• The ASX is set to fall for a third consecutive day
  • Tech stocks dragged Wall Street down overnight, as talks of a US recession continue to build up
  • Most commodity prices slip on demand concern

 

Local shares are set to fall for a third consecutive day. At 8am AEDT, the ASX 200 Dec futures contract was pointing down by 0.25%.

Overnight, tech stocks once again dragged Wall Street lower as talks of a recession continue to make investors nervous.

The Nasdaq was down 0.5%, while the S&P 500 and Dow Jones indexes were flattish.

Morgan Stanley has cut 1,600 people from its global workforce citing a looming US recession.

Citigroup CEO, Jane Fraser, said countries around the world will dip into a recession, with the US to follow in the the second half of 2023.

“Obviously, things are softening. But still, when you go to the States, compared to elsewhere in the world, it is good to be American,” Fraser said.

Goldman CEO David Solomon also painted a gloomy picture.

“There is more uncertainty right now on the economic trajectory for the next 12 to 24 months than we have seen in quite some time. Hope for the best but prepare for a bumpier environment,” Solomon said.

Over in Europe, stocks were mainly in the red despite gains in GDP and employment.

Eurostat says the EU’s GDP increased by 0.2% in the third quarter, while the number of employed persons in the EU also increased by 0.2%.

To commodities, the iron ore price slipped 2% after Brazilian mining giant Vale delivered a lower-than-expected production guidance for next year, and trimmed its longer term outlook.

Vale says it will stay below pre-2019 disaster levels for the near future, while shifting toward more higher-quality ore.

Crude prices declined around 2.5% as energy traders quickly abandoned bullish bets that we will see a price spike once the Russian cap on crude oil is put in place.

“It seems oil markets are only caring about a steady deterioration with the demand outlook,” says OANDA analyst Edward Moya.

Spot gold was up 1% to US$1,785 on softening US dollar. Meanwhile Bitcoin dropped 1% in the last 24 hours to trade at US$16,818.

Traders remain nervous about another crypto company going under.

“This is the wait-and-see part of crypto trading that has many opting for the sidelines,” said Moya.

Looking ahead to today’s session, Australian payroll jobs and wages data, along with international trade for October will be released.
 

5 ASX small caps to watch today

Fonterra (ASX:FSF)
The milk company has upgraded its earnings guidance to 50 – 70 cents per share from 45 – 60 cents per share. Fonterra also lowered and narrowed its forecast Farmgate Milk Price range of $8.50 – $10.00 per kgMS to $8.50 – $9.50 per kgMS, with a midpoint of $9.00.

Imagion Biosystems (ASX:IBX)
Imagion presented interim positive data from the company’s on-going Phase I study for its MagSense HER2 breast cancer imaging agent at the 2022 San Antonio Breast Cancer Symposium. The conference is a world leading forum for scientists. Imagion reported that its MagSense HER2 imaging agent has been well tolerated, and that there have been no safety issues related to the agent identified.

HALO Technologies (ASX:HAL)
HALO will launch Halo Property, a new research product focused on the Australian property investment market. Former ANZ chief economist Warren Hogan has been appointed to lead product development and sales. The product is on track for a Q4 FY22 launch, and offers subscription-based research with data provided under an agreement with CoreLogic Australia.

Lucapa Diamond (ASX:LOM)
Lucapa says 20 diamonds were recovered from initial processing of ~20% of Lulo kimberlite L164 bulk sample. Five diamonds greater than 1 carat were recovered, the largest weighing 1.95 carats. The average grade was around 2.5 cphm3, and the average stone size was 0.78 carats/ stone.

Power Minerals (ASX:PNN)
PNN announced the commencement of a Preliminary Economic Assessment (PEA) at the Rincon salar at the Salta Lithium-Brine Project in Argentina. The PEA will assess the production and life-of-mine profile, along with engineering and process costs, plus capital costs and operating costs for a potential high-quality lithium carbonate (LCE) producing operation at Rincon.

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