Market Highlights: US tech stocks rally, dividends at all-time high, and 5 ASX small caps to watch today

ASX is set to rise for a third consecutive day
Tech stocks in the US rallied overnight after a soft jobs market report
Dividends rose in Q2 in Australia and around the world

The ASX is set to open higher for a third consecutive day after tech stocks rallied in New York. At 8am AEST, the ASX 200 index futures was pointing up by +0.6%.

Overnight, the S&P 500 rose +1.45%, blue chips Dow Jones rose by +0.85%, while tech heavy Nasdaq climbed +1.74%.

Stocks were bolstered after data showed the US jobs market was cooling, boosting the Fed’s soft landing hopes.

According to CME Group’s FedWatch tool, interest rate futures are currently signalling an 87% chance the Fed will keep rates steady in September, and a 54% chance it will hold this rate through to November.

Tesla jumped almost 8%, Nvidia by 4%, and other megacap growth stocks all rose as well.

Alphabet was up 2.7% after unveiling watermark and images identification tools generated with AI, and a new version of its custom-built AI chips.

Giant telcos Verizon and AT&T gained 3% after Citi said it was bullish on the telco sector and upgraded both companies to “buy” from “neutral”.

Back home, earnings season continues on the ASX, and today’s reporting schedule include: Flight Centre (ASX:FLT), Prospa (ASX:PGL), Auswide Bank (ASX:ABA) and City Chic (ASX:CCX).

ASX dividends rose in Q2, at record highs globally

Global dividends achieved an all-time high in the second quarter, according to the Janus Henderson Global Dividend Index.

The report also highlights a 23% increase in Australian dividends from the USD$7.3 billion recorded in the same quarter of 2022.

This rise mainly came from contributions from two large companies during a quarter which is seasonally the quietest for Australian dividends.

A significant surge from Woodside Energy, along with a solid increase from Westpac, more than offset a substantial reduction from mining giant Rio Tinto.

From a sector perspective, bank dividends were strong all over the world with few exceptions. They accounted for half the global growth in Q2 as rising interest rates boosted banks’ margins.

Matt Gaden, Head of Australia at Janus Henderson, warned: “Amidst the impressive surge in Australian dividends this past quarter, it’s essential for investors to remain mindful of the concentrated risks within our local mining and banking sectors.”

Gaden said diversification – not only across different industries but also across different countries – can act as a shield against the ups and downs of economic cycles, such as the volatility in commodity prices which are all too familiar for Australian investors.

In other markets …

Gold jumped by almost 1% overnight to US$1,937.21 an ounce.

Oil prices also lifted around +1%, with WTI trading now at US$81.33 a barrel.

Crude traders are cautious as they navigate looming Fed rate hikes and China’s economic hurdles.

Iron Ore 62% fe climbed +1.75% to US$108.65/tonne.

The Aussie dollar was flat at US64.79c.

Bitcoin meanwhile surged +6.45% the last 24 hours to US$27,660.

A US federal appeals court ruled overnight that the SEC must review Grayscale’s application to convert its Bitcoin trust into an ETF, after the regulator had initially denied Grayscale’s proposal.

“This is a monumental step forward for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure through the added protections of the ETF wrapper,” said Jennifer Rosenthal, a spokeswoman for Grayscale.

5 ASX small caps to watch today

RocketDNA (ASX:RKT)
Australian Civil Aviation Safety Authority (CASA) approval has been received to operate RocketDNA’s autonomous drone product (‘drone-in-a-box’) in Australia. The approval was given for two autonomous drone systems (DJI Dock System and Hextronics Global Drone Station), which includes Beyond Visual Line of Sight (BVLOS) and Remote Operations. RocketDNA has now become the first company in Australia to receive approval for DJI’s new to market Dock System.

SILK Laser Australia (ASX:SLA)
SILK has delivered solid full year performance amidst tough market conditions. Reported revenue was up 20% on pcp to $97.6 million. Statutory NPAT was up 11% to $7.1 million. SILK’s network now comprises 145 clinics as at 30 June, up from 127 on the pcp.

AVA Risk Group (ASX:AVA)
AVA said its new Aura Ai-X fibre optic sensing technology has been selected to protect a critical group of European airports. With a total value of approximately US$0.5m, the contracts for Satu Mare and Sibiu Airports in Romania and another Western European hub are for the supply of detection software and equipment, as well as a five-year contract to provide software upgrades and support.

MedAdvisor (ASX:MDR)
The medication management platform saw full year revenue grew to $98.0 million, a 44.6% increase on the pcp. Gross profit rose by 69.7% to $59.4 million, and gross margin improved by 9 percentage points to 60.6% on the pcp.

Astral Resources (ASX:AAR)
Assay results from air-core drilling completed in May demonstrate the opportunity to grow the existing shallow 41koz Mineral Resource with further drilling. Significant assay results returned from a limited air-core (AC) drill program of 33 drill-holes include: 8 metres at 9.58g/t Au from 49 metres, and 10 metres at 5.05g/t Au from 45 metres.