Market Highlights: Fed speak in focus and 5 ASX small caps to watch on Friday

The ASX should open slightly lower on Friday
Wall Street has risen ahead of Fed Chief J Powell’s speech this eve (US time)
US GDP not as bad as forecast

Local shares are set to open lower today.

At 8am AEST, the ASX 200 September futures contract is pointing down very slightly by 0.05%.

Overnight, major stock market indices rose between 1% to 1.7% ahead of Fed Governor Jerome’s speech in Wyoming later today (US time).

The US GDP contracted less than forecast in the June quarter, down by 0.6% vs 0.7%, but that makes for a third consecutive quarterly decline.

Previously, most US economists refused to accept the economy was in a recession, but this latest data has rekindled fresh debate.

Initial US jobless claims for the week were also released overnight, falling by 2,000 to 243,000 claims, a miss on the expected 252,000.

“Given how strong the labor market remains, wage pressures will not be easing anytime soon and that should keep inflation being very sticky,” said OANDA analyst, Edward Moya.

Another chewy piece of data last night – the US Core PCE (personal consumption expenditures), which is steady at 4.4%.

The core PCE index measures the prices paid by consumers for goods and services minus the messy influence of volatile food and energy prices.

“The PCE data should support the Fed to remain aggressive with tightening going forward,” Moya says.

In company news, chipmaker Nvdia rose 4% after forecasting a sharp drop in third quarter sales. Many analysts believe the guidance signals that a bottom for the share price has been found.

Oil prices – did someone say volatile – initially rose but later fell by around 2%, with Brent crude trading at US$99.75 a barrel. This comes amid rumours that OPEC+ is again considering production cuts, as well as the possible return of Iranian oil exports.

“A new nuclear deal would free Iran’s oil industry from US sanctions, potentially increasing the amount of crude oil that the country is able to export,” said OilPrice analyst, Julianne Geiger.

At 8am AEST, Bitcoin is trading at US$21,587, having risen by 0.35% in the last 24 hours.

Ben “BitBoy” Armstrong, founder of BitBoy Crypto – the second-biggest crypto-focused YouTube account with more than 1.44 million subscribers (Coin Bureau has 2.09m) – is dropping a defamation suit he’d officially filed against content creator Erling Mengshoel Jr., aka Atozy.

Read the rest of that story here by Stockhead’s own Rob Badman.

Ahead today, companies expected to release earnings results include Wesfarmers, Next DC, Jumbo Interactive, and Ramsay.

5 ASX small caps to watch today

Etherstack (ASX:ESK)
Etherstack’s UK subsidiary, Etherstack Wireless, has entered into a contract with Nokia Solutions and Networks Australia. The deal will see Etherstack supplying professional services and a pilot license for the deployment of Etherstack’s MCX LMR-IWF product. The contract revenue of approximately $755k is expected to be recognised this FY22.

Jumbo Interactive (ASX:JIN)
The digital lottery company says that revenue was up 25% for the year to $104.3 million. Underlying EBITDA was up 13% to $55.1 million, and the company has declared a fully franked final dividend of 20.5 cents per share, taking the total FY22 dividend to 42.5 cents per share. Looking ahead to FY23, Jumbo expects underlying costs to increase, impacting its EBITDA margins.

Selfwealth (ASX:SWF)
The trading platform says revenue in FY22 increased by 10% to $20.3m. Active traders increased by 32% to 125,944. The company reported a loss of $6.3m in FY22 vs a loss of $0.6m in FY21. Looking ahead to FY23, Selfwealth will complete an 18-month transformation program, and the company will continue to “have a laser focus on the ROI on all investments to ensure continued progress on the pathway back to profitability.”

Betmakers Technology (ASX:BET)
The wagering tech company reported a 371% increase in revenue in FY22 to $97.1m compared to FY21. Bottom line adjusted EBITDA was $2.2m, a $3m decline from FY21. Looking ahead to FY23, BET says it will work with partners to expand fixed odds betting on horse racing in the US beyond New Jersey and into other states.

Westgold Resources (ASX:WGX)
Westgold had a strong finish to the year with record Q4 production of 72,597 ounces. The company delivered record full year gold production of 270,884 oz ( vs 2021: 245,411oz). This record production delivered higher revenue of $647.6 million (2021: $571.2 million), but the company’s bottom line NPAT loss was $111.1 million ( vs 2021: profit of $76.8 million). Looking ahead into FY23, Westgold says its production will come in the range of 240,000 – 260,000 Oz.