• ASX scuttled by bleak rates outlook in the US, down 0.83% for the day
  • RBA boss Philip Lowe had better news for Aussies. Kind of
  • Summit Resources galloped to a win, up 35% on great REE news at Stallion

 

We have comments from US Fed chair Jerome Powell to thank for a proper bloody miserable day on local markets – I’ll explain why in a minute – but for the tl;dr crowd, the salient facts are as follows:

Aussie markets opened Down with a fat, girthy D this morning, where it stayed all day to wind up at -0.83% for the session.

The losses were led by a colossal drop in the Energy sector, which closed out the day off by 4.26%, dragging a number of sectors down with it. The only real winner was Health Care, up 0.36% as the market spent a small fortune in bandages to try to stem the bleeding.

All the real talk that moved the market around today was on interest rates. I know, I know – we’re all a bit bored of that now (at least, I am 100% certain that I’ve had a gutful of writing about them).

But here’s what happened, whether you like it or not.

 

FROM THE HEADLINES

Some… I want to say “good”, but I’m not 100% certain it is… news from Reserve Bank governor Philip Lowe, who has spoken publicly for the first time since he and his cronies put interest rates up again.

Lowe has reportedly said that the RBA has “a completely open mind about what happens at the next Board meeting”, which either means a sensible policy discussion without the spectre of a predetermined rate rise, or everyone’s allowed to wear arseless leather chaps to the meeting. It’s hard to tell.

“At our board meeting yesterday, we discussed the lags in monetary policy, the effects of the large cumulative increase in interest rates since May and the difficulties that higher interest rates are causing for many households,” told a crowd of people angrily brandishing pitchforks and burning torches.

“We also discussed that, with monetary policy now in restrictive territory, we are closer to the point where it will be appropriate to pause interest rate increases to allow more time to assess the state of the economy.

“At what point it will be appropriate to pause will be determined by the data and our assessment of the outlook.”

So… sensible policy talk it is, then. I shall pack my ‘riding gear’ away for another day.

The upshot of all that is the feeling that the RBA Board is set to quit going HAM on the basis points button, and could take more of a ‘suck it and see’ approach over the coming months, which would no doubt bring a tear to the eyes of an army of grateful mortgage holders, if they weren’t already drunk-crying in the shower every morning.

It’s a far different tune to the one US Fed chair Jerome Powell was singing overnight, during a rare live concert for lawmakers on Capitol Hill.

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in prepared remarks.

“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

And that was enough to send investors scattering like cockroaches. The S&P 500 fell 1.55% lower, the Dow fell 1.72%, the tech-heavy Nasdaq fell 1.25%, oil fell $4 a barrel, and – apparently – the sky fell, too.

It was pretty gruesome stuff – but you knew that already.

 

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks:

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Summit Minerals (ASX:SUM) lived up to its name today, rising to the peak of the overall market with a 34.6% gain on the back of some solid proof-of-concept drilling results at its Stallion REE project in Western Australia, which look like this:

  • STRC014: 23m @ 2,162.45ppm TREO from 24m
  • STRC012: 15m @ 3,088.84ppm TREO from 39m
  • STRC011: 17m @ 3,783.4ppm TREO from 61m
    • inc. 1m @ 1.52% TREO from 73m

It’s a great result for Summit, which has been snapping up more and more ground around Stallion for the past little while, with its focus on REE exploration – and one careful eye on the potential of the high uranium content of the surrounding “hot granites” within the project, in the hope that the WA government will eventually reverse its 2017 ban on uranium mining in the state.

Bionomics (ASX:BNO), went zooming 33.3% in exactly 48 minutes this morning – we know that, because it went into a trading halt at 10:48am (after it’s very rapid rise), telling the ASX that it’s got an announcement “in relation to the full results analysis from the PREVAIL Phase-2 Study of BNC210”.

The study is looking into whether BNC210 is effective in treating Social Anxiety Disorder, as the drug is a “selective negative allosteric modulator of the α7 nicotinic acetylcholine receptor”.

That’s Science for “it’s a sedative that works like popping a Xanax, but without making you sleepy or developing a craving to eat tons and tons more Xanax every day for the rest of your life”.

The sudden spike in volume and price before there was any mention at all to the market that there are even results on the way might have caught the eye of market watchdogs, though.

Walkabout Resources (ASX:WKT) is up 18.1% on news that the remainder of its EPC contract (excluding the performance milestones) with Chinese company Jinping will be settled by issuing shares and options.

It’s the final piece in the puzzle for Walkabout’s Lindi Jumbo project, and will see the remaining critical equipment on a boat out of China much sooner than if WKT was being held to making cash payments.

And last but not least, Mesoblast (ASX:MSB) has announced that the United States Food and Drug Administration’s (FDA) Office of Therapeutic Products (OTP) has accepted the its Biologics License Application (BLA) resubmission for remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease.

“Over the last two years we have worked tirelessly to address the issues previously raised by FDA,” Mesoblast chief executive Silviu Itescu said.

“We look forward to working closely with the Agency over the review period with the aim to make remestemcel-L available as a therapy for children suffering from SR-aGVHD.”

The market’s certainly taken an interest in the matter, with Mesoblast enjoying a 15.7% rise for the day.

 

ASX SMALL CAP LAGGARDS

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LAST ORDERS

Nuheara (ASX:NUH) has announced the completion of a successful $3 million placement (before costs), to sophisticated and professional investors, at $0.17 per share – which includes $600,000 (a full 20% of the offer) from existing shareholder, and strategic investor, Realtek.

“WE ARE DELIGHTED WITH THE SUPPORT FOR THE PLACEMENT WITH A NUMBER OF NEW INVESTORS INTRODUCED TO THE REGISTER,” managing director and co-founder, Justin Miller, bellowed. “ON BEHALF OF THE BOARD OF DIRECTORS, I WOULD ALSO LIKE TO THANK OUR EXISTING SHAREHOLDERS FOR THEIR ONGOING SUPPORT.”

Nuheara says the funds will provide the working capital needed to increase production of its US FDA-approved over-the-counter hearing aids in the United States.

Meanwhile, King River Resources (ASX:KRR) has torn the covers off its plans for the future, with cash in the company’s pocket from the sale of its Speewah project to Tivan (ASX:TVN) last month earmarked for an “aggressive $1.25M geophysical exploration programme”.

KRR is currently sitting on more than 7,000km2 of holdings in the Tennant Creek and Barkly regions, where Tennant Minerals (ASX:TMS), Castile (ASX:CST) and Emmerson Resources (ASX:ERM) have provided solid enough results for consulting Nearologists to confirm the area’s worth having a dig around in.

King River’s own exploration has also confirmed the company that it’s on the right track, with rock chip grab samples up to 49.5g/t Au and gold drill results like 7m @ 6.35g/t Au including 2m @ 21.3g/t Au at its Kurundi project and newly received reconnaissance rock chip grab sample results up to 23.5g/t Au from its Tarragans prospect whetting the company’s appetite to find more.

 

TRADING HALTS

Carsales.com (ASX:CAR) – Fully underwritten accelerated pro-rata renounceable entitlement offer, with air-con, power steering, low kms. Serious Buyers Only. No Time Wasters.

Catalyst Metals (ASX:CYL) – Capital raisin, which sounds like a grape idea to me.

29Metals (ASX:29M) – News on the impact of heavy rainfalls on operations at the Capricorn Copper mine.

Bionomics (ASX:BNO) – Full results analysis from the PREVAIL Phase 2 Study of BNC210 are on the way.

 

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