Market Highlights: Chipmaker Arm up 29pc, Bitcoin tops US$50k, and 5 ASX small caps to watch today

ASX to rise as Dow Jones hits fresh record
Chipmaker Arm rises by almost 30pc
Bitcoin has topped US$50k

The ASX is poised to rise on Monday after a mixed session in New York. At 8am AEDT, the ASX 200 index futures contract was pointing up by +0.2%.

Overnight, the S&P 500 fell by -0.01%, the blue chips Dow Jones index was up by +0.33%, hitting a fresh record, and the tech-heavy Nasdaq slipped by -0.3%.

An early morning release by the Federal Reserve Bank of New York showed that inflation expectations in the US have settled back to levels last seen before the coronavirus pandemic struck.

Amongst many things described in the report, the gasoline price in the US are expected to hit its lowest reading since December 2022.

“This is a significant change in the investment landscape, so we think it’s less important whether the Fed cuts three, four, or five times this year,” Mark Haefele at UBS Global Wealth Management told Bloomberg.

Traders are now focusing on the actual CPI report, due out on Tuesday (Wednesday AM AEDT).

Bitcoin has topped US$50k, and is trading now at US$50,250.

British semiconductor designer Arm jumped by a whopping 29% following its earnings report after the bell on Friday. Arm’s market cap has now eclipsed British icons such as HSBC and Unilever.

To stocks, Citigroup Inc was little changed despite being slapped with a series of demands from the Fed Reserve to change the way it measures risks.

Can Bitcoin keep rising this year?

Bitcoin topped the psychological US$50k level last night.

There’s been a Bitcoin rally in February as funds flow into US-based cryptocurrency exchange-traded funds (ETFs) after their approval in January.

“However, I believe the entire Bitcoin ETF investment thesis has not played out as expected,” said Rania Gule, a market analyst at XS.com.

“Bitcoin has dropped by approximately 10% since the trading of ETFs started on January 11. Could another major catalyst be coming this year, and is it possible for Bitcoin’s price to reach new historical levels?

“In my view, the disappointing part of the original Bitcoin ETF investment thesis is that the price did not rise in January.

“While the new Bitcoin ETFs seem to have early success, all new purchases by Wall Street investors did not lift the Bitcoin price.

“Investors seem to have shifted funds between investment products without a real change in their overall Bitcoin investment volume,” Gule said.

Gule added that the extent of Bitcoin’s rise for the rest of the year will depend significantly on the number of new investments in portfolios dedicated to cryptocurrencies.

“Assuming that 1% remains the general rule for most investors, reaching $100,000 may be harder than expected.

“However, if markets are willing to flip things and shift this allocation percentage to 5%, 10%, or even 20%, Bitcoin could reach historical levels, although I consider this possibility less likely.”

In other markets …

Gold price fell by -0.2% to US$2,019.68 an ounce.

Oil prices were flattish, with Brent now trading at US$82.09 a barrel.

The benchmark 10-year US Treasury yield was higher by half a basis point (bond prices lower) to 4.18%.

Iron ore futures was up +1% at US$128.10 a tonne.

The Aussie dollar climbed +0.1% to US65.31c.

Meanwhile, Bitcoin was up +4% in the last 24 hours to US$50,250.

5 ASX small caps to watch today

Arafura Rare Earths (ASX:ARU)
New Zealand Oil & Gas (ASX:NZO) has signed a conditional Gas Supply Agreement with Arafura Rare Earths for up to 4.8 Petajoules (PJ) of gas to be supplied for a period of up to five years from 2026. The deal is for three years, with a further two-year extension subject to gas reserves being available. The GSA is for firm gas supply with take-or-pay provisions and a price that escalates with inflation.

Neurotech International (ASX:NTI)
NTI announced Human Research Ethics Committee (HREC) approval to extend its Phase 1/2 clinical trial in autism spectrum disorder (ASD) by another 52 weeks in total. This additional 52-week HREC extension was based on requests from the company’s lead investigator, patients and their caregivers, to continue to extend the duration of treatment for these patients.

Mako Gold (ASX:MKG)
Detailed geological mapping and rock chip sampling has identified several new multi-kilometre manganese-rich zones on the Ouangolodougou Permit in Côte d’Ivoire. A pXRF analysis of 143 samples collected returned average manganese values of 14.7%, with values up to 25% Mn. The program confirms continuity of manganese mineralisation along significant entire strike lengths of all three zones, with widths up to 400m.

Invictus Energy (ASX:IVZ)
Following the two gas discoveries from the Upper and Lower Angwa reservoirs in recently completed Mukuyu-2/ST1 drilling campaign, the downhole gas samples acquired have completed export procedures, and are due to arrive in the US for analysis at the end of this week. Initial analysis is anticipated to be completed within the next two weeks following which the company will provide the results as soon as available.

Reckon (ASX:RKN)
For the full year of FY23, group revenue was $53.4m, up 4% on the pcp. Recurring revenue was up 4% on the pcp to $49.1m. NPAT was $4.9m, up 36% on pcp. Reckon has continued its H1 performance into the second half of the year, delivering to its plan.

At Stockhead we tell it like it is. While Arafura Rare Earths, Neurotech International and Mako Gold are Stockhead advertisers, they did not sponsor this article.