Market Highlights: Fed comments scare the market, and 5 ASX small caps to watch on Tuesday
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Aussie shares will open marginally lower this morning, and at 8am AEDT, the ASX 200 Jan futures contract was pointing down by 0.1%.
Overnight, the Dow Jones index swung to negative in late trading and closed the day 0.34% lower, while the Nasdaq finished 0.64% higher.
Investors began selling when two Federal Reserve officials said the central bank will have to raise rates above 5% to contain inflation (currently ay 4.25%).
“We are just going to have to hold our resolve,” said Raphael Bostic, president of the Atlanta Fed.
San Francisco’s Fed Mary Daly said: “Doing it (raising rates) in more gradual steps does give you the ability to respond to incoming information.”
Daly also emphasised that it was too early to “declare victory” over inflation.
US Treasury prices rallied (yields lower) after the comments.
The inflation report this Thursday could provide even more comfort for policymakers that not only are rate hikes working in easing price pressures, but potentially without a heavy economic cost.
“That’s exactly what they hoped for when they embarked on the tightening cycle last year, even if it seemed unlikely as inflation rose to extraordinary levels,” said OANDA analyst, Edward Moya.
Oil prices rose over 1% as China reopened borders.
At the same time, the US opted to delay its SPR (strategic petroleum reserves) purchases after indicating it didn’t receive any acceptable offers.
US coal prices has meanwhile plunged from record high as warm conditions in the northern hemisphere eased demand.
To cryptos where Bitcoin has surged in the last 24 hours by 1.25% to US$17,200.
A weaker dollar and a better risk environment are bringing cryptos some relief, with BTC breaking back above $17,000 to trade at its highest level in more than three weeks
“It will take a lot more than that to lift crypto considerably off its lows, but this is certainly a welcome start,” said Moya.
The construction company has won a major contract worth more than $330 million for the Rio Tinto Western Range Project at their Paraburdoo site in the Pilbara region of WA. The iron ore project includes Greenfields and Brownfields scope with the construction of a new Run of Mine (ROM) pad, primary crushing facility, overland conveying circuit and modifications to the Coarse Ore Stockpile (COS) and downstream conveying system.
AdAlta announced that a second Japanese patent relating to lead program, AD-214, has been granted by the Japanese Patent Office. The patent is for polypeptides containing the binding loops of the company’s lead i- body AD-214 that have variation in the i-body scaffold sequence. The patent coverage also extends to i-bodies that are related to AD-214 for treating CXCR4-related diseases or disorders.
Cann Group (ASX:CAN)
Peter Koetsier has been appointed to the role of CEO, and will commence on January 16. Koetsier will replace Peter Crock, who announced his resignation in October. Koetsier has more than 30 years of general management, marketing and commercial leadership roles within global pharmaceutical companies. He has most recently been Head of Asia Pacific for French biopharmaceutical company, Ipsen.
Aeris Resources (ASX:AIS)
Underground resource definition drilling has commenced at the Avoca Tank Project. The first drillhole intersected several high-grade copper lenses and a high-grade gold lens including: 10.7m @ 5.48% Cu, 0.30g/t Au and 9.7g/t Ag from 428m, and 2.6m @ 2.94% Cu, 1.66g/t Au and 68g/t Ag from 416m.
Rincon Resources (ASX:RCR)
Rincon has entered into an agreement to acquire 100% of six new granted exploration tenements in the heart of the Tier 1 Laverton Gold District. Tenements are strategically located adjacent to Rincon’s existing landholdings. As a result, the Laverton Project footprint will now expand from 49km2 to 81km2, an increase of 65%.