ASX Small Caps Lunch Wrap: Anyone else feel like the wheels are about to come off today?

Aussie markets are have opened super-flat this morning, but not before thinning the Stock Dudes herd a little with a cheeky heart-attack inducing plunge when the bell rang at 10am.

The benchmark took its lead from Wall Street, which finished its session yesterday hovering around zero as well.

One company feeling the heat in the US at the moment is Tesla, Elon Musk’s cash cow that has long been something of a flag-bearer for the kind of investors who enjoy a bit of spice in their lives.

You know the kind of person I mean… outwardly normally pretty sedate, but secretly yearning for a bit of a thrill from time to time.

Like my mate Mikey. A standard night out with Mikey would see him have 3-4 beers, schmooze a few ladies and then hop in an Uber around 11pm, because he always has “something to do in the morning”.

But when he orders a fifth beer, all bets are off, and on the 5% of nights when Mikey goes deep, he will invariably be spotted dancing on the bar, missing his pants and his dignity, sweating like he’s run a marathon in a sauna but having the time of his dumb little life.

I think what I’m trying to say is that Tesla investors are kinda like Mikey – because it’s a stock that has had its share of ups and downs, but for the most part has historically been considered a reasonably safe bet.

It’s not doing so well at the moment, though, falling 3% overnight and adding to the depressing stat that since in the past 11 months, Tesla has fallen more than 53%.

In the interests of providing a balanced outlook, it should be noted that if you’d sunk $10k into Tesla when it IPO’d in 2010 and stuck with it through two stock splits, you’d still be up better than 14,000% on your investment.

But that’s neither here nor there, because Tesla is under some heavy scrutiny at the minute, which is starting to get worse – and it’s not just over the alarmingly high number of incidents the automaker’s self-driving tech has been involved in.

The Associated Press is reporting that busybodies from the National Highway Traffic Safety Administration are opening a fresh investigation into the carmaker because … *checks notes* … the steering wheels are falling off some of the company’s 2023 Model Y vehicles.

A quick read through the Tesla Model Y owner’s manual reveals that this is not supposed to happen.

One driver, identified as self-proclaimed Tesla investor Prerak Patel, reported that the steering wheel came off his Model Y while he and his family were hurtling along in the fast lane of a New Jersey freeway.

When Patel contacted Tesla to make an extremely justifiable complaint, the company responded with “a cost estimate of $103.96 to repair the problem”.

Pardon my French, but c’est quoi ce binz?

The only bright side is that the car could, theoretically, drive itself to a Tesla service centre, where they’d probably want to charge you $12,000 to clean the “Sweet Mother of Mercy the steering wheel’s come off!” poop off the seats.

TO MARKETS

Aussie markets are flat today – so horribly flat, that if the ASX was a musical performance, it would sound just like this:

That will never not be funny.

There’s a sense that investors are bracing for something, or they may just be taking a breather after a bruising few weeks of the markets being at the mercy of fiscal regulators saying a bunch of “tough love” inflation stuff that investors really don’t like to hear.

Materials (0.9%) and Health Care (-0.8%) are acting as the anchors today, while the rest of the market treads water, except for InfoTech which is surging 2.4% so far today.

Most of that is probably down to $12 billion market capper Xero (ASX:XRO), which has rattled off an 8.3% rise this morning, after the company announced a “a program to streamline its operations, realign the business to drive greater operating leverage, and better balance of growth and profitability”.

Translation: a bunch of people at Xero are probably about to get canned, which sucks for them but it’s great for investors, who love things that are streamlined and disciplined.

NOT THE ASX

US markets delivered results that are both flat and mixed, like a shonky rum and post-mix coke from Sydney’s Fabulous Rooty Hill RSL.

That’s despite US Fed chief Jerome Powell having the gall – nay, the audacity – to turn up to talk to US Congress for the second time in two days. However, this time round, he toned down the messaging.

“We’re not on a preset path, and we will be guided by the incoming data,” Powell said in his second day of testimony at Capitol Hill. “We have not made any decision about the March meeting.”

That seems to have placated US investors a little, but they are still quite clearly on edge.

“It appears that Wall Street is getting ready for a recession. How bad of a recession will depend on what happens with these next few inflation reports,” Oanda analyst, Edward Moya, told Earlybird Eddy this morning.

In Japan, the Nikkei is up 0.44% in the wake of news that Japanese police have conducted a series of raids and made their first arrests in relation to the wave of Sushi Terrorism that has had the nation on tenterhooks.

Three would-be YouTube stars were arrested after being identified in a video recorded inside a branch of kaiten sushi chain Kura Sushi in the city of Nagoya, Aichi.

The arrests mean diners in Japan can now start to feel comfortable putting slices of raw eel in their mouths, without having to worry that someone else might have already touched it.

In China, things are quiet… almost too quiet. The normally hyperactive Hang Seng is just hangin’ about at 0.26% while Shanghai has posted just +0.10 in very early trade.

In CryptoWorld, it turns out that the rumblings about crypto-friendly bank Silvergate were true, after the company revealed that it’s going into voluntary liquidation.

It’s not a total disaster, as everyone with half a brain could see this was coming, so it’s largely been priced in by the market already, but the majors like Bitcoin are still lagging.

There’s more to the story, but lucky for you Rob “I ordered bulls, not bears” Badman has it all covered over at Mooners and Shakers today.

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for March 1 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

The standout winner in Small Caps this morning is Prescient Therapeutics (ASX:PTX), flying up the charts with a 23.7% gain following news that the US FDA has granted the company’s PTX-100 drug for the treatment of all T-cell lymphomas (TCL), including cutaneous TCL (CTCL) additional Orphan Drug Designation (ODD).

It’s all very complicated, and you can read more about it here, but in a nutshell, the decision means PTX has guaranteed market exclusivity for this treatment for 7 years, which is – obviously – huge news.

Vonex (ASX:VN8) recovered 21.4%, after a tragic decline in the wake of an earnings report in late February.

The only fresh news from Vonex since then is news that company director Jason Gomersall acquired 4.25 million more shares in VN8 three days ago. Exquisite timing.

There’s a whole big bunch of penny stocks doing penny stock stuff and moving around violently for no reason on sweet FA volume, until we reach Sequoia Financial (ASX:SEQ).

SEQ has climbed 14% this morning on news that it’s jettisoned 80% of its equity interest in Morrison Securities.

New Quantum Holdings, a company that provides digital wealth management platform services, has agreed to buy it for $40.5m in cold, hard cash – leaving Sequoia with a debt free balance sheet with net working capital of $10.5m.

SEQ says that $500k of that will be set aside to establish a trust for all employees of Morrison Securities which will hold shares in SEQ and vest to employees over the next 18-month period, which is a nice way to say “Sorry we sold you”, I guess.

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for March 1 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort: