Market Highlights: Big tech stocks continue to be belted, and 5 ASX small caps to watch today

ASX to bounce back despite losses in New York
The rotation away from tech stocks continue
Bill Ackman’s IPO is not going well as planned

The ASX200 index is expected to regain some of yesterday’s losses when the market opens on Friday. At 8am AEST, the ASX200 futures contract was pointing up by 0.4%.

Overnight, the Nasdaq continued its descent after a 3% crash on Wednesday, down by a further 0.93% The S&P 500 finished the day 0.51% lower, while the blue chips Dow Jones index rose by 0.2%

The big tech stocks that have driven the recent market boom have mostly lagged behind smaller stocks, which saw a nearly 10% rise in July.

“We’re in the midst of a great, rate-led rotation from tech to everything else,” Callie Cox at Ritholtz Wealth Management’s told Bloomberg.

Meta Platforms fell 1.7% as it faces its first fine from the European Union for allegedly misusing its market power by linking Facebook Marketplace to its social network.

American Airlines rose by over 4% lowered its earnings forecast due to past errors that the airline says will continue to impact its revenue and profits throughout the rest of 2024.

Harley-Davidson surged by 7.5% after reporting higher-than-expected revenue for Q2, thanks to increased shipments and stronger sales of its more expensive motorcycles in North America. The company also announced a US$1 billion plan to buy back its own shares.

And, Lululemon plunged by over 9% after analysts expressed new concerns about the company’s ability to meet its guidance, citing ongoing problems with its products and a slowdown in demand for activewear.

Earlier in the day, stocks rallied after the GDP report shows the US economy grew faster in the last quarter, with the GDP increasing by 2.8% from April to June, beating economists’ forecasts and improving significantly from the 1.4% growth in Q1.

Ackman’s IPO not going well as planned

Bill Ackman has reduced his ambitious US$25 billion target for the IPO of his new investment fund, and is now aiming for just US$10 billion.

This move comes after a letter to investors revealed that demand for shares isn’t as high as Ackman had hoped.

The letter, which Ackman did not expect to be made public, lists some major investors, like Texas Teachers, which is investing at least $60 million.

“In short, this is a moment when you can be very helpful to Pershing Square by participating in the PSUS offering and giving your order to the banks, the sooner the better,” Ackman pleaded in his letter.

“An order today will enable us to improve the strength of tomorrow’s initial message to the market on deal size.

“Orders that come later are of course still very helpful as the book will build and we create momentum over the weekend into Monday.”

Ackman is hoping to leverage his growing online following, which supports his controversial views and statements, to boost his IPO’s success.

This strategy mirrors how Elon Musk’s fans have supported Tesla and how meme-stock investors have backed GameStop.

Ackman’s other fund, listed in Amsterdam, has seen significant gains since he began engaging with his online audience, adding over US$500 million to his personal wealth.

In other markets …

Gold price slipped by 1.5% to US$2,362.70 an ounce.

Oil prices rose by 0.9%, with Brent crude now trading at US$82.37 a barrel.

The benchmark 10-year US Treasury yield fell by 4 basis points (bond prices higher) to 4.25%.

The Aussie dollar traded flat at US65.40 cents.

The iron ore price tumbled by 1% to US$99.90 a tonne.

Bitcoin meanwhile was down up by 0.5% in the last 24 hours to US$65,775, while Ethereum slid by almost 5% to US$3,173.

5 ASX small caps to watch today

Red Hawk Mining (ASX:RHK)
Red Hawk announced the completion of a geological re-evaluation and resource estimation for the Eagle deposit at its 100%-owned Blacksmith Iron Ore Project. This updated assessment has revealed an additional Direct Shipping Ore (DSO) mineralization, including canga, Dales Gorge Member, CID, and other detrital materials, totalling 71.1 million tonnes with an iron content of 57.4% Fe. As a result, the total DSO Mineral Resource estimate for the Blacksmith Project has been increased to 243 million tonnes at 59.3% Fe, incorporating data from the Champion, Blackjack, Delta, Paragon, and Eagle deposits.

Nova Minerals (ASX:NVA)
Nova has successfully completed its NASDAQ public offering, raising about US$3.3 million. The offering included 475,000 units, each with one American Depositary Share (ADS) and one warrant, priced at US$6.92 per unit. Each warrant can be exercised for one ADS at US$7.266, valid for five years. The ADSs and warrants began trading on NASDAQ on July 24, 2024, under the symbols “NVA” and “NVAWW.” The funds will be used for exploration, feasibility studies, and working capital.

PVW Resources (ASX:PVW)
PVW Resources is acquiring a major portfolio of ionic clay REE projects in Brazil, covering 952 km². This positions PVW in a key REE region with promising exploration potential. Due diligence has confirmed REE presence at key sites. Luis Azevedo and Celeste Queiroz will join the PVW team to help develop this new venture.

Chilwa Minerals (ASX:CHW)
Chilwa has received new high-grade mineral sands assay results from 40 drillholes at the Mposa project, part of a 17,000-meter drilling program. Significant findings include multiple intervals with grades up to 62.4% Total Heavy Minerals (THM). These results are aimed at improving the confidence level of the current Mineral Resource Estimate, which is already high. The drilling continues to reveal high-grade zones, with more assay results expected soon.

Horizon Minerals (ASX:HRZ)
Horizon has received an independent JORC (2012) Ore Reserve report for its Boorara project, confirming its financial viability. The open-pit mine is set to produce 1.24 million tonnes of ore at a grade of 1.24g/t Au, yielding 49.5koz of gold over about 14 months. With a binding Ore Sale Agreement ensuring 45.8koz recovered at a 92.5% recovery rate, the project is expected to generate $19.9 million in free cash flow at a gold price of A$3,300/oz. All necessary permits are in place, mining and haulage contracts are nearly finalized, and a development decision is expected soon, with mining potentially starting in September.