• Wall Street had its worst ever start to the year in 50 years
  • New data suggests the US economy is losing steam
  • The ASX 200 is set to open higher today

Wall Street tumbled again overnight by 1%, ending June as its worst ever start to the year in more than 50 years.

The S&P 500 is now down by 21% since January 1, the Dow Jones by 15%, and tech heavy Nasdaq has plunged by 30% for the year.

Stocks slipped on Thursday after data showed that US consumer spending rose less than expected in May, adding to the fears of a possible recession.

In another sign the US economy might be losing steam, the core PCE deflator came in at a yearly annual rate of 4.8% in May, down from April’s 4.9%.

The PCE deflator is a measure of inflation that’s closely tracked by the Fed, as it takes in prices paid by consumers for goods and services without the volatility caused by food and energy prices.

Retail stocks fell on the news, led by Walgreens Boots Alliance which fell by 7% on lower than forecast quarterly profits.

In bond markets, the 10-year Treasury yield has been falling steadily, and overnight it fell by another 8bps to 3.01%. Just a couple of weeks ago, the yield was trading at more than 3.40%, which was the highest level since March 2020.

“It might be that longer-duration bonds are seeing haven inflows as investors give up on the histrionics of the equity market and lock in some semi-decent long-duration yields,” said Oanda analyst, Jeff Halley.

Global oil prices meanwhile fell by another 2% with the benchmark Brent now trading just below US$115 a barrel. The OPEC+ meeting concluded overnight with members agreeing to the same output for August as previously announced, which was 648,000 barrels per day.

In other markets, base metals dipped by around 2% while Bitcoin has plunged by 6.5% in the last 24 hours to US$18,780.

Ahead this Friday, the ASX 200 is set to open 0.43% higher.

CoreLogic will release its monthly dwelling prices for June; and ANZ will also release its consumer confidence survey data.
 

5 ASX small caps to watch today

EBR Systems (ASX:EBR)
The cardiac disease specialist has successfully completed enrolment for its pivotal SOLVE trial, with headline results expected to be released in 1Q 2023. The company has also agreed to a five-year US$50m growth capital facility with a leading venture debt provider, Runway Growth Capital.

Propell Holdings (ASX:PHL)
Aussie fintech Propell delivered a record Q4, hitting all growth metrics. The number of customers grew 320% on pcp to 2,150 while lending volumes also rose by 320% on pcp to a record level of $3.4m.

Openpay Group (ASX:OPY)
Openpay says it’s implementing a number of strategic changes across the company aimed at accelerating its pathway to profitability in its Australian B2C and B2B businesses. These changes included a material withdrawal from the UK market, as well as seeking US investment from a financial partner given the scale and capital requirements for that market.

Paradigm Biopharma (ASX:PAR)
The Phase II clinical trial evaluating Zilosul biomarker endpoints has reached 100% recruitment. 60 subjects have been randomised into either PPS twice weekly, once weekly, or placebo groups, with initial results expected to be available in Q3 2022.

Enero Group (ASX:EGG)
Enero announced two acquisitions, ROI DNA, a strategic B2B sales and marketing agency, and GetIT, a specialist B2B technology marketing agency. Total acquisition consideration comprises an initial payment of US$26.4 million in cash and US$6.6 million of Enero shares. It will be funded by a three-year revolving bank facility established with Westpac.

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