• The ASX will open flattish on Tuesday
  • Crude prices rise another 2pc overnight
  • The market awaits the Federal Budget later tonight

 

The ASX is poised to open modestly higher on Tuesday after a flat session on Wall Street overnight.

US traders were weighing on what the Fed might do after the release of the quarterly survey of senior loan officers.

The survey showed tighter bank lending standards and weaker demand for business and most consumer credit through Q1 versus prior quarter.

Another takeaway from the survey was that the commercial real estate space is going to feel more pain soon.

The focus for investors will now shift to the US CPI report on Wednesday (US time), and the uncertainty surrounding the debt ceiling.

To stock news, Wall Street was mainly muted but Occidental Petroleum shares dropped 2% after Warren Buffett said Berkshire Hathaway was “not going to buy control of Occidental”.

Cybersecurity company Zscaler surged 20% after boosting its revenue guidance for the quarter.

Data company Palantir Technologies rose 4.5% after saying that it expects to be profitable every quarter this year on the back of its new artificial intelligence products.

Tyson Foods plunged more than 16% as the company cut its annual sales outlook range.

 

Fed Budget Preview

Treasurer Jim Chalmers has forecast a modest surplus of about $4 billion in tonight’s Budget, from a forecast deficit of $37 billion for 2022-23 made just seven months ago.

“If it eventuates, this would be the first surplus in 15 years,” Chalmers said.

Highlights are expected to include (source: Fin Review) up to $3 billion power price relief for households, and tax deductions for small businesses to become more energy efficient.

Also on the table is $2.2bn to fund primary healthcare and reform of Medicare, and $14.1bn to fund a pay rise for aged care workers.

In Defence, $19bn will be earmarked for the Defence Strategic Review, offset by cuts elsewhere in the Defence budget.

Now read: This ASX company makes helmets that can stop machine-gun bullets. Here’s how it feels about the huge Australian Defence overhaul

 

In other markets …

Crude prices lifted another 2%, with WTI now trading at US$72.90 a barrel.

Some experts believe that oil prices are rallying because they have been extremely oversold.

“Oil prices will probably continue to stabilise as long as Wall Street is still confident the Fed will cut rates later this year,” said Oanda analyst, Edward Moya.

Gold traded higher by 0.2% to US$2,020.55.

Analysts say gold prices should remain elevated as there are too many recessionary risks on the table for gold to see a significant pullback.

Gold is also getting strong demand from China, as the country posted its sixth straight monthly increase with gold reserves.

Bitcoin meanwhile fell over 4% in the last 24 hours to US$27,597.

Binance had to pause Bitcoin withdrawals for a couple of hours as the number of unconfirmed transactions hit a record high.

Pepecoin has made a run above the $1-billion market capitalisation, as meme coins seem to be making a bit of a comeback.

The Twitter feed for Pepecoin calls it “the most memeable meme coin in existence.”

 

5 ASX small caps to watch today

Cyclopharm (ASX: CYC)
Cyclopharm says the FDA has notified the company that an inspection of the company’s Kingsgrove, New South Wales facility will be conducted between 24 July through 4 August. The inspection notification follows last month’s confirmation by the FDA of a six-month review period, ending 29 September, for Cyclopharm’s New Drug Application for its proprietary lung ventilation imaging agent, Technegas.

Brightstar Resources (ASX:BTR)
Final assays have been received from the 30-hole, 6,000m RC drilling program at Cork Tree Well. Results include: 10m @ 4.54g/t Au from 192m, and 2m @ 11.81g/t Au from 172m. Majority of the assays received are outside of the current 252,000oz JORC Resource, and have confirmed upside both along strike and at depth.

PharmAust (ASX:PAA)
Research on PAA’s lead drug monepantel has been published in the Wiley peer review journal. That research shows that monepantel has broad anti-cancer effects across multiple cancer types (melanoma, lung, breast, brain, colorectal, prostate, and ovarian). Monepantel’s ability to fight cancer is likely due to its effects on the cell cycle, autophagy and mTOR signalling.

Altech Batteries (ASX:ATC)
Altech announced that two prototypes of the 60KWh (ABS60) battery pack are currently being produced and fabricated at the Fraunhofer IKTS facility in Hermsdorf, Germany. Once completed, the battery packs will undergo cycling testing under extreme conditions, and they will be available for testing at customer premises. The design for the batteries was created for the renewable energy and grid storage markets.

Westgold Resources (ASX:WGX)
Bluebird mine production record in April of 48kt at 3.7g/t for 5.8koz confirmed that the company’s expansion plan is on track. Drilling continues to deliver high-grade results outside of mine footprint including: 11.94m at 7.32g/t Au from 195.04m, and 5.72m at 8.53g/t Au from 140.72m.

 

At Stockhead we tell it like it is. While PharmAust, Altech Batteries and Brightstar Resources are Stockhead advertisers, they did not sponsor this article.

 

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