Market Highlights: Powell tones down, JP Morgan cuts ties with Gemini, and 5 ASX small caps to watch today
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Aussie shares are set to rise at the open as US Fed Chair Jerome Powell toned down his hawkish stance. At 8am this morning, the ASX 200 March futures contract was pointing up by 0.20%.
Overnight, Wall Street finished modestly higher as Powell told Congress future rate hikes are not yet decided.
“We’re not on a preset path, and we will be guided by the incoming data,” Powell said in his second day of testimony at Capitol Hill.
“We have not made any decision about the March meeting.”
Following the comments, the spread between the 2-year and 10-year US Treasury yields still remain inverted, the first time an inversion has occurred since September 1981.
“It appears that Wall Street is getting ready for a recession. How bad of a recession will depend on what happens with these next few inflation reports,” said Oanda analyst, Edward Moya.
The Fed’s Beige Book, a survey on current economic conditions, shows a different picture however. The survey released overnight shows the US economy has been resilient in 2023, marked by steady retail spending and stabilising manufacturing activities.
Meanwhile, President Biden is set to unveil a budget that will reportedly propose a tax hike on Americans earning more than $400,000/year to help keep the Medicare system flush with cash.
Republicans vouched that Biden’s budget will be dead on arrival when he formally sends it to Capitol Hill on Thursday.
To stock news, Tesla dropped 3% as Berenberg analyst slashed his rating on the stock from Buy to Hold, citing “based on misplaced fears of a price war – appears to have been accepted by the market.”
Occidental Petroleum rose 2% as filings show that Warren Buffet’s Berkshire Hathaway bought nearly 6 million shares of the oil stock in recent days.
To commodities, oil prices fell 1.5%, while spot iron ore was down 0.2% to US126.75 a tonne.
“Crude prices can’t shake off fears that the Fed is going to send the US economy into a bad recession,” said Moya.
“Over the next seven days, energy traders will have a chance to see the latest jobs and inflation reports, which means we could have the market confidently pricing in a slightly worse-than mild recession.”
Bitcoin continues to waver around a three-week low, trading at US$22,100 right now.
According to CoinDesk, JPMorgan is ending its relationship with crypto exchange Gemini, which refuted the claim in a tweet.
Despite reporting to the contrary, Gemini's banking relationship remains intact with JPMorgan.
— Gemini (@Gemini) March 8, 2023
The company delivered record annualised revenue of around $3.26 million, a 30% growth since July 2022, driven by new customer contracts which included Tabcorp. The company also recorded upsell to one of the world’s leading betting and gaming companies, Superbet, upgrading its contract by over 60%.
Kuniko has acquired options over three prospective lithium projects in Canada’s prime lithium district of James Bay, Quebec. The projects comprise Fraser Lithium Project: 150 km2 of exploration area with mapped pegmatites containing spodumene.Mia North Lithium Project: 80 km2 of exploration area located on a greenstone belt known to host pegmatites. And Nemaska South Lithium Project: 44 km2 of exploration area which hosts at least 5 mapped pegmatite outcrops.
Krakatoa Resources (ASX:KTA)
A major milestone has been completed through the delivery of a maiden Mineral Resource estimate of 5Mt @ 0.14% Rb2O with a Li2O credit at King Tamba. The size of the Mineral Resource estimate has come in beyond expectations and larger than the company’s exploration target, it said. A decision to advance into preliminary development and economic studies has now been undertaken.
Pure Resources (ASX:PR1)
The exploration budget for the LaForge Lithium Project has been approved to explore the remaining ~95% of the project that was not accessible due to snow, with initial exploration work now commencing. The project covers 261km2 and is located 65km northeast of CV5 lithium discovery by Patriot Battery Metals Inc.
Infinity Mining (ASX:IMI)
Infinity has just completed a reverse circulation (RC) drilling program in the Central Goldfields of WA. 37 RC drill holes were completed for a total advance of 3851 m, on five different projects (Victor Bore, Great Northern, Barlow’s Gully, Camel, Coppermine). Significant gold intercepts include: 7 m @ 1.96 g/t Au, from 32 m, and 6 m @ 1.40 g/t Au, from 25 m depth.