Market Highlights: New banking crisis as First Republic seeks a lifeline; and 5 ASX small caps to watch today

The ASX is set to open lower on Thursday on concerns of a new US banking crisis
Regional bank First Republic said it was seeking a lifeline
Oil prices fell the most since mid-March

The ASX 200 is poised to open lower on Thursday as stocks in New York closed in mixed territories. At 8am AEST, the May futures contract was pointing down by 0.30%.

Overnight on Wall Street, the S&P 500 index was down 0.38%, the Dow Jones slipped 0.68%, while the Nasdaq lifted 0.47%.

US bank stocks fell across the board on growing concern of a new banking crisis.

San Francisco lender First Republic said it was seeking a lifeline after losing 40% or US$70bn of customer deposits in Q1. First Republic shares shed another 30% last night after falling 50% the previous day.

Meta Platforms, the parent of Facebook, surged 11% after hours following its better than expected Q1 results.

Meta’s Q1 revenue came in at US$28.65 billion, versus US$27.65 billion expected by analysts. The company also guided the market to a Q2 revenue of between US$29.5 billion and US$32 billion, versus analysts’ forecast of US$29.5 billion.

Microsoft surged 7% as its US$52.9 billion in sales and US$2.45 earnings per share (EPS) for Q1 surpassed analyst estimates.

Meanwhile, JP Morgan analysts painted a bleak picture for the US stockmarket, predicting a big selloff. The S&P 500 is currently at 4,055, but JP Morgan said it could go as low as 3,500 by early US summer.

In other markets..

Oil fell the most since mid-March, with WTI tumbling almost 4% to US$74.20 a barrel.

Crude prices have seen all of the gains from the OPEC+ surprise production cut erased, as macro backdrop including banking jitters, disappointment with China’s reopening, and fears of Fed overtightening continue to murk the water.

“China’s recovery is not materialising, and US demand is weaker, so $100 oil won’t be happening,” said Oanda analyst, Edward Moya.

Gold price also slipped another 0.4% to US$1,990.61 an ounce.

It looks like gold’s best friend is a little bit of financial stress, and experts say the price will continue to rise unless First Republic is miraculously saved.

“….if we see immediate stress on other midsized banks, the precious metal could make a run towards record highs,” said Moya.

Banking jitters have also revitalised life back into cryptos, with Bitcoin rising by 1% in the last 24 hours to US$28,516.

In other news, Chinese President Xi Jinping and Ukrainian President Volodymyr Zelenskiy finally spoke, bringing hope China can help broker a peace deal.

Looking ahead today, the ABS will release the Australian export & import prices report for the March quarter.

5 ASX small caps to watch today

Osteopore (ASX:OSX)
Osteopore says it has successfully transitioned to the European Union’s Medical Devices Regulation 2017/745 (MDR), joining a select group of companies to transit successfully. Only 12.7% of certificates are approved with the MDR. The company says it is now positioned to take advantage of its advanced compliance to further penetrate the European market worth US$550 million annually.

Mad Paws Holdings (ASX:MPA)
Mad Paws’ Q3 revenue was $6.1m, up 189% on pcp. Cash balance stood at $4.4m. The company says it is building a powerful network effect, as more owners and sitters join the company’s pet ecosystem. Mad Paws also says that it’s on track for operating EBITDA breakeven target by mid 2023.

Immutep (ASX:IMM)
Immutep announced that two abstracts have been selected for poster presentation at the upcoming 2023 American Society of Clinical Oncology’s (ASCO) Annual Meeting, taking place from 2-6 June 2023 in Chicago. New, final data from Part C of the Phase II TACTI-002 trial will be presented.

Cazaly Resources (ASX:CAZ)
Cazaly has secured an agreement to acquire 100% of the Carb Lake Rare Earth Elements (REE) Project in Ontario. The Carb Lake REE project comprises a large, 2.5 to 3km diameter circular magnetic anomaly. In 1968, four shallow holes were drilled with samples returning >5% Ce, >1% La, 0.5% Nb, and no other REEs analysed.

Southern Gold (ASX:SAU)
Southern Gold will develop a new lithium exploration portfolio in South Korea. Exploration licence applications have been lodged over five project areas covering a total area of 454km2 with lithium (Li) anomalies from historical country-wide stream-sediment sample survey.