• The ASX is set to rise despite a modest selloff on Wall Street
  • Earnings season begins in the US where major US banks beat expectations
  • Merck and Moderna announced a breakthrough a few hours ago


The ASX is set to open higher on Monday despite a modest selloff in New York. At 7.30am AEST, the ASX 200 April futures contract was pointing up by 0.2%.

On Friday, major indexes on Wall Street fell around 0.4% as the earnings season commenced.

Bank stocks rallied as JPMorgan Chase, Citigroup and Wells Fargo comfortably beat earnings expectations in Q1.

But JPMorgan warned again of a potential recession ahead, while both Citigroup and Wells Fargo both saw commercial real estate as a potential pitfall.

An experimental mRNA vaccine developed by Moderna combined with Merck’s blockbuster immunotherapy Keytruda could cut the risk of death or recurrence of skin cancer by 44% compared Keytruda alone, said US researchers at a medical meeting a few hours ago.

Meanwhile, US retail sales dropped 1% in March, twice as large a fall as expected.

Fed’s Waller said core inflation has not shown much improvement, adding that inflation is still too high. The CME FedWatch tool shows traders are now pricing in a 83% chance of a 25bp hike in May, versus a 70% chance a week earlier.

“The way Fed’s Waller talking about inflation is as if it is hotter than a billy goat with a blow torch,” said Oanda analyst, Edward Moya.


Tokenised gold to be key driver

Crude prices gained over 3% last week, with WTI finishing the week at US$82.51 a barrel.

Oil has been advancing over the past four weeks, basically since OPEC+ announced an output cut which had sent global oil markets to a very deep supply deficit.

Gold pulled back 2% to US$2,003.57, around US$70 shy off all time highs. Gold hit US$2,074.60, its highest price, on March 8, 2022.

Some experts believes gold will likely stabilise around the US$2k level as we go into the “blackout period” ahead of the May 25 Fed decision.

But others are much more optimistic.

“I still expect gold prices to hit record highs and extend gains to $2,100,” said Phillip Streible, chief market strategist at Blue Line Futures.

Bitcoin has been trading flat in the last 24 hours at US$30,358.

A Bank of America report has revealed that the tokenised gold market, which reached US$1bn in value last month, will be a “key driver of digital asset adoption”.

“Tokenized gold provides exposure to physical gold, 24/7 real-time settlement, no management fees and no storage or insurance costs,” BofA analysts wrote.


5 ASX small caps to watch today

Argonaut Resources (ASX:ARE)
Argonaut has completed a 30-hole reverse circulation (RC) drilling program for a total of 3,246m. The drilling program targeted LCT pegmatites at the Darson prospect near Higginsville. Results include: 30m from surface in drill hole DSRC022, and 36m from surface in drill hole DSRC023.

ChemX Materials (ASX:CMX)
CMX says 39 of 94 drill hole results received on Jamieson Tank drill campaign of 6,164m have been completed. Significant manganese intercepts near surface have been discovered and Maiden Mineral Resource estimate is planned by June.

PharmAust (ASX:PAA)
Approximately 10,000 cGMP MPL tablets have been received for the Phase 1/2 MND trial and maintenance dosage. PharmAust says there are now sufficient tablets to commence other human clinical trials.

Eden Innovations (ASX: EDE)
Eden says US market for EdenCrete products continues to grow with both new and repeat customers. EdenCrete Pz7 has successfully completed the 12 months’ NTPEP evaluation.

Trek Metals (ASX:TKM)
Trek says it has now secured all the required approvals to commence its maiden drilling program at the 100%-owned Tambourah Lithium Project in the Pilbara region of WA. A heritage survey was completed recently over key pegmatite targets, with approval also received from DMIRS, paving the way for drilling to commence to test the Central and Eastern Prospects, where surface grades of up to 3.07% Li2O were returned late last year in spodumene-bearing pegmatites.


At Stockhead we tell it like it is. While ChemX Materials and PharmAust are Stockhead advertisers, they did not sponsor this article.