Market Highlights: Wall Street gains, Aussie CPI ahead, and 5 ASX small caps to watch on Wednesday

The ASX is set to open higher on Wednesday, tracking moves in New York
Jerome Powell gave a speech on the Fed’s independence
The World Bank downgraded world’s economic growth

Aussie shares are poised to track New York higher on Wednesday. At 8am AEDT, the ASX 200 Jan futures contract was pointing up by 0.4%.

Overnight, Wall Street seemed to turn more bullish with stocks, as the S&P 500 climbed 0.70%, the Dow by 0.56% and tech heavy Nasdaq by 1%.

Fed Chair Jerome Powell’s speech at the International Symposium on Central Bank Independence did not touch on monetary policy or interest rates.

However he did say the central bank is not, and will not be, a “climate policymaker”.

“The Fed must resist the temptation to broaden its scope to address other important social issues,” Powell said.

“Taking on such goals would undermine our independence. Fed has narrow responsibilities regarding climate-related financial risks.”

The World Bank meanwhile has downgraded its outlook for global growth from 3% to 1.7%, and warned of a global recession.

The Bank’s president, David Malpass, said: “Weakness in growth and business investment will compound the already-devastating reversals in education, health, poverty, and infrastructure and the increasing demands from climate change.

“The deterioration is broad based – in virtually all regions of the world, per capita income growth will be slower than it was during the decade before Covid-19.”

In other markets, crude prices were higher by 1% as economic optimism grows for not just China, but also the Eurozone.

“The oil market is digesting a global slowdown that might not be as bad as feared,” said OANDA analyst, Edward Moya.

The spot gold price is holding near recent highs at US$1,876.67, while Bitcoin was up another 1.3% in the last 24 hours to US$17,460.

Crypto exchange Coinbase announced another round of layoffs, letting go 950 people this time.

Coinbase CEO Brian Armstrong said, “This is the first time we’ve seen a crypto cycle coincide with a broader economic downturn, but otherwise it is similar.”

Later today, ASX investors will have their eyes on the Australian inflation number, scheduled to be released at 11.30am AEDT.

The ANZ Bank is calling for the CPI to increase from 6.9% to 7%. NAB tips that it will surge to 7.3%.

5 ASX small caps to watch today

Talga Group (ASX:TLG)
Talga has entered into a non-binding Letter of Intent with French EV battery manufacturer Verkor. The deal will see Talga supply its flagship graphite anode product, Talnode®-C, from its 100% owned Vittangi project in Sweden to Verkor over a 4-8 year period.

Red Dirt Metals (ASX:RDT)
Red Dirt has mobilised 5 drill rigs to commence a 60,000 metre drilling campaign at the Mt Ida project. The company has also started a 90,000 metre drilling programme at Yinnetharra. The aim of these drills is to discover and define new lithium deposits ahead of resource drilling planned for later in 2023.

Nyrada (ASX:NYR)
Nyrada says in-vitro safety and toxicology studies on brain injury commenced in the second half of last year are tracking well. The company says there will be no change to the start of Phase I study, expected to commence in H1 of 2023. The Phase 1 trial will evaluate the safety and tolerability of Nyrada’s brain injury drug in two indications, TBI and stroke.

European Lithium (ASX:EUR)
EUR has received a NPV calculation on its 100% owned Wolfsberg Lithium Project in Austria. The NPV is calculated at US$1.504 billion, based on the Measured and Indicated resource of 9.7 million tonnes at 1% Li2O. EUR has said it wants to be the first local lithium supplier for the European battery supply chain.

Aruma Resources (ASX:AAJ)
Further high-grade lithium-rubidium has been intersected at Mt Deans Project. The company recently completed a second phase of drilling at Mt Deans, which comprised 21 reverse circulation holes for 1,409 metres, to depths of between 20 and 120 metres. Results include: 8m at 1.89% Li2O+Rb2O from 26m, and 5m at 1.51% Li2O+Rb2O.