Market Highlights: The SEC goes after Coinbase; Goldman slashes its iron ore price forecast

The ASX will open higher on Wednesday
Coinbase has also been charged by the US SEC
The AUD/USD rose 1% after RBA decision yesterday, and may go higher

Aussie shares are set to rise on Wednesday following a mixed session in New York. At 8am AEST, the ASX 200 index futures was pointing up by +0.35%.

Overnight, the S&P 500 closed +0.24% higher, and tech heavy Nasdaq fell by -0.21%. The S&P 500 index once again flirted with a bull market, defined as a rise of 20% or more over at least a two-month period.

Microchip stocks like AMD and Intel climbed higher, while Apple slid -0.2% after touching all-time high yesterday as it unveiled the new augmented reality headset.

Crypto exchange Coinbase fell another -12% after falling -9% in the previous session.

Coinbase has been charged by the US SEC for operating as an unregistered securities exchange, broker and clearing agency.

This comes a day after the SEC went after Binance and its CEO CZ, alleging they misled investors about internal controls, secretly allowed customer funds to commingle, and diverted customer funds “as they please”.

Meanwhile, the World Bank said the global economy is in a “precarious situation”, as sharp interest-rate hikes hit lower-income countries.

The bank has cut its 2024 global growth forecast to 2.4% from the 2.7% it announced in January.

AUD could be a play

The AUD/USD currency cross spiked 1% after the RBA raised its rate by another 25bp to 4.1% yesterday.

The majority of economists seemed to underestimate the potential for a hike, although they were arguably caught less off guard than they were in May.

And with the Fed on pause mode, the AUD could look attractive, says Matt Simpson, a senior market analyst at City Index.

“We’ve already seen buyers pile in to the Australian dollar and push AUD/USD to a three-week high, and send AUD/JPY briefly to a fresh YTD high,” Simpson said.

In other markets …

Crude oil prices fell -0.7% as China’s growth forecast suggests a much weaker crude demand outlook.

“But the writing is on the wall that China will become more accommodative, and the resilience of the US economy should suggest oil demand will stabilise soon,” said Oanda analyst, Edward Moya.

Gold prices are wavering as investors await to see what will happen with the recent stock market rally, and if the disinflation process will allow the Fed to skip a rate hike next week.

The bullion price is trading at US$1,963.53 an ounce.

Meanwhile, iron ore prices were up +1.5% to US$106.55 an ounce.

Goldman Sachs has slashed its forecast for iron ore by 18% in the next 12 months, and has a three-month target of US$80 a tonne.

The broker cited iron ore surplus due to weakened global demand, especially from China, as the main reason.

Bitcoin meanwhile bounced back 5% in the last 24 hours to US$27,113. Experts say the market reaction to recent SEC enforcement has been relatively mild.

5 ASX small caps to watch today

Volpara Health Tech (ASX:VHT)
The leading breast cancer detection company has announced a 5-year Software as a Service (SaaS) contract with BreastScreen Victoria, a public breast screening programme. The contract is worth $1.4m, and includes Volpara Analytic, an artificial intelligence (AI) software that assesses every mammogram image for appropriate positioning, compression, and radiation dose.

Andromeda Metals (ASX:ADN)
Andromeda announced it has signed a Term Sheet for the supply of high quality kaolin from the Great White Project (GWP) during the first five years of production, into China. Andromeda will supply a total of 115,000 tonnes of Great White CRM over a five-year period, and 5,000 tonnes of Great White KCM 90 in the first year of production.

Renu Energy (ASX:RNE)
ReNu and Australian superannuation fund HESTA have signed a Platform Agreement that provides the framework for co-investment in hydrogen projects developed by ReNu Energy. The deal provides for potential co-investment by ReNu and HESTA in selected hydrogen projects, with ReNu Energy responsible for the development and operation of the projects.

Alice Queen (ASX:AQX)
AQX said that its applications for two highly prospective critical minerals projects in NSW have been granted. The Gongolgon and Byrock Projects cover an area of ~3072km2, and are located nearby to Sky Metals’ Doradilla REE Project and Legacy Minerals’ project. AQX says there may be lithium-caesium-tantalum in pegmatites, as it plans to commence a geological mapping and sampling program.

Novonix (ASX:NVX)
The battery tech company has entered into an agreement with LG Energy (LGES) to jointly work toward developing artificial graphite anode material for lithium-ion batteries. Under the deal, Novonix will issue US$30 million worth of unsecured convertible notes to LGES . The agreement is intended to lead to the option for LGES to purchase up to 50,000 tonnes of the anode material from Novonix’s US-based facility over a 10-year period from the start of mass production.