Market Highlights: Wall Street slumps, while RBA could trigger ‘volatility’ on the ASX today

• The ASX will open lower on Friday after a Wall Street slump overnight
• Disney and Yahoo to lay off thousands of employees
• RBA expected to revise inflations forecasts today

The ASX is poised to open lower this morning as US stocks faded in the latter part of the session. At 8am AEDT, the ASX 200 Feb futures contract was pointing down by 0.20%.

Overnight, Wall Street initially rallied as both German inflation cooled and some positive earnings led by Disney shares.

But at the close, the three major indexes were down – S&P 500 by 0.85%, the Dow by 0.74%, and tech heavy Nasdaq by 1%.

Disney rallied 1.5% after a strong profit beat and the announcement of a major restructuring that will slash $5.5 billion in costs, including cutting its workforce by 7,000 jobs. Yahoo also announced it will lay off 1,000 employees.

Congress questioned former Twitter executives over the company’s decision in 2020 to block users from sharing a New York Post story about Hunter Biden’s laptop.

This came as the Twitter platform went down for about 90 minutes yesterday, informing users around the globe they had reached their daily limit on posts.

In Europe, Credit Suisse sank 15% after reporting a loss of 7.3 billion Swiss francs (US$8 billion) for the full year.

Meanwhile, despite the cooling US job market, traders are still placing bets that the Fed will tighten more than what Wall Street is pricing in.

First-time claims for weekly US jobless benefits rose by 13,000 to 196,000, the first increase in six weeks, indicating that the job market is beginning to cool down.

“A month ago, it seemed very likely that the Fed would be done raising rates in March and now that view could be changing,” said OANDA analyst, Edward Moya.

Back home, the RBA will release its official statement on monetary policy at 11.30am AEDT.

The RBA had lifted rates by 25bp earlier this week, and today, the central bank is set to release its updated economic forecasts.

Jessica Amir, a market strategist at Saxo Market reckons the RBA could make upward revisions to underlying inflation forecasts.

“For investors, this means volatility in the ASX200 could pick up on Friday,” she said.

Financials and insurers could be supported, but consumer discretionary stocks will likely face headwinds if inflation does get revised, said Amir.

And Bitcoin has plunged 4% in the last 24 hours to US$21,955 as investors start betting on more ongoing Fed rate increases.

5 ASX small caps to watch today

Imugene (ASX:IMU)
Imuegene has received a patent grant in the US related to its B-cell activating immunotherapy PD1-Vaxx, currently in clinical development for non-small cell lung cancer. The patent protects the technology to 2038, which includes the composition of matter and method of Imugene’s PD1- Vaxx for the generation of a therapeutic antibody response.

Centrex (ASX:CXM)
Centrex has signed a binding transport and logistics agreement with Aurizon Operations for transport, storage and stevedoring services for Aurizon’s Ardmore Phosphate Rock product. Under the terms, the guaranteed mine-to-port transport capacity increases from 216,000 tonnes in year one, to 508,800 tonnes per annum in subsequent years.

Riversgold (ASX:RGL)
Lithium drilling is to commence imminently for the Earl Grey Prospect at Mt Holland. Initial works include up to 2,000 m reverse circulation (RC) holes with the option for diamond tails, which allow for 5 drill holes at up to 500m deep each. The campaign will commence immediately upon approvals.

Pengana Capital (ASX:PCG)
Pengana has agreed to divest its 65% direct equity stake in Lizard Investors, a Chicago-based asset management firm that specialises in global small to mid-cap equities, as part of a management buyout led by Lizard CIO, Jon Moog. The Lizard divestment is expected to be earnings accretive in the second half of FY23, however it will result in Pengana’s reported total funds under management reducing by circa $258 million.

Orbital Corp (ASX:OEC)
Orbital UAV announced unaudited half-year FY23 revenue and other income of $13.1m. The company has increased its revenue diversification, and has maintained its full-year revenue guidance. Orbital’s balance sheet was strengthened during the half through $5m capital raising, and accelerated WA Government loan offset program.