• Wall Street fell after report shows US inflation cooled in March
  • US plans to increase EV car sales tenfold by 2032
  • Expert says go long gold, BTC, and ETH

 

The ASX is set to open flattish on Thursday after a modest selloff in New York following the inflation report. At 7.30am AEST, the ASX 200 April futures contract was pointing down by just 2 points.

Overnight, US stock indices fell by less than half a per cent after US inflation for March came in at 5% (from 6% in Feb), the lowest since 2021 when it first began to climb.

But core inflation, which is closely watched by the Fed and does not include volatile energy and food prices and, rose 0.4% from the prior month.

Housing costs were the biggest contributing factor to this inflation report, with food at a distant second place.  The energy index plunged 3.6% in March, but that’s expected to rise given the sharp rise in oil prices recently.

After the inflation report, the Fed’s Tom Barkin said there is more to do to get core inflation down.

“I’m waiting for inflation to crack … It’s moving in the right direction,” he said.

Now read: US inflation read shows consumer prices rose at their slowest pace in 2 years, but even that’s uncomfortably exciting

Separately, the Fed’s March meeting minutes released overnight suggest that FOMC members were projecting a “mild recession” for the US economy.

“Wall Street wants the Fed to be done with this rate hiking campaign but with core inflation nowhere near target, more work needs to be done,” said Oanda analyst, Edward Moya.

“Investors might not necessarily want to aggressively pile into risky assets before the big banks kick off earnings season.”

 

US aims to increase EV car sales tenfold by 2032

In stock news, American Airlines plunged 9% after saying that Q1 profit could come in below expectations as the company faces higher costs.

Freight container company Triton International climbed 32% after Brookfield Infrastructure said it will buy Triton in a US$13bn deal.

Chinese stocks listed in New York mostly fell, with Alibaba slipping by 3%.

A Pew survey just released showed that 38% of Americans viewed China as an enemy, up 13% from last year.

Shares in LVMH, the world’s biggest luxury group, fell modestly in Paris despite rising sales in the first quarter.

Meanwhile, the US has unveiled new proposed auto emissions rules, aiming to accelerate the uptake of electric vehicles to two-thirds of all new car sales by 2032 – a nearly 10x increase over current electric vehicle sales.

The proposed regulation, announced last night by the Environmental Protection Agency (EPA), would set tailpipe emissions limits for cars made between 2027 through 2032, the strictest rules ever imposed.

 

Long gold, Bitcoin and Ethereum

Crude prices climbed again by 2% to the highest level this year, with Brent now trading at US$87.20 a barrel.

Oil got a boost from Energy Secretary Granholm who said the US wants to soon bring the Strategic Petroleum Reserve (SPR) back to pre-Ukraine war levels.

Spot gold lifted by 0.5% to US$2,014.50 an ounce as signs of cooling inflation bolstered bets that a pause in Fed rate increases is imminent.

Bitcoin fell 0.6% in the last 24 hours to US$29,971.

Galaxy Digital founder Mike Novogratz told Bloomberg that he expects gold, Bitcoin and Ether to outperform as the Fed moves toward easing.

“The clearest trades have been and will continue to be long gold, long the euro, long bitcoin, long Ethereum — these assets that should do well with the Fed stopping hiking and then cutting,” Novogratz said.

Looking ahead today, two crucial data will be released in Australia – the unemployment and CPI expectations reports.

 

5 ASX small caps to watch today

Metro Mining (ASX:MMI)
MMI announced that 2023 production of bauxite has commenced on 1 April from its Bauxite Hills Mine, located on the Western Cape York. The company said it can sell every tonne it produces in this current tight market, and is pushing for increased prices which represent fair value for its refinery customers versus competitive material from Australia and Guinea. MMI sees this flowing through to CIF and FOB equivalent prices in Q2 and for the rest of the year.

PharmAust (ASX:PAA)
PharmAust has launched a international search for a CEO. The board is seeking a CEO with strong knowledge in FDA certification and global licensing agreements as PAA advances medium-term milestones. These include preparation for a Phase 3 trial for Canine B-Cell Lymphoma, and preparation for a Phase 2 MND (motor neuron disease) trial.

Encounter Resources (ASX:ENR)
ENR announced that new REE  (rare earth element) projects have been secured (100% ENR) in the Laverton region of WA. The company says it sees significant REE potential. Targets at Irwin are centred on a structural corridor that extends northwest from the Mt Weld carbonatite (100km SE).

Future Battery Minerals (ASX:FBM)
Assays results have been received from the maiden reverse circulation (RC) drilling programme at the 80% owned Nevada Lithium Project. Thick high-grade lithium (Li) claystone has been intercepted at Western Flats and San Antone East, with standout results including: 109.7m @ 766ppm Li from 135.6m depth, and 44.2m @ 570ppm Li from 169.2m.

Raiden Resources (ASX:RDN)
Raiden has entered into a binding agreement with Konstantin Resources regarding the sale of its 100% owned Majdanpek West project in Serbia. Key terms include: $300k payment in stock or cash payments to Raiden, and Raiden retaining a 1% NSR over the project area.

 

At Stockhead we tell it like it is. While PharmAust, Future Battery Minerals and Encounter Resources are Stockhead advertisers, they did not sponsor this article.

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