• The ASX will rise much higher again for the second consecutive day
  • Wall St surged by 3% overnight on weak jobs data
  • Elon Musk revived his Twitter bid

After the 3% surge yesterday, local shares are poised to open higher again on Wednesday with the ASX 200 October futures contract pointing up by 1.60% at 8am.

Overnight, Wall St once again rallied on the back of weak economic data, with all major US indices surging by around 3%.

The US job openings dropped to 10.1 million in August, the biggest fall since June 2021.

Bad economics data has become good news for the stock markets these days as they lessen the chance of a more aggressive Fed stance.

The RBA’s surprise decision yesterday to hike by just 25bp has set the tone, and now a lot of traders on Wall Street are expecting the Fed to also soften their tightening pace.

US Treasuries extended their advance (yields fell) after the labour report, with the benchmark 10-yr yield falling another 3bp.

In company news, Twitter stock price jumped 22% as Elon Musk revived his original US$44bn for the social media platform.

In a notice to the Court, Musk’s lawyers wrote:

“We write to notify you that the Musk Parties intend to proceed to closing of the transaction contemplated by the April 25, 2022 merger agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby.”

The news sent crytocurrencies to post their biggest increase in a month.

Bitcoin rose 3.75% to US$20,370 while Dogecoin, Musk’s favourite coin, gained 8% to US6.5c.

Oil prices also spiked 3% after reports that OPEC+ is now considering slashing output by as much as 2 million bp, double the 1 million bpd reported earlier.

“With OPEC+, we have grown used to under promise and overdeliver. The Saudis run this show and they know oil prices are at a make-or-break level,” said OANDA analyst, Edward Moya.

Brent crude is now trading at US$91.65 a barrel, while gold also jumped by 2% overnight to US$1,726 an ounce.

“A peak in rates is music for gold’s ears.  Gold is now comfortably above the $1700 level after the RBA surprised markets with a smaller-than-expected 25-point interest-rate hike,” said Moya.

Back home, corporate watchdog ASIC has sued Harvey Norman (ASX:HVN) and Latitude Group (ASX:LFS) – claiming that both companies ‘misled’ customers.

ASIC said advertising launched by Harvey Norman did not disclose that consumers could only use the interest-free payment method if they used a Latitude GO Mastercard.

Looking at ahead to today’s ASX session, Australia retail sales data for August is due out, the RBNZ will announce its rates decision, and Japan will release its Nikkei services PMI.


5 ASX small caps to watch today

TwentySeven Co (ASX:TSC)
Rio Tinto Exploration (RTX) has exercised its option to farm-in to the non-gold rights on E57/1134 pursuant to its March 22 option agreement with TSC. RTX is planning to conduct a focused initial drill program of 500-1000m to test the interpreted lithium pegmatite targets in 2023. TSC meanwhile, retains all gold mineral rights in respect of North Rover.

SRG Global (ASX:SRG)
SRG Global’s Aboriginal Joint Venture Bugarrba PJV has been awarded a five-year term contract valued at ~$40m. The project will see SRG provide engineered scaffold services for Iron Bridge Operations in WA. Bugarrba is a partnership between members of the Njamal People and SRG Global.

Apollo Minerals (ASX:AON)
A new exploration permit (Keri) granted to Apollo has expanded the Kroussou Zinc-Lead Project footprint by 140%, importantly into the western basin region which has the potential for large-scale, Mississippi Valley-Type mineralisation. Keri is 100% owned by Apollo Minerals and covers 1,377km2 directly along strike.

Latin Resources (ASX:LRS)
Drilling results have confirmed significant Colina West Prospect discovery of 18.71m2 @ 1.32% Li2O. There are also further encouraging results from the Colina Prospect drilling including: 3.15m @ 2.12% Li2O.

Burley Minerals (ASX:BUR)
Burley announced the signing of an Access and Heritage Protection Agreement for its Cane Bore Project exploration licence application. The agreement was signed by the Buurabalayji Thalanyji People who are the native title holders under the Native Title Act for a proportion of the Cane Bore Tenement.