Market Highlights: Records tumble, Powell to testify, and 5 ASX small caps to watch today

ASX to edge lower after Wall Street pulls back
Gold and Bitcoin both touched all time highs
Jerome Powell’s testimony later today US time

The ASX is poised to edge lower on Wednesday, tracking movements on Wall Street. At 8am AEDT, the ASX 200 index futures contract was pointing down by -0.2%.

Overnight, the S&P 500 fell by -1.02%, the blue chips Dow Jones index was down by -1.04%, and tech-heavy Nasdaq tumbled by -1.65%.

Gold climbed further to US$2,129/0z after briefly touching all time highs, while Bitcoin surged past US$69k in a new record high, before profit taking took it back to US$63,500.

Comments by Fed member Raphael Bostic had earlier set the mood for the day, when he said that he only expected one rate cut this year.

“Only when I gain that confidence will I feel the time is right to begin lowering the federal funds rate,” he said.

Investors are now waiting for words from Fed Chair Jerome Powell, who will give a testimony to Congress later today (US time).

To stocks, Apple dropped -3% after a report said that its sales in China were down -24%.

Retailer Target surged +12% after its Q4 profit beat estimates, and plans to renovate and expand its network of stores.

Cybersecurity stock Crowdstrike jumped +19% after hours as the company’s quarterly earnings beat forecasts.

Meta Platforms slipped -1.6% after the company experienced a wave of outages on its Facebook, Instagram, and Threads platforms.

Buying gold mining stocks isn’t the same as buying gold

Bullion has now rallied about US$100 over the past five sessions, touching the all time high of US$2,135.39 set three months ago.

The rise in gold has been fuelled by expectations for rate cuts, geopolitical tensions, and the risk of a stock market pullback.

Larger-capped ASX gold stocks such as Evolution Mining and Northern Star are also up 10% in the last two days, but many of the smaller miners have failed to track the higher prices.

Experts say one mistake investors make is thinking buying gold mining stocks is the same as buying the bullion metal itself.

While it’s true that in the short term, the price changes of gold mining stocks will be impacted by movements in the bullion price, in the long term what investors must understand is when they buy mining stocks, they are really buying a business.

And businesses are impacted by the fundamentals of the company itself.

For example, a gold mining stock which is struggling from a cash flow perspective will not be tracking the higher movements in gold price.

The other things to watch for when buying a gold mining stock is how much gold it actually produces over a period, and how the company is managing costs when it is extracting the yellow metals.

Other markets …

Gold price rose by +0.6% to US$2,127.75 an ounce.

Oil prices fell by further -1%, with Brent now trading at US$81.96 a barrel.

The benchmark 10-year US Treasury yield tumbled by around 7 basis points (bond prices higher) to 4.15%.

Iron ore futures slipped by -0.8 % to US$114.65 a tonne.

The Aussie dollar fell by -0.10% to US65.05c.

5 ASX small caps to watch today

Alcidion (ASX:ALC)
Alcidion has signed a $3.4m contract extension with DGT NHS Trust in the UK for an additional three years for Miya Precision and associated modules, to deliver electronic observations and assessments, manage patient flow and support electronic documentation.

Zoono Group (ASX:ZNO)
Zoono announced that it has entered into an Exclusive Agency Agreement with OSY Group to promote the sale of Zoono products for the food supply chain sector. OSY is a leading-edge provider of technologies in the hygiene technology sector. The company was recently awarded an Innovate UK Award granting funding to support its food shelf-life extension work.

Constellation Resources (ASX:CR1)
CR1 announced that it has been conditionally accepted as the preferred applicant for six Special Prospecting Authorities with an Acreage Option (SPA-AO) applications over the Edmond-Collier and Yerrida Basin area. The application areas are considered to be prospective for helium and associated gases. The six SPA-AOs cover a total of 712 graticular blocks (56,192km2) over the Edmond-Collier and Yerrida Basins.

Lincoln Minerals (ASX: LML)
Lincoln provided an update on exploration at its Kookaburra Graphite Project on South Australia’s Eyre Peninsula. A further portfolio review by the company’s new management team of potential graphite resources has revealed an additional five graphite occurrences for drill targeting. The review, which includes last year, has also led to an increased confidence in the KGP Exploration Targets, which now total 6Mt-126Mt of graphite at 4-16% TGC.

Artemis Resources (ASX:ARV)
Ground reconnaissance sampling from 100% owned Artemis tenement E47/1746 delivered assay results from the Mt Marie prospect including:  24AR01-14 – 4.67% Li2O, 24AR01-15 – 2.11% Li2O, 24AR01-02 – 1.74% Li2O, 24AR01-06 – 1.68% Li2O, and 24AR01-11 – 1.46% Li2O.