Market Highlights: Meta's slide, Bank of Canada's pivot, and 5 ASX small caps to watch today

The ASX is poised to rise at the open on Thursday
Meta’s revenue fell for the second straight quarter
Bank of Canada increased its rate less than expected

Aussie shares are set to open higher again on Thursday. At 8am AEST, the ASX 200 Dec futures contract was pointing up by 0.40%.

Overnight, Wall St was mixed as tech heavy Nasdaq slumped by 2%. The S&P 500 finished lower by 0.7%, while the Dow was flat.

Tech shares had a rough day as Meta’s revenue fell for the second straight quarter to $US27.71 billion from $US29.01 billion. Meta shares fell 6% after the bell.

Earlier this week, Alphabet had a poor earnings report that emphasised a weakening client base, while Microsoft saw the worst first quarter revenue growth in five years.

Apple and Amazon will report their earnings after the market closes on Friday. The two companies beat earnings expectations in the last quarter.

The Bank of Canada (BoC) meanwhile increased its target for the overnight rate by 50bp, coming up short on expectations of 75bp.

The Bank noted that the global outlook is grim and that growth is close to zero, but its pivot has risen hopes that central banks around the world could shift to a lower gear on rate hikes.

OANDA analyst Edward Moya believes however that tighter financial conditions are not going away just yet.

“The Fed won’t have clear signals that they can downshift tightening until next year, which means the risks of overtightening are still on the table.”

In other markets,

– Iron ore fell 2% to US$87.80 a tonne
– Gold was up 0.7% to US$US$1,665.60 an ounce
– Brent crude rose 2% to US$95.68 a barrel
– Bitcoin rose 3% to US$20,737
– The AUD rose 1% to US64.93c

The Aussie dollar got whipped around last week, trading between US61c and US63c. But it has surged after the release of ABS CPI data yesterday, which showed that Australian inflation hit a 32-year high of 7.3%.

In oil, Brent has been on a good run recently as energy traders try to price in a China recovery.

“The next big move in oil might come from oil earnings later this week that will tell us if we are going to see any investments in new wells,” said Moya.

Bitcoin meanwhile is back above the US$20,000 level, as Wall Street grows optimistic that we are about to be done with rate hikes.

Under new laws announced in the Budget on Tuesday, profits on Bitcoin will be taxed as an asset not a currency. This means that capital gains will apply on sale (if profit is made) or when digital assets are traded against each other.

Looking ahead to today, the Australian export and import price index data is due to be released.

5 ASX small caps to watch today

Adore Beauty (ASX:ABY)
Online beauty retailer Adore says Q1 revenue has grown over the two most recent quarters to $45.4 million, albeit down 29% on the pcp. The company had strong growth in returning customers, up 85% on a 2-year basis and up 14% on pcp.

Delta Drone (ASX:DLT)
Revenue from continuing operations was $1.341m in Q3 , down 7% on pcp. However, annual recurring revenue, which makes up 40% of total revenue, was up 20% on pcp to $2.04m. Delta has a cash balance of $2.34 million at 30 September, excluding $1.03m relating to the sale of ParaZero.

Humm Group (ASX:HUM)
The BNPL play reported first quarter volume of $988.2m, up 29% on pcp. Consumer finance volume was $601.7m, up 8% on pcp. BNPL big ticket volume rose 8% with BNPL small ticket down 11%, a result of planned product closures.

iCetana (ASX:ICE)
icetana has received two new orders for its AI software solution from reseller Rasilient, for US state prison end-users, valued at US$56,250 in aggregate for five year licence terms. Following completion of four deployments in the past six months, ICE says these new orders represent an expansion request from a large and engaged end client.

Trek Metals (ASX:TKM)
Spodumene has been confirmed in multiple pegmatite dykes at the Tambourah Lithium Project in WA. Historic rock chip results highlight a large, fractionated LCT pegmatite swarm prospective for lithium. The Tambourah Project is under-explored for lithium and has never been drill tested.