Aussie markets have opened lower today, sinking 0.5% within minutes of the bell ringing and – like an obviously mismatched fighter getting their clock cleaned by a triple-fisted roid-raging nightmare – it’s been stubbornly refusing to get up off the floor ever since.
It’s tracking Wall Street lower after US stocks retreated in the face of a worse-than-expected US Wholesale Prices jump which gave investors yet another excuse for a massive attack of the jitters.
It’s almost like so-called “mainstream” investors are abandoning all pretense of having any risk appetite at all – unlike a few Reddit-dwelling malcontents, whose apparent entire reason for being is to make appallingly risky market moves and post about how badly they’ve ruined their lives.
That’s the good folks over at Reddit’s now-infamous /r/WallStreetBets – a hot, moist pocket of weaponised degeneracy that rose to fame off the back of the Gamestop meme stock craze, splintered into a few brutally weird offshoots, and gifted the world a reddit user called /u/controlthenarrative, whose story is amazing in and of itself.
After using what seemed like considerable intelligence to figure out a way to game trading platform Robinhood to provide him with 25x leverage, he took every penny he could lay his hands on, sunk the lot of it into Apple puts – and was livestreaming what he thought would be an epic victory.
What we got instead was a vision of a man who had, in the space of seconds, found himself at the bottom of a very, very deep hole – and the sub’s “Guh” meme was born.
WSB remains one of the more thoroughly entertaining bits of the internet – for most people, at least.
News came in overnight the subreddit’s founder, Jaime Rogozinski, has reportedly decided to sue the platform, after he was removed as a moderator and banned from the site entirely after he tried to trademark “Wallstreetbets”.
Reddit has responded to the lawsuit thusly: “This is a completely frivolous lawsuit with no basis in reality. Jaime was removed as a moderator of r/WallStreetBets by Reddit and banned by the community moderators for attempting to enrich himself.”
“This lawsuit is another transparent attempt to enrich himself. It’s telling that he is filing this suit three years after he was banned from r/WallStreetBets and long after the community rose in mainstream popularity without his involvement.
“We’ll respond directly in court and continue to protect the best interests of the communities and moderators on our platform.”
It’s not clear which way the chips are going to fall for Rogozinski – but with Reddit reportedly aiming at an IPO in late 2023, this is the kind of thing the site’s owners are likely to want dealt with and done, well before the lunatics at WSB figure out whose turn it is to go spectacularly broke when the site is taken public.
TO MARKETS
As we trundle into the lunch break, the ASX 200 is still around -0.5%, despite the Feb futures contract pointing up by 0.10% before the market opened this morning.
InfoTech (-2.05%) and Real Estate (-1.78%) seem to be taking the worst of the beatings this morning, with Energy (-1.06%) extending its sour form from yesterday.
Utilities is the big turnaround tale today. It’s up 1.24% so far, with Consumer Staples up 0.38% and the grossly-overweight Financials sector sweating and grunting its way to the dessert bar for a +0.08% sundae.
At the top end of town, QBE Insurance (ASX:QBE) has posted a happier-than-FY21 set of results for FY22 to climb 8.21%, while A2 Milk (ASX:A2M) has added 5.4% this morning on news that the Ministry for Primary Industries is set to commence the audit process of Synlait Milk’s Dunsandel facility in NZ, on behalf of China’s State Administration for Market Regulation.
NOT THE ASX
Overnight, all major stock indices on Wall Street fell by around 1% each after a hot PPI reading and comments from Cleveland Fed President Loretta Mester, reports Earlybird Eddy Sunarto this morning.
US wholesale prices (or PPI) jumped 0.7% in January, the biggest gain since last summer and an indication that inflation remains a bit sticky – and Mester’s comments that she has seen a “compelling case” for a 50bp rate hike at the next FOMC meeting really didn’t help make investors feel super-happy in New York.
“At this juncture, the incoming data have not changed my view that we will need to bring the Fed funds rate above 5.0% and hold it there for some time,” she said.
It wasn’t a great night for EV enthusiasts. Tesla dropped 5% after announcing that it will be recalling hundreds of thousands of vehicles after authorities in the US said the company’s automated-driving technology could increase the risk of a crash.
The company meanwhile said it will make 7,500 of its chargers (out of ~17,700) available to drivers of vehicles made by other automakers by the end of 2024, which seems pointless because the batteries on those cars will be completely flat well before then.
And speaking of EV batteries, manufacturer QuantumScape crashed 19% after it told investors “we must continue to improve cell reliability as we move from prototype to product.”
Around Asian markets this morning, Japan’s Nikkei has taken a knock to the Nagiris, dropping 0.43%.
In China, very early trade is showing both Shanghai and Hong Kong trending lower today as well, both down around 0.13% apiece.
In crypto, some raised eyebrows about US$400 million that went from Binance’s coffers to somewhere it probably shouldn’t have gone. That’s causing heartburn on the market, weighing heavily on the majors which all stumbled mid-morning.
Some idiot wrote more about it in Mooners & Shakers, but has since forgotten the rest of what’s in it for this morning, so best you pop over there to find out what’s actually going on.
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for February 17 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap MEG Megado Minerals Ltd 0.075 74% 39,309,764 $5,912,500 SOV Sovereign Cloud Hldg 0.19 41% 50,214 $22,956,841 CCE Carnegie Cln Energy 0.002 33% 802,844 $23,463,861 RVS Revasum 0.315 31% 966,288 $25,419,997 RMY RMA Global 0.14 27% 290,792 $61,373,690 AUK Aumake Limited 0.005 25% 9,100,000 $3,497,788 AHQ Allegiance Coal Ltd 0.0135 23% 10,628,900 $11,053,855 XTC Xantippe Res Ltd 0.006 20% 337,907 $52,900,498 CL8 Carly Holdings Ltd 0.02 18% 30,491 $3,474,297 WEC White Energy Company 0.245 17% 290 $8,519,551 AMD Arrow Minerals 0.007 17% 28,857 $15,202,591 CBH Coolabah Metals Limi 0.155 15% 543,245 $5,062,500 GTG Genetic Technologies 0.004 14% 4,874,923 $40,395,804 BCK Brockman Mining Ltd 0.025 14% 14,997 $204,165,107 AVM Advance Metals Ltd 0.01 11% 100,000 $5,220,397 LDX Lumos Diagnostics 0.04 11% 75,000 $7,992,736 PGY Pilot Energy Ltd 0.02 11% 2,149,999 $14,506,697 XRG Xreality Group Ltd 0.051 11% 394,026 $19,502,534 GBZ GBM Rsources Ltd 0.041 11% 60,929 $20,822,326 AW1 American West Metals 0.052 11% 1,324,534 $7,247,795 AWV Anova Metals Ltd 0.21 11% 484,874 $81,901,174 ADY Admiralty Resources. 0.011 10% 500,000 $13,035,792 CHK Cohiba Min Ltd 0.0055 10% 100,000 $8,866,221 DOU Douugh Limited 0.011 10% 54,131 $9,823,359 AGR Aguia Res Ltd 0.057 10% 545,558 $20,849,870
Charging hard up the charts this morning is Megado Minerals (ASX:MEG), coming out of a trading halt waving the receipt from its purchase of the large-scale Cyclone Lithium project in James Bay, Quebec.
The Cyclone Project is centred on approximately 130km2 of the Aquilon Greenstone Belt, and has had limited historical exploration for lithium, while also being highly prospective for massive nickel sulphides and orogenic style gold deposits, Megado says.
It’s also right next door to the highly-regarded Patriot Battery Metals’ (ASX:PMT) Corvette project, Winsome Resources’ (ASX:WR1) Adina & Cancet projects and Cosmos Exploration’s (ASX:C1X) Corvette Far East project.
Megado is up close to 80% this morning as a result.
Following on from yesterday, Revasum (ASX:RVS) is still climbing, and still has no news to offer any explanation for why it’s doing so.
It’s added another 30% this morning, taking its rise to 58% for the week, and more than 130% higher than it was when all the fireworks went off over Sydney Harbour and a few people’s dogs ran away.
And last but not least for this morning, Allegiance Coal (ASX:AHQ) has seen a spike in interest this morning, climbing more than 18% after announcing its decision to pivot back to metallurgical coal production at both its operating mines.
“This is in response to the dramatic fall in thermal coal prices for coal delivered to Europe, and the significant recovery in metallurgical coal prices over the last two months,” the company says.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for February 17 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap GLV Global Oil & Gas 0.001 -50% 799,999 $6,857,606 AQX Alice Queen Ltd 0.001 -33% 22,530 $3,795,431 MEB Medibio Limited 0.001 -33% 704,999 $4,980,891 XST Xstate Resources 0.0015 -25% 4,128,210 $6,430,363 MFB My Food Bag Grp Ltd 0.29 -19% 37,650 $87,277,509 PYR Payright Limited 0.049 -17% 95,000 $12,359,239 OAU Ora Gold Limited 0.005 -17% 2,353,618 $5,905,388 SI6 SI6 Metals Limited 0.005 -17% 38,461 $8,972,368 WOO Wooboard Tech Ltd 0.005 -17% 269,823 $1,379,729 S66 Star Combo 0.15 -14% 16,507 $23,639,522 INP Incentiapay Ltd 0.006 -14% 200,000 $8,855,445 IDX Integral Diagnostics 2.71 -14% 1,089,200 $731,489,850 ENR Encounter Resources 0.13 -13% 340,182 $53,328,867 GLA Gladiator Resources 0.02 -13% 350,000 $12,561,908 PNX PNX Metals Limited 0.0035 -13% 325,000 $17,776,231 TMZ Thomson Res Ltd 0.007 -13% 10,146,568 $6,959,608 LAW Lawfinance Ltd 0.035 -13% 12,500 $2,554,706 NYM Narryermetalslimited 0.105 -13% 33,036 $3,658,500 SLZ Sultan Resources Ltd 0.051 -12% 409,997 $4,830,495 GLL Galilee Energy Ltd 0.15 -12% 166,522 $57,551,375 PWH Pwr Holdings Limited 10.825 -12% 830,356 $1,228,655,362 JAY Jayride Group 0.16 -11% 80,000 $36,397,404 ALA Arovella Therapeutic 0.032 -11% 1,525,692 $27,145,248 RIE Riedel Resources Ltd 0.008 -11% 1,082,638 $12,345,364 FXG Felix Gold Limited 0.125 -11% 20,000 $11,643,296