Market Highlights: Big Tech earnings in focus, Bitcoin rockets to US$34k, and 5 ASX small caps to watch

ASX to open higher, tracking Wall Street
Alphabet and Microsoft reported their quarterly results
Bitcoin surged to over US$34k

Aussie shares are poised to rise at the open, tracking movements on Wall Street overnight. At 8am AEST, the ASX 200 index futures was pointing up by +0.4%.

In New York, the S&P 500 rose by +0.73%, the blue chips Dow Jones index was up by +0.62%, and the tech-heavy Nasdaq climbed by +0.93%.

Iron ore stocks will be on watch today after BHP and Rio Tinto shares listed on NYSE surged 3% each as iron ore futures rallied.

To earnings, Alphabet’s stock price fell -6.5% after the bell as its Q3 cloud division results missed estimates. At a group level however, Alphabet beat analysts’ expectations on revenue and earnings per share.

Microsoft rose 4% in extended trading after its Q1 net income jumped 27%. In contrast to Alphabet, Microsoft’s Azure cloud revenue growth accelerated after two years of deceleration.

“If big tech companies blow their numbers out of the water and provide strong guidance for future earnings, then we could see the stock market rally strongly through the end of the year,” David Trainer told Bloomberg.

Oil stocks meanwhile will come under pressure today as crude prices eased another 2% overnight. And after a volatile session on Monday, US bond yields eased slightly.

Back home, the market nervously awaits the key CPI data to be released by the ABS at 11.30am AEDT today.

Go for defensive stocks

The US economy’s resilience may have caught many by surprise, but the probability of a recession remains high, according to ClearBridge Investments chief investment officer, Scott Glasser.

Glasser therefore believes this is a good time to look to defensives, especially those stocks which have been consolidating following a period of ‘mania’, like AI and pharmaceutical companies.

“From a defensive perspective, where I see opportunities are some of the pharmaceutical companies and some of the beverage companies in the marketplace, where the fundamentals are still really good,” Glasser told clients in a webinar.

“Market expectations for medical device and life science companies in the healthcare sector have come in markedly, and we like the non-cyclical nature and modest valuation of pharmaceutical companies overall.”

Regarding interest rates, Glasser also says the Fed is probably done for now as inflation looks to be stabilising.

In other markets …

Oil prices eased further by more than 2%, with Brent now trading at US$88.05 a barrel. This comes in response to diplomatic efforts to contain the escalation of the Israel-Hamas war.

Gold price also eased, down 0.1% to trade at US$1,970.97 an ounce.

Iron ore futures dipped -0.2% to US$118.19 a tonne.

Base metals prices were mixed, with 3-month nickel futures plunging by -2.3%, and copper futures rising by +0.3%.

The Aussie dollar jumped higher by 0.3% to US63.58.

Meanwhile, Bitcoin has surged by 8% in the last 24 hours to US$34,075.

“I think that these rapid rises in Bitcoin are somewhat exaggerated,” Samer Hasn of XS.com told CNN.

“Regulatory and legislative concerns are still clouding this market, and I don’t see opportunities soon to dispel these concerns as the legal battles continue.”

5 ASX small caps to watch today

Auric Mining (ASX:AWJ)
The joint venture between Auric and BML Ventures has distributed surplus cash to the partners. The payment to Auric of $2.2 million (inc. GST) is the maiden disbursement of surplus cash for Stage One of the project. 1,361 ounces of gold were sold at The Perth Mint on Friday, 20 October for $3,130 an ounce, realising $4.26 million in the latest round of gold sales. Gross Revenue now exceeds $20 million for Stage One. Further surplus cash payments to the partners will follow throughout November.

Invictus Energy (ASX:IVZ)
Strong gas shows (up to 157 times above background), fluorescence and elevated LWD resistivity have been encountered in multiple Upper Angwa reservoirs. Similar strong gas shows (up to 151 times above background), fluorescence and elevated LWD resistivity were also encountered in multiple Lower Angwa reservoirs – potentially opening up a substantial new play in the Cabora Bassa basin.

Yandal Resources (ASX:YRL)
Assay results have been received from the 13-hole (1,771m) reverse circulation (RC) program testing the Oblique and New England Granite prospects at the Ironstone Well -Barwidgee Gold Project. A total strike length of 1,100m remains open in all directions. Notable intercepts include: 24m @ 0.7g/t Au From 26m, and 12m @ 1.1g/t Au From 84m.

Belararox (ASX:BRX)
Soil sampling results from Belararox’s Bullabulling Project have highlighted strong lithium anomalies up to 324ppm Li. Two of the largest coherent lithium soil anomalies (>80ppm Li) can each be traced over 500m within a highly prospective > 3km long structural corridor with anomalous Li values. The lithium soil anomalies are associated with elevated caesium (Cs) and tantalum (Ta) confirming LCT pegmatite type targets within mafic metamorphic rocks adjacent to the Bali Monzogranite.

Pursuit Minerals (ASX:PUR)
Pursuit reported Maiden Inferred Resource of 251.3kt LCE at 351mg/Li at the Rio Grande Sur Lithium Project in Argentina. The Inferred Resource is based only on recent geophysical surveys and historical drilling representing a small portion of the known mineralisation. Maiden diamond drilling programme is expected to commence this quarter, focused on upgrading the inferred resource.

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