Market Highlights: Fed's foggy interest rates path; and 'AI' mentioned over 1,000 times in earnings calls

Shares to open flat after the Fed bumped rates another 25bp
Google, Microsoft and Meta reported earnings
The word AI was mentioned over 1,000 times in the earnings reports

Local shares are set to open flat on Thursday after a mixed session on Wall Street following the Fed’s decision.

Overnight, the blue chips Dow Jones index extended its winning streak to 13 straight days, rising by 0.23%. The S&P 500 ended flat, and tech heavy Nasdaq fell -0.12%.

Earlier, the Fed Reserve lifted rates by 25bp to a range of 5.25-5.50%, the highest level in 22 years.

While the market had fully anticipated the decision, chair Powell gave nothing away regarding future decisions.

Instead, he repeatedly reiterated the data dependency of the Fed’s next few meetings, simply noting that the FOMC is prepared to tighten policy further, if appropriate.

“While the market was very confident that the Fed would raise policy rates today, future policy decisions are considerably less certain,” said Seema Shah, chief global strategist at Principal Asset Management.

Treasury yields dropped after the announcement, suggesting that traders expect the Fed to stop hiking rates, at least for the rest of the year.

To stock news, Google parent Alphabet climbed 6% to a 15-month high as quarterly revenue beat expectations.

Microsoft fell -4%, the most since January, on softening sales growth.

Meta rose 1.5% after beating expectations, while Boeing surged 9% after generating $2.58 billion in free cash flow in Q2 amid solid jet deliveries.

AI losing its meaning

Big Tech stocks have been red hot this year as investors scramble to get in on the ground floor of artificial intelligence (AI).

Microsoft’s and Google’s earnings reports show that investors will continue to give tech companies a long leash to invest in AI, even as some analysts question whether the AI-fuelled stock boom is a bubble waiting to burst.

Analysts now believe the word AI is going to be mentioned by companies so many times, that it will lose all meaning.

In S&P 500 earnings calls last quarter, the word AI was mentioned over 1,000 times.

Alphabet, Microsoft, and Meta together said the abbreviation at least 200 times.

In other markets …

Gold rose +0.4% to US$1972.64 an ounce.

Haywood Securities has maintained its bullish stance on gold, projecting gold prices of US$2,025 and US$2,200 respectively for this year and the next.

Crude prices slumped by around -0.9%, with WTI now trading at US$78.93 a barrel.

Iron ore (62% Fe) was trading modestly higher by 0.15% to $US112.89/ a tonne.

World’s biggest iron ore producer Rio Tinto (ASX:RIO) has cut its interim dividend by a third as profits fell 43% in the first half amid a slump in iron ore prices.

Now read: Rio Tinto cuts interim dividend by a third as profit falls 43% to … US$5 billion

Bitcoin meanwhile was up +0.8% higher in the last 24 hours to US$29,471.

5 ASX small caps to watch today

Veris (ASX:VRS)
The spatial data services provider said unaudited FY23 revenue was $100.9m, up 9.2% on pcp. Bottom line profit before tax was $1.1m. The company says it remains well positioned in key markets and has a strong outlook. Veris’ secured forward workload is now in excess of $55 million to be executed over the next 12 months.

Orcoda (ASX:ODA)
The SaaS company announce that its subsidiary has signed a SaaS supply contract with Comlink Australia, a community services provider along the coastal region in South East Queensland for more than 30 years. Commlink is one of the largest and most experienced providers of community transport, with a substantial vehicle fleet. The SaaS contract has an initial term of two years, and forecasted revenue for the initial term of the contract is circa $400k.

Benz Mining Corp (ASX:BNZ)
Benz announced new high-grade discoveries on the Suzanna and Michel prospects, including a new copper-gold discovery at Michel. Results include: 4.85m at 7.50g/t Au and 1.91% Cu from 76.65m (EM22-272), and 3.40m at 9.32g/t Au from 264.10m at Suzanna (EM22-260).

Mineral Commodities (ASX:MRC)
MRC announced the appointment of Scott Lowe as new CEO effective from 1 September. Lowe is a senior mining executive with extensive experience in the industry spanning more than 35 years in a wide range of commodities and countries. His current role is managing director with Firefinch (ASX:FFX) until 31 August, and in recent years worked with South32 in Australia and as CEO of ArcelorMittal’s West African mining business in Liberia.

EMvision Medical Devices (ASX:EMV)
EMV said that all three clinical trial sites are live, with enrolment now open at Princess Alexandra Hospital, Brisbane. Enrolment milestone has been reached under project agreement with the Australian Stroke Alliance to trigger a further $600,000 non-dilutive milestone payment.