Market Highlights: ASX to surge on Big Tech rally; and 5 small caps to watch on Monday

The ASX will open higher following a Wall Street rally on Friday
Big tech stocks in the US surged after Google’s latest layoff announcement
Australian CPI due out this week

Aussie shares are set to rise on Monday after a Big Tech rally on Wall Street. At 8am AEDT, the ASX 200 Feb futures contract was pointing up by 0.50%.

On Friday, Nasdaq surged by 2.7% as big tech stocks like Amazon, Netfix and Alphabet climbed as high as 6%.

Investors seem to have responded to news that Google would cut its jobs by 12,000 – viewing it as a positive move that could steady profit margins.

Over the last few weeks, US big tech stocks have collectively announced layoffs in the order of 50k jobs.

Apple remains the only Big Tech company that hasn’t announced layoffs, with analysts suggesting that the company’s hiring policy was more conservative during the pandemic.

Goldman Sachs meanwhile dipped 2.5% after news the Fed Reserve was investigating whether the bank’s consumer banking division had enough safeguards for making personal loans. Goldman has already announced plans to stop personal lending.

Elon Musk appeared in court and took the witness stand over his tweet in 2018 that plaintiffs deemed misleading and fraudulent.

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

Musk argued that his tweets are not always all-powerful.

“Just because I tweet about something doesn’t mean people believe it or will act accordingly,” he told the court.

In other news, the FDA rejected Eli Lilly’s attempt for quick approval of an Alzheimer’s drug. The NYSE-listed company fell 1.5% after the decision.

This week will be a crucial one for Wall Street as earnings reports from key companies are due for release.

Companies to report this week include Tesla, IBM, Microsoft, Boeing, Intel and Visa.

Crude prices had a good week as Chinese reopening optimism spearheaded the bullish move higher. It seems energy traders are betting the global oil demand will continue to grow even as recession risks rise.

Gold’s bullish rally has run out of steam after reaching a nine-month high, wth the yellow metal finishing Friday at US$1,913.08 an ounce.

Bitcoin tumbled by 3% in the last 24 hours to US$22,411.

“The bond market is not in agreement with Fed speak, so if we see more tightening beyond the March meeting, risky assets broadly, including crypto, could be vulnerable to major selling pressure,” said OANDA analyst, Edward Moya.

Looking ahead to this week, the Australian quarterly CPI report is due for release on Wednesday.

The ASX will close on Thursday for Australia Day, while most Asian financial markets, including China, are also closed for the week-long Lunar New Year public holiday.

In the US, key reports to be released include GDP on Thursday.

5 ASX small caps to watch today

Duratec (ASX:DUR)
The industrial contractor has secured a $100m wharf and harbour basin upgrade project with the Department of Defence. The project award follows a successful competitive tender process, with work to commence in May 2023, and an expected completion date of March 2025.

Buxton Resources (ASX:BUX)
Buxton’s 100% owned Graphite Bull project in WA showed breakthrough metallurgical results, with concentrate grades of up to 98.1% TGC achieved by conventional flotation processing. Importantly, conventional flotation recoveries of well over 85% into 95% TGC concentrate have now been demonstrated. Buxton says ground electromagnetic (EM) survey has also been completed.

Sezzle (ASX:SZL)
The BNPL company reported total Income (aka revenue) for December increasing by 15.7% YoY and 1.7% MoM to US$13.6m. For Q4, Net Income was US$0.5m compared to a Net Loss of US$25.9M in the pcp. For the second month in a row, Sezzle achieved positive Net Income and Adjusted EBTDA.

Los Cerros (ASX:LCL)
Ongoing detailed geological review of the Quinchia Project in Colombia has revealed an area of interest at the Ceibal porphyry target not previously tested. The find has sparked an immediate low-cost field program to better understand the opportunity.

Osteopore (ASX:OSX)
Osteopore has entered into a binding asset purchase deed to acquire multiple medical distribution businesses that are currently responsible for approximately 40%-45% of Osteopore’s total sales globally. The acquisition is expected to transition Osteopore towards a vertically integrated business, controlling the entire process from manufacturing and marketing, through to direct retail sales.