• The ASX will open lower on Thursday after a softer US CPI
  • US inflation rose by 4.9% in April, softening from the 5% in March
  • Icahn Enterprises sank 15% after NY regulators requested data following Hindenburg claim


The ASX is poised to open lower on Thursday as a report last night showed that US inflation is slowing down. At 8am AEST, the May ASX 200 futures contract was pointing down by 0.4%.

Overnight, US indices were mixed after the CPI report – with the S&P 500 climbing by 0.24%, the Dow slipping by -0.22%, and tech-heavy Nasdaq down by -0.63%.

Consumer prices in the US rose again in April by 4.9% from a year ago, but it was lower than the 5% recorded in March.

It’s now the 10th consecutive month inflation rate has declined in the US, but housing costs were still the largest contributor.

Policy-sensitive 2-year Treasury yields fell to 3.91% after the release, while futures showed that traders are pricing in roughly 75bp of rate cuts by the Fed this year.

New York Fed Reserve President John Williams however said it was too soon to say whether the central bank is done raising interest rates.

“We haven’t said we are done raising rates. If additional policy firming is appropriate, we’ll do that,” he said.

President Biden meanwhile met with House Speaker Kevin McCarthy and other congressional leaders to discuss the debt ceiling issue, but the conversation yielded little progress, with both sides agreeing to meet again on Friday.

To stock news, Airbnb plunged 11% after the company forecasted lower revenues in the next quarter despite a record last quarter.

Icahn Enterprises sank 15% after announcing that New York authorities requested information from the company. This follows the scathing report from Hindenburg that accused Icahn of creating a “Ponzi-like” structure.

AI stock Upstart Holding surged 35% after reporting an upbeat guidance for Q2.


China ramps up gold buying

Gold was down 0.2% to US$2,029.61 an ounce.

China is expanding its gold reserves in its effort to abandon the US dollar. Total gold stockpiles in China reached 2,076 tonnes after adding 120 tons in the five months through March.

“Historically, China has been a major buyer of US Treasuries, but this has seen a marked cooling off as Beijing swaps them out in favour of gold,” said Nigel Green of deVere Group.

Meanwhile, crude prices fell around 1.35%, with WTI now trading at US$72.71 a barrel.

Recent data from Global Energy Monitor shows that Africa and the Middle East are home to 49% of all oil transmission pipelines under construction globally.

“The crude expansion in Africa and the Middle East is pumped as a panacea to the chaos of global energy demand, which is driven in large part by Europe’s scramble for oil and gas outside of Russia,” said Baird Langenbrunner of Global Oil Infrastructure Tracker.

“But the approach might entrench these regions to costly infrastructure that will in time need phasing out, saddling them with stranded assets.”

To cryptos where Bitcoin has dropped 0.4% in the last 24 hours to US$27,527.

Solana has now cracked the top 10 again where it used to frequently reside in the bull market of 2021, with a market cap of around US$8.2bn.


5 ASX small caps to watch today

Ecofibre (ASX:EOF)
Ecofibre has received patent grant notifications for two of the five patent applications it filed in October 2022 in the US, and is now awaiting formal grant notification on a third patent application. Patents granted include the treatment for ovarian cancer and endometriosis. The third patent is for Ecofibre’s proprietary system and method for producing hemp extracts.

Civmec (ASX:CVL)
The heavy engineering company reported a nine-month FY23 revenue of $606.6 million, an increase of 4.2% on pcp. EBITDA was $80.4 million, a 21.4% increase on pcp. The company says it has a strong order book at 31 March of around $1.2 billion.

Essential Metals (ASX:ESS)
ESS says lithium-focused exploration and feasibility study activities are ramping up as the company re-engages with potential off-take and funding partners. Work has commenced on the Feasibility Study at the Pioneer Dome Lithium Project in WA. Re-engagement has also commenced with the parties who had shown interest in participating in the spodumene concentrate off-take, and funding for the project development.

GreenTech Metals (ASX:GRE)
Drilling at Yannery has confirmed more high-grade copper. Significant intercepts include 21m @ 2.1% Cu from 22m. Yannery adds potential for further expansion of the current Whundo project mineral resource of 6.18mt @ 1.12% Cu and 1.04% Zn (JORC 2012, Indicated and Inferred).

Marmota (ASX:MEU)
Marmota announced that diamond drilling at Aurora Tank has re-commenced. The drilling was abandoned in April 2022 when the first driller in the diamond program, Geodrill, brought to site a rig that was not fit for its intended purpose and had ongoing breakdown. CEO Dr Colin Rose says drilling at Aurora Tank was designed as a production-focused program primarily to provide sufficient core/bulk samples to enable the metallurgical testing work that is required to advance Aurora Tank into production.