Market Highlights: ASX to kick off 2023 on a high note, and 5 small caps to watch on Tuesday

The ASX is poised to open higher on the first day of 2023
Wall Street had one of its worst years in 2022
IMF warns of a tougher year

Aussie shares are set to advance on the first trading day of the year. At 8am AEDT, the ASX 200 Jan futures contract was pointing up by 0.50%.

Wall Street was still on holidays yesterday but on Dec 31st, big tech led US stocks lower again to close out the worst year in more than a decade.

The S&P 500 limped to a 20% drop in 2022, while the Nasdaq lost over a third of its value.

In Europe, the Euro Stoxx 600 fell 12% during the year, but the ASX performed better, losing only 7%.

Experts believe the market in 2023 will hang on economic data and how companies plan to adapt to a potentially impending recession.

“The data towards the back end of 2022 wasn’t as promising as hoped, and the communication from the Fed and others has remained more hawkish than investors would like,” said OANDA analyst, Craig Erlam.

China’s move away from zero-Covid will also hold the key this year, and if the country can weather the storm over the next month or so, it could bode well for the rest of the year.

Meanwhile, IMF Managing Director Kristalina Georgieva has already warned of “a tough year, tougher than the year we leave behind.”

“We expect one-third of the world economy to be in recession,” Georgieva said.

“Why? Because the three big economies — US, EU, China — are all slowing down simultaneously.”

In commodities, European gas has fallen to the lowest level since the war in Ukraine, helped by weather forecasts showing warmer than average temperatures across Europe over the next two weeks,

Oil markets are bouncing back in another volatile session at the end of the year. The benchmark Brent crude jumped 3% on Friday to US$85.91 a barrel.

Gold was also pushing higher again on Friday but seems to lack the momentum to build on recent gains in any considerable way – closing at US$1,823.70 an ounce.

Bitcoin was up 0.8% in the last 24 hours to US$16,735.

“Who knows what’s to come in 2023 but at the very least, they’ll be hoping to put the FTX scandal behind them and focus once more on innovation and adoption,” said Erlam.

5 ASX small caps to watch today

Mach7 Tech (ASX:M7T)
Mach7 has received a sales order from new customer Akumin Inc, a NASDAQ listed outpatient radiology service provider. The Total Contract Value was ~$16.7 million, representing the largest customer contract in Mach7’s history.

Pointsbet Holdings (ASX:PBH)
Pointsbet has launched online sports betting operations in the State of Ohio, marking the company’s 14th online sports betting operation in the US. This follows successful launches in New Jersey, Iowa, Indiana, Illinois, Colorado, Michigan, West Virginia, Virginia, New York, Pennsylvania, Kansas, Louisiana and most recently Maryland.

Seven West Media (ASX:SWM)
Seven has reached an agreement with Cricket Australia to extend its media rights from the 2024-25 season to the 2030-31 season. The deal included an extensive digital package of rights in addition to the linear broadcast on the Seven Network. This will represent the first time SWM has held digital rights to cricket.

MGC Pharma (ASX:MXC)
The company has completed a strategic review of internal costs and decided on an immediate ~35% reduction in director fees. The key executive officer team (i.e. non-directors) have also agreed to a 10-20% reduction in their cash remuneration. Board changes include the resignation of non-executive director, Evan Hayes.

Argosy Minerals (ASX: AGY)
Argosy has provided an update of its Rincon Lithium Project in Argentina. 98% of the 2,000tpa operational development works is now complete, and has produced 1 tonne of battery-quality lithium carbonate (99.76% quality). A ramp-up phase is scheduled during current quarter, as the company advances toward steady-state production operations by end of Q2-CY2023.