• The ASX is poised to fall on Wednesday
  • Overnight, Wall Street closed higher in a volatile session
  • Netflix surged 14% as subscriber growth topped expectations 

Local shares are set to fall on Wednesday. At 8am AEST, the ASX 200 October futures contract was pointing down by 0.40%.

Volatile trading in New York saw all three major indexes (S&P 500, Dow Jones and Nasdaq) rebound from what many believe to be oversold levels as they closed higher by 1% each.

The US market swung from gains to losses back to gains again as earnings reports came out, most of which have raised optimism that the economy isn’t as bad as it seems.

Netflix surged almost 14% after hours as its subscriber growth topped expectations in Q3.

The company added 2.41 million net new subscribers in the quarter, beating the forecast of 1 million as it expects another 4.5 million subscribers in the December quarter.

Another round of bank earnings saw Goldman Sachs also delivering better than expected quarterly results.

Shares in Goldman rose 2.3% after the bank reported Q3 net income of $3.1bn, down from $5.4bn a year earlier but above estimates of $2.9bn.

Lockheed Martin’s shares rose the most in 2 years, up by 9% last night, after delivering EPS for the quarter of US$6.87, beating the average estimate of US$6.72.

Overall it’s been a strong start to the week in equities, boosted by the UK’s decision to ditch most of last month’s tax cut measures.

However many believe the Fed still pulls the strings.

“This is an impressive bear-market rally that will likely get faded as the Fed is nowhere near ready to downshift their tightening pace,” said OANDA analyst Edward Moya.

In other markets:

– Iron ore rose 1% to US$94.80 a tonne
– Gold was flat at US$US$1,651.80 an ounce
– Brent crude fell 1% at US$90.63 a barrel
– Bitcoin fell 0.8% to US$19,316
– AUD climbs back to a 63 handle, trading at US63.11c

Oil is falling as the US prepares to release more crude from its strategic reserves to suppress prices.

“The Biden administration has one mission right now, and that is to ease the inflation pain the American consumer is feeling before the midterm election,” said Moya.

Bitcoin almost made a run towards US$20,000 but most investors remained skeptical that this week’s risk rally was going to be short-lived.

“Crypto is locked into consolidation mode, and that will continue until investors are convinced of the risks of the Fed over tightening and sending the economy into a severe recession are gone,” Moya added.

Meanwhile, China’s decision to delay its GDP release yesterday without giving any reason has raised concerns that the data is so bad the CCP decided to postpone it until after the party’s congress, which is still in session.

Now read: As everyone can Xi, I’m totally the only party in town

Looking ahead to today’s session on the ASX, the crucial detailed skilled job vacancies for September data is due out, along with the building activity for the June quarter.

5 ASX small caps to watch today

Hiremii (ASX:HMI)
The recruitment company’s Q1 FY23 revenue increased by 265% on pcp to $4.82m. The company achieved EBITDA breakeven in the September month for the very first time. Cash balance at 18 October was $1.84m.

Encounter Resources (ASX:ENR)
A technical review of the Sandover project in the NT has highlighted several areas with strong lithium potential in the north and in the south, now known as the Junction and Sitch projects. There are three targets, and all three are considered to represent residual terranes that are potentially amenable to surface geochemical sampling. Crawford has been selected as the first target for follow up exploration.

American West Metals (ASX:AW1)
Test work on oxide ores at West Desert shows outstanding metallurgical results, including high recoveries of zinc (89.9%) and copper (78%) using traditional sulphuric acid leaching. The results support the continued study for a combined open pit and underground development opportunity at West Desert.

Celsius Resources (ASX:CLA)
Shallow and high-grade copper assay results from the ongoing drilling program at its flagship MCB copper-gold project include 10.5m @ 0.69% copper and 0.07g/t gold from 19.5m, and 65m @ 1.73% copper and 0.37g/t gold from 66m.

Close the Loop (ASX:CLG)
Close the Loop has commenced its take-back trial in China for Hewlett Packard’s (HP) Indigo products. The trial aims to assist HP customers to create a circular economy solution by transforming their linear supply chains into circular economy supply chains. Upon successful completion, CLG aims to expand the trial to additional countries across Asia Pacific.