.

Overnight, Wall Street sold off by around 0.3% as the FOMC minutes suggest that rates could keep going higher, and that a recession is a possibility.

According to the minutes, almost all Fed officials favoured a 25-basis-point rate hike during the Feb 1 meeting.

Only “a few” policymakers outright favoured a larger 50 bps increase, and all members thought inflation remained the one key factor for future rate outlook.

Some policymakers at the meeting also think there is an “elevated” risk of a recession in the US this year, the minutes said.

US bond yields rallied following the release, and the US dollar appreciated against major currencies.

Markets got a little reprieve however when St. Louis Fed president Jim Bullard stated that markets might be over-pricing a US recession risk.

Bullard said his projections for rates are to reach 5.375%, which implies 75 bps more in rate increases.

“Bullard is one of the more hawkish members, so if he thinks we only have a little ways to go here, the peak in rates might be properly priced in,” said Oanda analyst, Edward Moya.

In stock news, Palo Alto Networks popped 12.5% after the cybersecurity company lifted its earnings forecast.

Intel fell 2% after the struggling chipmaker slashed its dividend following an earnings miss.

Tesla rose 2% as its Tesla’s Model 3 reportedly sells for US$4,930 less than the average new vehicle sold in the US.

Crude oil prices slumped 3% as talks of a US recession lingers. Gold and iron prices were also sluggish, falling by around half a per cent each.

Bitcoin slipped 2% in the last 24 hours to US$23,826.

Experts think the crypto sentiment may have shifted as China appears to be softening its stance after Hong Kong’s financial regulator announced plans that could lead to an opening up of the cryptocurrency market.

Meanwhile, China’s top diplomat Wang Yi said China is willing to deepen ties with Russia, but continues to deny claims his country is supporting Russia with weapons.

“China is well aware that more sanctions could be coming their way,” said Moya.

Later today, we expect to hear from the RBA’s Bullock and Cagliarini.

ASX companies to report their earnings today include  Qantas, Airtasker, Medibank Private, and the Lottery Corp.

 

5 ASX small caps to watch today

Viva Leisure (ASX:VVA)
The fitness club network reported revenue for the half of $67.4 million, up 98% on the pcp. Adjusted EBITDA was $14m, up from a loss of $3.8 million in pcp and higher than any full year result in the company’s history. Bottom line NPAT was $4.2 million, up from a loss of $7.2 million in the pcp.

The Reject Shop (ASX:TRS)
Sales for the half rose 3.5% on pcp to $439.7m. Bottom line NPAT increased 14% to $16.4m. During the half, TRS said customers gravitated towards low-priced consumables that represent good value. Despite increasing its profits however, TRS said it continued to incur elevated international shipping costs as well as cost price increases due to higher input costs.

Clearview Wealth (ASX:CVW)
The wealth manager reported $16.3 million in underlying NPAT for the half, up 31% on the pcp. Life insurance was the main contributor, with the segment’s 46% increase in profits partially offset by the Wealth Management business. During the half, gross life insurance premium income increased 8% and new business increased 9%.

Musgrave Minerals (ASX:MGV)
RC drilling has identified a potential new high-grade lode around 50m north of Break of Day. A single RC drill hole testing a new target zone has intersected: 4m @ 8.2g/t Au from 50m. Musgrave says this has a potential strike of up to 100m, and is hosted within the high-titanium basalt, a known favourable stratigraphic host in the area.

Infinity Mining (ASX:IMI)
A five-year extension of term has been granted to explore Infinity’s Pilbara based Panaroma Project. Exploration is targeting quartz vein hosted gold, ultramafic intrusive related nickel-copper sulphides, conglomerate hosted gold and volcanogenic hosted massive sulphide (VHMS) deposits.

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