• US bank stocks were rattled on concerns of a contagion from SVB collapse
  • Bond yields tumbled, lifting rates sensitive shares like Tech
  • Gold continues its climb on flight to safety

 

It was a volatile session on Wall Street overnight as concerns around a contagion effect from the SVB collapse continued to grip markets.

By the close of day, the S&P 500 closed 0.15% lower, the Dow fell by 0.28%, and Nasdaq rose 0.45%.

ASX futures at 8am AEDT point to a massive drop for Aussie shares this morning, with the March futures trading 1.85% lower.

US stocks had a chaotic day with bank stocks crumbling as US banking regulators took actions to stem the fallout of Silicon Valley Bank’s failure.

The Federal Reserve, Treasury Department, and FDIC set up a backstop for depositors, and in a joint statement said:

“Depositors will have access to all of their money starting Monday, March 13.  No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

US bank stocks crumbled, but interest rate sensitive sectors like Tech rallied as Treasury yields tumbled.

The KBW Nasdaq Bank Index fell nearly 12%, with all major banks’s shares trading down.

Regional bank stock First Republic Bank fell over 60%. PacWest Bancorp, Zions Bancorporation and Western Alliance Bancorporation fell by 20%, 26% and 47% respectively.

Aussie government bond yield also tumbled overnight, with the benchmark 10-year down 17bp to 3.36%. The 2-year yield was down 27bp to 3.11%.

The chaos in the bond market is weighing on oil prices. Crude oil was smashed with WTI trading 2.6% lower to US$74.79 a barrel.

Traders meanwhile shifted their capital to the safe haven of gold, causing a 2.5% rally in spot gold to US$1,913.70.

Iron ore meanwhile was up 2%, and Bitcoin surged by 13% in the last 24 hours to US$24,184 – the biggest one day rise since the FTX collapse.

“It appears that the biggest one-day rise since the FTX turmoil is a sign that some investors believe that DeFi solutions support the case for holding cryptos,” said Oanda analyst, Edward Moya.

Major stablecoin USD Coin (USDC) – which had lost its dollar peg thanks to uncertainty around holdings it had with SVB – has also almost completely recovered after it said it would use other funds to maintain the peg.

The collapse of SVB has also sparked debate among traders on whether the Fed would pause its rate hikes, and tonight’s US inflation report could be the deciding factor.

 

5 ASX small caps to watch to watch today

Sezzle (ASX:SZL)
Sezzle announced its intent to list its shares of common stock for trading on the Nasdaq Global Market. It will retain its listing on the ASX. To satisfy the minimum US$4.00 bid price required by the initial listing requirements of the Nasdaq Global Market, the Board of Directors has approved, subject to stockholder approval, a reverse split of the company’s common stock.

Podium Minerals (ASX:POD)
Podium says it has achieved breakthroughs in mineral processing under certain atmospheric leach conditions, with world leading platinum recoveries of >90% achieved. Ongoing mineral processing test work has shown the ability to increase metal recovery through the optimisation of Podium’s atmospheric leach process. Material improvements have been achieved in the recoveries of platinum, iridium, nickel and cobalt associated with sulphide ore.

Lithium Energy (ASX:LEL)
A further lithium discovery has extended mineralisation at the Solaroz Lithium Brine Project. Assays from conductive brines sampled in the upper and lower aquifers have returned significant lithium concentrations of up to 397 and 395 mg/l respectively.

Optiscan Imaging (ASX:OIL)
Optiscan announced interim results of its oral imaging study conducted by Professor Farah and his team at the Australian Centre for Oral Oncology Research & Education. Diagnostic accuracy was extremely high at 88.9% for the presence of  dysplasia/carcinoma. Importantly, 100% of cancer cases were diagnosed correctly using Optiscan’s CLE device.

X2M Connect (ASX:X2M)
X2M says it has secured new contracts and extensions to existing contracts in South Korea. The Korea Water Resources Corporation Jeonju branch has extended its contract for remote water monitoring from 20,278 households to 25,564 households. This contract extension is worth approximately $575k. X2M has also received annual “follow on” Software as a Service (SaaS) and maintenance contracts from Dangjin, Gimje and Okcheon – totaling approximately $100k across 13,000 households.

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