• The ASX is set to gain on Monday after Wall Street’s broad based rally
  • US markets rallied after a Fed report
  • Most commodity prices also increased on Friday

 

The ASX is set to extend its gains on Monday after a broad-brushed rally in New York. At 8am AEDT, the ASX 200 March futures contract was pointing up by 0.90%.

On Friday, US stocks staged a strong rally with the S&P 500 and Dow Jones surging by well over 1%, and tech heavy Nasdaq lifting almost 2%.

US stocks climbed as bond yields came down heavily (bond prices rise) following the Fed’s monetary policy report that said “high inflation is not becoming entrenched.” The report also said the Fed was strongly committed to returning inflation to its 2% objective.

This report will be submitted to US Congress as part of Jerome Powell’s testimony to Congress on March 7th, and his appearance before the House Financial Services Committee on March 8th.

“Wall Street has had a lot of Fed speak to digest over the past week, but it seems clear that traders believe we are very close to the rates peak despite all these signs of a resilient economy,” said Oanda analyst, Edward Moya.

The best performing US stock on Friday was AI-tech specialist C3.ai, which rose by 33% after the company posted Q3 revenue that beat analyst expectations.

Meta lifted 6% a after announcing it would slash prices of its Quest Pro virtual-reality headsets.

The US government has meanwhile opened up applications to companies for a share of the US$39bn funding earmarked by the US Chips and Science Act (CHIPS) to build an advanced chips manufacturing capability on shore.

The CHIPS Act was formalised alongside the $370bn subsidies for clean energy in the Inflation Reduction Act.

In other markets, crude prices surged 2% after the UAE refuted earlier speculation that they were considering leaving the OPEC.

Spot gold climbed 1% as traders put an end to the bond market selloff, and on optimism that China’s economy is about to roar.

Gold could have a make-or-break moment next week and see the recent rally evaporate if Fed Chair Powell sticks to a hawkish script, according to Moya.

Iron ore was down 0.7% as Brazil’s Vale SA announced that it will be turning 37 years worth of mining waste at an iron ore complex in the Amazon into high-quality material to be used in steel production.

Bitcoin was up 1% over the last 24 hours to US$22,421 after an 8% selloff last week.

Traders have been ditching Bitcoin after crypto bank Silvergate Capital questioned its own ability to survive, with Moody’s cutting the company’s credit rating from B3 to Ca.

Looking ahead to today’s session on the ASX, we expect to see release of the Melbourne Institute inflation for February at 11am AEDT.

 

5 ASX small caps to watch today

Cash Converters (ASX:CCV)
CCV announced an acquisition of its largest franchisee in the United Kingdom, Capital Cash for a total consideration of up to ₤13.9m (approximately $24.7m). Cash Converters is currently the Master Franchisor to 188 stores in the UK, of which Capital Cash is the largest group of stores, operating 42 franchise stores.

Nitro Software (ASX:NTO)
Nitro said the Alludo takeover offer of $2.15 has now lapsed, but the Potentia offer of $2.17 remains open for acceptance. The Nitro board has now recommended shareholders to accept the offer from Potentia.

Argenica Therapeutics (ASX:AGN)
Phase 1 interim safety report confirms single intravenous doses of ARG-007 at all doses administered are safe and well tolerated with no serious adverse events observed. The only adverse events observed during the trial were mild to moderate, and these were observed in both the ARG-007 treatment groups and placebo group, with a greater percentage seen in the placebo group.

Vection Technologies (ASX:VR1)
Vection has announced further product development in virtual environment creation for the real estate and property development sectors. The INTEGRATEDXRÒ product brings to the real estate market 3D modelling to 3D rendering, photorealistic animation to virtual reality (VR) to showcase unbuilt environments. The company will present a range of VR demos at Sydney Build 2023 today and tomorrow.

Antipa Minerals (ASX:AZY)
The Phase 2 greenfield drilling programme has delivered two new discoveries at Minyari North, and at the GEO-01 target within the 100% owned Minyari Dome Project. High-grade gold results were returned at the Minyari North prospect, and a significant gold and copper greenfield discovery was identified at GEO-01, increasing the prospective Minyari Dome strike extent to 4.4km.

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