ASX Small Caps Lunch Wrap: Who else is celebrating the brutal murder of 1.45 million people today?
Local markets have opened with a thud and a groan this morning, shedding 0.5% at open after Jerome “Lord Baden” Powell and his cronies followed the RBA’s lead and dialled his nation’s bidet up to 11 with yet another rate hike.
The entirely predictable response on Wall Street was to set the building on fire and wander down the road to catch salmonella from a dodgy Manhattan hot dog cart, before dying – broke, sweaty and alone – in the back of a driverless Uber.
The American Dream 2.0 is getting a little bleak.
But to lighten the mood somewhat, today’s actually a special day on the calendar for an enormous number of people around the world, because an incredibly sh-tty pun has actually spawned a surprisingly popular event.
Because today is 04 May; a day when the cry of “May the Fourth Be With You” makes serious nerdy types giggle and former World Heavywieght Boxing Champ Mike Tyson feel included.
It is, of course, Star Wars Day – an internet meme holiday that has been seized upon and turned into a heavily corporatised attempt by Big Businesses, trying to be all cool and stuff in front of The Kids.
Do you want to know how we’ll restore balance to the galaxy?
— Fortescue Future Industries (@FortescueFuture) May 4, 2023
… I actually meant that it’s current franchise owners Disney who have co-opted it into a corporate moneyspinner to help keep the world’s money-hungry anthropomorphic rodent sufficiently appeased.
But at its core, today is a celebration of Star Wars, a film that, really, had no right to be anywhere near as popular as it is.
It’s a tale of a young man who lives in a desert, who – following the murder of his aunt and uncle by government troops – gets brainwashed, then radicalised, by a high-ranking member of a weird religious sect and sent off to murder his own father.
Eventually, the young man is sent on what is for all intents and purposes an anti-imperialist terrorist strike, which results in the deaths of roughly 1.45 million people who were aboard the so-called Death Star when it was blown up.
Perspective’s an interesting thing, ain’t it?
The Death Star itself is something of a curiosity – the most powerful weapon in the galaxy, so large it gets mistaken for a small moon.
According to the lore behind the film, it’s actually freakishly massive, measuring roughly 150km in diameter – so big that you’d be hard pressed to park two of them side by side in Tasmania, mostly because former Greens Senator Bob Brown would get very terse about it if you did.
Plus, you’d be hard pressed to even build one in the first place. Obviously it’s impossible to know precise quantities here, but a rough back-of-the-envelope calculation using Australia’s all-conquering Canberra class amphibious naval vessels as a rough guide would put the total quanity of steel required to build one at somewhere around 10,800,000,000,000,000 tonnes.
Which is a lot – especially when it’s currently trading at about $760 per tonne.
Australia currently produces about 5.3 million tonnes of steel per year, which means we should have enough to build our own Death Star in roughly 2,037,735,849 years, give or take a couple of months.
Given its size, it’ll need to be built in space, so all that steel will need to transported by rocket at about the same cost per kilo as organically-farmed lamb cutlets – $2,150 per kilo – on board Elon Musk’s SpaceX rockets.
So – with a raw materials price tag of $8,208,000,000,000,000,000, which will cost $23,220,000,000,000,000,000,000 to transport to the building site, total expenditure on the project is projected to be a number so large that my calculator inserted letters (rather than numbers) into the answer, before bursting into flames.
I know, I know… it sounds like quite a lot – but if we up the Federal cigarette tax percentage to a very reasonable 2,500,000%, and given that we will be able to completely eliminate Job Seeker payments from the budget (someone’s gotta actually build the thing, right?), an Australian Death Star will pretty much pay for itself, while competely future-proofing the nation against the threat of a Chinese invasion.
And following that prolonged outburst of incalculable stupidity, it’s time to double down on the dumb by seeing what the markets are doing.
See you on Talk Like A Pirate Day.
After a somewhat appalling -0.5% start to the morning, the ASX has rallied to a far friendlier -0.1% at lunchtime, with everyone except for the banks doing reasonably well.
Real Estate is enjoying a rare purple patch of form, leading the gains with a 1.4% rise, followed by +1.2% for Materals and +0.95% for Utilities in third.
Perversely, the local Energy sector is on the rise, despite another 5% drop in crude prices overnight.
Holding everyone back from what would otherwise be a pretty solid day is the morbidly obese Financials sector, which has fallen 2.1% as the double-whammy of interest rate rises here and in the US this week has driven bank sentiment into the ground like an iron star picket.
And, in an even bigger sign that the market’s going speculation-crazy, Jumbo Interactive (ASX:JIN) has soared 6.8% this morning on no news, so it’s entirely possible that investors are banking on the general public’s desperation for cash.
(Jumbo makes and manages the software and platforms that drive a huge chunk of the Australian and international lotteries, in case you didn’t get the joke.)
In the US overnight, Jerome Powell’s quest to completely scuttle Wall Street has continued, after the Fed took a leaf from Philip “Rates Are Not Meant To Be” Lowe’s playbook and dropped another rate rise on America’s head.
It wasn’t unexpected, and Wall Street actually rallied on the news, rising quite nicely right up until – you guessed it – JayPow started talking and just ruined the party.
“We, on the committee, have a view that inflation is going to come down not so quickly, and that it would take some time. And in that world, if that forecast is broadly right, we would not cut rates, and we won’t cut rates,” Powell grumbled like a bum on a park bench, deep in conversation with the top of his own shoes.
He’s the financial world’s equivalent of everyone’s “Uncle Ian”, who ruins every wedding he goes to by getting ferociously drunk, grabbing the microphone and demanding to make an incomprehensible toast that somehow ends up with him talking about his stag party in Thailand, where an errant ping pong ball cost his mate Robbie an eye.
Wall Street did what it does best, selling everything off and sinking it all into gold, leaving the major indices there lower, with the S%P down 0.7%, the Dow lower by 0.46% and the aggressively nerdy Nasdaq down 0.8%.
Earlybird Eddy Sunarto reports that it’s the 10th consecutive rate hike, which has brought the Fed funds rate to a 5-5.25% range – the highest since mid-2007.
In Japan, the markets are closed for Greenery Day, so everyone has the day off to go plant a tree.
But, because the celebration (which is meant to be commemorating the birthday of Emperor Hirohito, whose reported love of foliage was only matched by his Vader-like enthusiasm for murdering a lot of people) is only day long, it usually results in only very small trees being produced, flooding the global Bonsai market.
China, however, is back in business after its three-day Labor Day holiday. Shanghai markets are up 0.42%, the SZHSE is down 0.37%, while in Hong Kong the Hang Seng has sing-songed its way to +1.07%.
In crypto, the US Fed’s gender reveal (“It’s a rise!”) was pretty much expected, so nothing of real importance happened, except for the news about fancy new Tier 1 blockchain coin SUI, which fell from grace with an audible -33% thump.
Rob “Who the hell is Grace?” Badman has all the deets over at Mooners & Shakers, because he’s way better at that stuff than the rest of us.
Here are the best performing ASX small cap stocks for May 4 [intraday]:
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Top of the board in Small Caps today is Caspin Resources (ASX:CPN), booming through a 33.9% gain after recent assaying of aircore holes at its Duchess project found significant shallow Rare Earth Elements (REE).
The best of the samples are:
Overall, Caspin is reporting significant proportion of high value light (LREE) and heavy REE (HREE) in TREO, including NdPr:TREO averaging ~19%, HREE:TREO averaging~28%, o Dy2O3:TREO averaging ~2.9%, with significant contribution of Tb2O3 (both HREE) – with potential credits from accessory base metals to sweeten the pot as well.
Anyone who was wondering about recent mysterious movements from Pilot Energy (ASX:PGY) might have been handed an explanation today, after the company announced that it has executed a binding convertible note agreement with a syndicate of sophisticated investors for an investment in the company of $3 million, before costs.
The convertible notes (essentially a type of cash-up loan that can potentially be converted into shares if certain milestones in the agreement are met) were issued at $0.02 per share, well above PGY’s recent market price, which is currently at $0.15 per share, up 25% so far today.
And in third place, GreenTech Metals (ASX:GRE) has continued its price run from yesterday, adding 24.3% this morning to take its total rise since Monday morning to about +160%.
GRE took off spectacularly on Wednesday morning, after revealing that it had drilled into an absurdly thicc copper dominant mineralised horizon with significantly increased thickness and grades up to 5.4% Cu, which also sports some happy side piece gold and cobalt action to keep things nice and spicy.
Here are the most-worst performing ASX small cap stocks for May 4 [intraday]:
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