• The ASX is set to fall after a slide in New York 
  • Mega techs’ earnings mostly exceeded expectations
  • The crucial Aussie inflation expectations report is due out today


The ASX is poised to open lower on Wednesday after mega tech companies reported their earnings in New York. At 8am AEST, the ASX 200 May futures contract was pointing down by 0.20%.

On Wall Street, the S&P 500 was down 1.58%, the Dow Jones slipped 1.02% and tech-heavy Nasdaq tumbled by almost 2%.

Both Alphabet and Microsoft reported Q1 results after the bell that exceeded expectations.

Alphabet rose 2% after announcing soaring revenues in Q1 of US$69.8bn, versus forecast of US$68.9bn. CEO Sundar Pichai noted Alphabet is continuing to invest in search capabilities, including in the use of artificial intelligence.

Microsoft surged 8% after the bell after its US$52.9 billion in sales and US$2.45 earnings per share (EPS) for Q1 surpassed analyst estimates of US$51 billion and US$2.24 EPS respectively.

First Republic’s shares plunged 50% after the bank revealed that it lost 40% or US$70bn of customer deposits in Q1 following the SVB collapse. Other US regional banks shares were also dragged down on Tuesday.

Other major stocks to report earnings overnight include General Motors (strong earnings beat), McDonald’s (better than expected Q1 profit), Jetblue (an upbeat outlook), and Spotify (missed revenue but reported strong subscriber numbers).


Coinbase sues the SEC

Crypto exchange Coinbase has sued the SEC for clarity on crypto regulations.

Coinbase said it was trying to compel the SEC to respond to a months-old petition asking whether the regulator would allow the industry to be regulated using existing SEC frameworks. The Coinbase share price rose 1.5%.

In other markets, oil prices slumped 2% as mining services company Halliburton signalled that customers are clearly motivated to produce more oil and gas.

“The one positive news for crude was the upbeat outlook from JetBlue on robust demand trends in the second quarter,” said Oanda analyst, Edward Moya.

Spot gold was up half a per cent to US$1,997.10.

Gold is still near the US$2k level and if the bloodbath on Wall Street gets uglier, investors will eventually pile back into the precious metal.

Bitcoin rallied 3% in the last 24 hours to US$28,246, while iron ore fell another 2% to $US101.95 a tonne.

Meanwhile, consumer confidence in the US has weakened more than expected as expectations of a recession rise, with the headline index falling from 104.2 to 101.3.

The survey also noted that “They (the consumers) also expect fewer jobs to be available over the short term.”


Crucial CPI report today

Back home, the monthly CPI report due later today is set to top domestic headlines.

Expectations are for a reading of 7%, with a focus on services inflation as overseas migration swells.

“After plenty of scrutiny over the last week, Philip Lowe and the RBA board’s next move will be more important than ever, and the latest reading on inflation will be the focus for investors this week,” said Josh Gilbert, a market analyst at eToro.

However, Gilbert warns the pause in interest rates by the RBA may be short-lived if this reading comes in hotter than the market expects, as it did in Q4 2022 at 7.8%.


5 ASX small caps to watch today

Change Financial (ASX:CCA)
Change Financial announced the appointment of Tony Sheehan as CEO effective July 3. Sheehan is an experienced senior executive in the payments and technology industry and has held the positions of chief financial officer and chief operating officer for the past nine years at leading payments companies, Global Payments Inc, (NYSE: GPN) and also Change. He replaces Alastair Wilkie who resigned in February.

Booktopia Group (ASX:BKG)
Booktopia also announced the appointment of a new CEO, David Nenke, who will start on May 8. Nenke joins Booktopia with more than 25 years of executive experience in building and transforming digital-focused retail businesses, including the last 15 years working in the US for Amazon.com and Barnes & Noble Education.

Peak Rare Earths (ASX:PEK)
PEK announced that a Special Mining Licence (SML) for the Ngualla Rare Earth Project was granted by the Government of Tanzania. The SML was granted to Mamba Minerals, which is owned 84% by Peak and 16% by the Government of Tanzania. The SML will initially be over the area set out in the original SML application, which covers ~18.14km2 and contains the Ngualla Project deposit, and for a term of up to 30 years.

Aurora Energy Metals (ASX:1AE)
An independent review of historical uranium metallurgical testwork has been completed. Results were highly promising, demonstrating that simple physical beneficiation techniques could be effective. This could lead to an overall reduction in capex and in opex due to the rejection of low-grade material, resulting in a lower mass to chemically process.

Redstone Resources (ASX:RDS)
Returned assay results from 2022 reverse circulation (RC) drilling have confirmed the presence of mafic‐ultramafic nickel source target rocks on Redstone’s West Musgrave Project. RDS says the discovery is highly significant as these rocks are a potential host and/or source rocks for nickel (Ni), copper (Cu), cobalt (Co) or platinum group element (PGE) mineralisation such as that of the now BHP-owned world class Nebo Babel Ni‐Cu‐Co‐PGE Deposit, situated only 40km to the west of the Project.