Market Highlights: A 'sad' day in Europe, ASX to shed 1pc more, and 5 small caps to watch today

ASX will open lower on Monday in line with Wall Street
UBS acquires Credit Suisse in a ‘historic’ deal
The Fed is set to announce its rate decision this week

The ASX is set to open lower on Monday, tracking movements on Wall Street. At 7.30am AEDT, the ASX 200 April futures contract was pointing down by 1.25%.

On Friday, all major US indices fell around 1% as uncertainty around the banking crisis lowered confidence levels.

Concerns about the solvency of First Republic Bank, which fell another 33%, and other regional US banks continued to dent sentiment This was despite a US$30bn rescue deal orchestrated by the biggest US banks like JPMorgan a day earlier.

In Europe, a ‘historic’ deal saw UBS buying rival Swiss bank Credit Suisse (CS) for 3 billion Swiss francs (US$3.23 billion).

UBS to buy Credit Suisse

The acquisition was engineered by Swiss authorities and sealed over the weekend, winning support from central bankers keen to avoid further turmoil in the banking sector.

Axel Lehmann, chairman of Credit Suisse, described the day as “historic, sad and very challenging”.

“It is a historic, sad and very challenging day for Credit Suisse, for Switzerland and for the global financial markets,” Lehmann said.

He added the focus will now turn to the future of the 50,000 Credit Suisse employees, 17,000 of whom are in Switzerland.

“Given recent extraordinary and unprecedented circumstances however, the announced merger represents the best available outcome,” he said.

Credit Suisse, which started in 1856, has been hammered in recent years by a series of scandals, bad investments, blowups and leadership changes.

Without this deal, the market drama would continue to unfold with potential ramifications for the broader industry, analysts said.

What’s happening elsewhere

Google raised the price of its YouTube TV subscription by 12%. Other streaming services from Apple, Disney, and HBO have also raised prices recently.

Microsoft said it will include AI-powered assistants called Co-pilot in apps such as Excel and PowerPoint to help with busywork.

Oil prices lost 12% last week over fears the Fed is taking the economy gradually into a recession.

“Energy traders are not sure what could be the catalyst to send oil prices higher given all the doom and gloom happening with short-term crude demand outlooks” said Oanda analyst, Edward Moya.

Gold surged 3.5% to US$1,988.10 on Friday on the back of bank angst.

Bitcoin is also rallying on optimism that regulators are open to a big bank taking over the crypto parts of Signature Bank. BTC was up 3% in the last 24 hours to US$28,190.

This week’s economic diary includes the RBA Board March meeting minutes on Tuesday, and the Fed’s rates decision on Wednesday (US time).

5 ASX small caps to watch today

Sezzle Inc. (ASX:SZL)
Total income for February increased 29.1% YoY to US$10.7m. Sezzle achieved profitability in February, with Adjusted EBTDA increasing to a positive US$1.4M for the month. “Although it has only been two months, we are on schedule to deliver profitability in 2023,” says Charlie Youakim, Sezzle’s Chairman and CEO.

Invex Therapeutics (ASX:IXC)
Invex announced German authorities’ approval to commence the IIH EVOLVE Phase III clinical trial. In addition, Invex has secured Central Ethics Committee (CEC) approval for the trial. IIH EVOLVE will study 240 patients with newly diagnosed IIH (Idiopathic Intracranial Hypertension) to determine the efficacy and safety of lead drug Presendin versus placebo.

Appen (ASX:APX)
Appen announced the appointment of Saty Bahadur as its new Chief Technology Officer. Bahadur has 25 years of experience developing ground breaking technology, and is a highly respected expert in the AI field. He was the former CTO at Upwork Global.

Viridis Mining and Minerals (ASX:VMM)
Laboratory analysis of selected surface samples from the Smoky Project confirms presence of high grade Halloysite-bearing Kaolinite at the Smoky Project. Grab surface rock sample VK-094 contains 36.6% halloysite in the raw material. The findings represent the first confirmation of halloysite at the site, since the historical quarry activity in the 1980’s. Samples have now been sent to the James Hutton institute for formal assaying.

QuickFee (ASX:QFE)
Following the collapse of SVB, QuickFee says its ACH Pay Now payments are now processing as usual. Management do not expect there to be a material financial impact as a result of the temporary queueing of the company’s ACH payments. QuickFee’s Pay Now Card and Pay Later Financing operations in the US, and all Australian operations, were not affected by the SVB events.