Market Highlights: More rate hikes from central banks as Nasdaq surges 3pc

The ASX is poised to rise again on Friday
Central banks ECB and BoE hiked their rates overnight
Nasdaq rose by more than 3% ahead of Big Tech earnings

The ASX is on track to extend last week’s gains and at 8am AEDT, the ASX 200 Feb futures contract was pointing up by 0.15%.

Overnight, US stocks rallied once again after Fed Chair Powell’s dovish tone the previous day, with the Nasdaq climbing by another 3%.

So far in 2023, the Nasdaq index has bounced back by over 17% after falling by 32% in 2022.

Analysts say the main takeaway from Powell’s press conference yesterday was that, even with two more rate hikes left to go, the Fed is already approaching the end of the tightening cycle.

European stocks also rose overnight as the ECB hiked its rate by 50bp and signalled it could do it again in March.

ECB chief Lagarde reiterated the stance that she expects EU growth to stay weak, but should recover in coming quarters.

“The ECB is behind with rate hikes, so as they play catch up, risk appetite appears to be hanging in there,” said OANDA analyst, Edward Moya.

The Bank of England (BoE) also raised its rates by 50bp last night, with an accompanying statement saying that UK inflation has peaked.

“Global consumer price inflation remains high, although it is likely to have peaked across many advanced economies, including in the United Kingdom,” said the BoE.

FAANG stocks rose ahead of their earnings announcements, which should be in the next hour or so from the time of writing.

Big Tech stocks to report later today (after US hours) include: Alphabet, Apple, Amazon, and Qualcomm.

In other markets, crude prices fell 0.5% overnight with Brent trading at US$81.89 a barrel.

Spot gold price fell by 2% to US$1,911.75 as the US dollar rebounded, while spot iron ore also slipped by 2%.

Bitcoin traded flat at US$23,766.

January was a robust month for cryptos and the FOMC decision yesterday has helped keep all risky assets going higher.

“Bitcoin is riding this risk-on mood from Wall Street, but it might struggle to break above massive resistance from the $25,000 level,” said Moya.

Looking ahead to today’s session on the ASX, we expect to see Construction Index and Services PMI data in Australia.

5 ASX small caps to watch today

Janus Henderson (ASX:JHG)
For Q4 Janus reported a 5% increase vs Q3 in AUM (assets under management) to US$287 billion. Q4 operating income was US$67.8 million, compared to US$120.7 million in Q3. The board declared a quarterly dividend of US$0.39 per share. Overall the company returned US$358 million in capital through dividends and share buybacks in FY22.

Minerals 260 (ASX:MI6)
Second phase of drilling will commence at the Mynt copper-gold prospect in MI6’s Moora Project in WA. The 15,000m drill program is now more than halfway complete, with a large number of assays. The company observed significant sulphide mineralisation in several Reverse Circulation (RC) holes drilled at Mynt to follow up a drill intersection of 24m @ 1.9% Cu and 0.7g/t Au reported in Q1 22.

Peregrine (ASX:PGD)
Anomalous lithium, tantalum and niobium have been reported during a reconnaissance stream sediment sampling programme at Pilgangoora North. Up to 6,356ppm of niobium (Nb) were identified, up to 2,920ppm of tantalum (Ta) were identified, and up to 289ppm of lithium (Li) were identified.

Pivotal Metals (ASX:PVT)
Water discharge permit has been awarded to Tungsten San Finx SL, owner of the San Finx tin and tungsten mine. Operations at the San Finx tin and tungsten underground mine were halted by the previous owner in 2017. An application had been made for the controlled discharge of treated water from the mine. On 1 February, the Government of Galicia announced that the resolution authorising the water discharge permit had been issued.

Quantum Graphite (ASX:QGL)
Following successful completion of the test work program conducted at TU Freiberg by INEMET, QGL has now announced the completion of the design of the pilot thermal energy storage (TES) and power generation system (TES Generation System). The test work results provided the necessary data to finalise the design of the pilot TES cells.