• The ASX will open lower, tracking Wall Street
  • US tech stocks hammered overnight ahead of Fed
  • Bitcoin plunged 4% in the last 24 hours


The ASX is set to open lower on Tuesday. At 8am AEDT, the ASX 200 Feb futures contract was pointing down by 20 points.

Overnight, Wall Street was dragged lower by tech stocks as we head into tomorrow’s (US time) Fed rates decision.

The S&P 500 fell 1%, while tech heavy Nasdaq was down 1.75% weighed by declines in Microsoft, Tesla and Apple among other tech stocks.

The Nasdaq has so far risen by 10% in 2023, and a note out of Morgan Stanley gave investors a quick reality check.

“Investors seem to have forgotten the cardinal rule of ‘Don’t Fight the Fed’. Perhaps this week will serve as a reminder,” the note said.

The FOMC members meanwhile will meet on Tuesday and Wednesday (US time), with expectations that they will raise rates by 25bp.

This will also be a big week for the earnings season as 20% of the S&P 500 report their results.

Among the companies to report later this week include Apple, Meta, Amazon, Alphabet, McDonald’s, and General Motors.

In other markets, US treasury yields climbed  (bond prices down) while crude oil prices fell around 2% overnight.

“Oil is pulling back as the vibe on Wall Street is to be ready to de-risk later this week,” said OANDA analyst, Edward Moya.

Energy traders will also pay close attention to this week’s OPEC+ meeting, with Putin reportedly giving the Saudi crown prince a phone call overnight.

In other news, the Biden government is said to be considering cutting off China’s Huawei completely from all of its American suppliers including Intel and Qualcomm.

And Abu Dhabi’s International Holding, a fund held by the UAE royals, will invest about US$400 million in Adani Enterprises after voicing its confidence for founder Gautam Adani.

Adani’s share price has plunged by 16% in the last five days, wiping out US$70bn from its market cap.

Bitcoin also plunged 4% in the last 24 hours to US$22,760.

BTC has declined this week as Wall Street becomes defensive ahead of the Fed.

“For cryptos to have any underlying support given all the regulatory and contagion fears, inflation risks need to go away,” said Moya.

Looking ahead at today’s session on the ASX, expect to see housing credit, private sector credit and retail sales data to be released.


5 ASX small caps to watch today

Halo Food (ASX:HLF)
In under one month, the Healthy Mummy range has received a third order from Woolworths as the product commences its national roll-out through the Woolworths network. The value of the opening orders from Woolworths was worth $545k, which is 22% of the estimated annual sales for the range.

Delta Drone (ASX:DLT)
Delta announced a contract with Black Mountain Mining in South Africa, owned by Vedanta Zinc, to provide drone surveying services. It’s a two-year contract (16 months remaining), with a Total Contract Value (TCV) of $281k, and Annual Recurring Revenue (ARR) of $211k.

Pointsbet (ASX:PBH)
PointsBet and NBC Universal Media have amended their services agreement to extend their partnership to target live betting states in the US. Pointsbet also reported a record group Total Net Win of $103.4m for Q2, up 34% on pcp.

Sovereign Cloud (ASX:SOV)
Sovereign has appointed Peter Maloney as its new CEO effective immediately. Phil Dawson, AUCloud’s founder, will assume the role of executive director and report to Maloney. Sovereign also reported total revenues for Q2 of $1.4m, up 23% on the pcp.

Veris (ASX:VRS)
The spatial data services company reported unaudited H1 FY23 revenue of $52.5m, up 23% on the pcp. EBITDA in the first half was $5.4m, up 77% on the pcp. Veris says it has a strong, secured forward pipeline of work in excess of $55 million.