• The ASX is set to open higher on Friday after a Wall Street rally overnight
  • FAANG stocks lifted, while Alibaba said it was considering an IPO and a spinoff
  • The US Fed is considering whether it should skip a meeting in June


Aussie shares are set to open modestly higher this morning after US stocks rallied overnight. At 8am AEST, the ASX 200 index was pointing up +0.1%.

Major indexes on Wall Street closed higher on hopes that the debt ceiling crisis would be resolved as early as this weekend.

President Joe Biden has already left for the G7 summit in Japan, but House Speaker Kevin McCarthy said his meeting with Biden on Wednesday has “set the the stage to carry on further conversations.”

Wall Street traders believe lawmakers will ultimately reach a deal, but Treasury will need to scramble to replenish its dwindling cash by issuing huge amounts of Treasury bills.

Bank of America said issuing large amounts of T-bills would have the same impact as a 25bp rate hike.


To stock news

The S&P 500 finished the day up by 0.94%, the Dow Jones by 0.34%, and tech-heavy Nasdaq by 0.34%.

Netflix surged 9% after saying its recently launched ad-supported tier had reached 5 million active users per month.

Walmart lifted 1% after reporting Q1 earnings and revenue that beat estimates, and upgrading its full year earnings per share forecast range.

Alibaba shares traded on the NYSE fell 5.5% after reporting mixed results for the quarter. Alibaba also announced that it will be exploring an IPO for its logistics and grocery arms, and a spinoff for its US$12 billion cloud business.

FAANG stocks Netflix, Apple, Alphabet, Meta, Microsoft, and Nvidia all finished higher to their highest levels in a year.

On the economic front, US weekly jobless claims came in lower than expected for the week – 242k claims vs 251k expected.


Skip, hold, or raise?

The Fed Reserve board is mulling over whether they should skip a meeting in June.

Economists believe that a multitude of data releases in coming weeks justify a skip, which would allow the board to take a step back and assess the incoming data.

The FOMC is due for a huddle on June 13-14, with traders already ramping up their wagers on the probability of a rate hike to about 40%.

Atlanta Fed President Raphael Bostic said that skipping a meeting in June wouldn’t necessarily mean the Fed was done raising rates.

“A pause could be a skip or it could be a hold,” Bostic said.

In little over a year, the Fed has raised its rates by 500 basis points (5%).


In other markets …

Crude prices fell -1% overnight, with WTI trading at US$72.02 a barrel.

Driving oil down was the weekly inventory data from the Energy Information Administration (EIA), which shows a slight build in crude oil stockpiles in the US.

Gold was also down -1% to US$1,958.21 an ounce.

The gold price was dragged down due to a stronger US dollar, improved sentiment on Wall Street, and investors not ruling out another Fed hike in June.

Bitcoin fell -1.6% in the last 24 hours to US$26,922.

Chartists say BTC is facing significant resistance level at $27,500, and the market is waiting for a decisive breakthrough or a potential retracement.


 5 ASX small caps to watch today

MTM Critical Metals (ASX:MTM)
MTM said a new laterite nickel mineralisation discovery was made at the Seahorse prospect. Aircore drilling has confirmed nickel-cobalt-chromite mineralisation over 1km
strike length. Highest grade was 2.2% Ni over 1m and numerous samples >1% Ni.

Noxopharm (ASX:NOX)
Noxopharm said that a new preclinical product candidate from its Sofra technology platform has shown effectiveness against inflammatory skin disease in preclinical models. The results conducted with Hudson Institute of Medical Research were presented at a prestigious international lupus conference.

Alchemy Resources (ASX:ALY)
Ground truthing of new gravity targets has discovered new pegmatite bodies with lepidolite and spodumene outcropping at surface. Rock-chip result has confirmed presence of surface lithium mineralisation with assay result of 2,723ppm Li20, 167ppm Cs, 2,930ppm Rb, and 62.8ppm Ta205.

Dart Mining (ASX:DTM)
Dart has determined that antimony and arsenic co-occur with gold mineralisation at the Phoenix Hill prospect, Rushworth, indicating similarities in the mineralisation style to several nearby significant gold mines. Peak assay values include 10.6g/t Au, 0.26% Sb, & 370ppm As.

Sierra Nevada Gold (ASX:SNX)
Sampling demonstrates high-grade nature of historically shallow mined gold veins across SNX’s Warrior Project in Nevada. Results include 74g/t Au returned from Discovery Shaft area (Warrior Mine) from sample W119. SNX says these results support the potential for a significant discovery at Warrior and a resumption of RC drilling is planned to start in July.


At Stockhead we tell it like it is. While MTM Critical Metals is a Stockhead advertiser, it did not sponsor this article.