Market Highlights: US inflation down but remains sticky; and 5 ASX small caps to watch on Wednesday
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The ASX 200 is set to open flattish on Tuesday as Wall Street ended the day in mixed territories following the US inflation report.
Inflation in the US rose by 0.5% in January to 6.4% on a yearly basis, a slight drop from 6.5% the previous month.
Although any drop is a good sign, this figure shows that inflation in the US remains sticky.
Bond yields surged soon after the report came out, signalling that traders think the Fed won’t be changing their hawkish message.
“This means Wall Street is still confident that we could see just two more quarter-point rate increases,” said Oanda analyst, Edward Moya.
US stocks meanwhile went on an inflation rollercoaster when the figure was released – with the S&P 500 ending the day flat, the Dow 0.31% lower, and Nasdaq 0.45% higher.
In company news, Amazon’s self-driving car, Zoox, took passengers on Californian public roads for the first time.
Amazon is testing a fleet of Zoox’ robotaxis using employees as passengers, and is now close to launching the service to the public.
In Europe, the UK government is set to reveal its long awaited plans to regulate Buy Now, Pay Later (BNPL) firms in an effort to to stop “unconstrained borrowing”.
According to a survey from NerdWallet, half of Brits with BNPL debt worryingly say they will need to take on more debt to pay off existing ones.
The job market in the UK meanwhile remains hot according to figures released last night, as wages excluding bonuses have risen once more in December.
In commodities, spot iron ore rose +1.7% to $US122.45 a tonne, while Brent crude fell 1% to US$85.75 a barrel.
While oil traders remain very optimistic about China, they know it won’t be a smooth process.
Gold prices held up nicely after the inflation report, trading flat at US$1,854.88.
Bitcoin surged 2.5% in the last 24 hours to US$22,221.
Regulators have gone after crypto firms over the past week, cracking down on staking and the issuing of coins.
Paxos was asked to stop issuing Binance’s branded stablecoin, and the SEC has also cracked down on other crypto firms like Gemini, Genesis, and Kraken.
“It seems everyone is focused on what the SEC will say on staking, and this wait-and-see period could support sideways price action for cryptos,” said Moya.
On the ASX today, companies to report their earnings include the CBA, Cochlear, Fortescue, and Treasury Wines.
Tempest Minerals (ASX:TEM)
Tempest has increased its mineral exploration landholding in the Yalgoo Region by 195km2 to in excess of 1,000km2. This was done through acquisition of five highly prospective licences adjoining existing projects. TEM feels that the region remains unexplored, and on the back of strong exploration results in 2022, the opportunity to make major discoveries in the region remain open.
Octava Minerals (ASX:OCT)
Field reconnaissance has identified a new lithium prospect at Talga named Nimerry Prospect. Multiple pegmatites have been identified at Nimerry in a granite-greenstone contact area. Drill testing of priority lithium targets is being planned immediately after the conclusion of the wet season in Q2-2023.
Halo Technologies (ASX:HAL)
Halo has signed an agreement to acquire 100% of Resilient Fund Manager, a licensed London based financial services entity. The acquisition is expected to springboard Halo’s launch into the large UK and European markets in line with its international growth strategy. The £500k deal was funded by capital raised during Halo’s IPO, and represents a key deliverable stated in the prospectus.
BMG Resources (ASX:BMG)
BMG has expanded its WA lithium and gold footprint after signing a binding deal to acquire the Bullabulling Project located in the Eastern Goldfields of WA. Combined project area is 185km2, and historic rock chip sampling there has returned numerous lithium values greater than 1% Li2O.
MPower Group (ASX:MPR)
MPower’s flagship solar PV and battery storage development in South Australia has reached the ready-to-build stage. MPower’s clean energy development comprises a 5MW solar farm with a DC-coupled 5MW/10MWh battery storage capability. The grid connection terms enable clean energy generated by the solar PV facility to be exported via a 5MW connection to the distribution network.