Weekly Small Caps and IPO Wrap: Negging the US economy won’t make it pick up, Mr Powell. 

• ASX 200 down 1.5% for the week because digging stuff up is suddenly ‘not cool’.
• XEC Emerging Companies index was pretty much the same, which is just lazy, really.
• US Fed chair put the highly-contagious Fear of God (and recession) into US markets. Again.

That was not a great week. But there’s always another one.

It started with a whimper, sobbed a few times and then ended with the ASX having a dialled-up-to-11, purple-faced tantrum as 1.5% of the market’s lollies were casually shoplifted by Fear and Uncertainty.

We’ll get into the hows and whys shortly, but first a quick dive into the stats to better understand what went wrong.

Hyperbole aside it wasn’t a total disaster unless everything you own is in energy. On the unlikely but possible side, if everything about you is about the Aussie Tech sector, there’ll be 2.7% more of you for than there was this time last Friday.

Consumer Discretionary also did pretty well, up by 2.3%. But if anyone here is ALL Myer and Peter Alexander, I’ll eat my beanie.

But, in a very familiar refrain, our beleaguered Materials and Energy sectors really did have a horrible time.

Energy fell more than 6.1% in a week that saw oil prices plummeting 4% and coal prices by 2% in the wake of comments by US Fed chair Jerome Powell to Congress on Tuesday night, our time.

And the Materials sector is off by around 5.0% for the week, as risk appetite evaporated and investors began to look elsewhere for their hit of dopamine gains.

Lithium stocks took a beating throughout the week, and today was more of the same, with the likes of Allkem (ASX:AKE) and Pilbara Minerals (ASX:PLS) falling by over 6%.

WHAT MADE THE WEEK 

Loose lips sinking the ship, that’s what – and, as always, US Fed chair Jerome Powell’s flappers deserve a large chunk of the blame, because whenever he talks, things tend to go sideways at the moment.

Here’s how it went down.

So. There’s a certain subset of fellas who like to think of themselves as real “Players”, because they’ve learned all the tips and tricks of how to pick up women using tactics probably best described as “nauseating”.

One of those tactics is called “Negging”, and it works (in theory) by basically cornering a woman in a bar, and relentlessly shit-talking her right to her face, with the aim of lowering her self esteem to the point where she begins to believe that whoever is negging her is as good of an option she’s going to get.

It’s gross and pathetic and I think maaaaybe that’s what Powell’s been trying with all of his relentless Scary Talk about interest rate hikes and recession fears.

Old mate is negging the economy, in the hope it’ll pick up.

(Spoiler alert: Powell’s stopping – alone – for a kebab on his way home. I guarantee it.)

If he’s not doing that then we are, all of us, in a bit of a pickle because the constant barrage of US Fed threats, and promises that in terms of interest rate hikes, there’s plenty more where that came from is  hitting Wall Street pretty hard, and it’s wobbling things locally, too.

There was a ray of hope for some in the US, after President Joe Biden unveiled plans to ratchet up taxation on a bunch of stuff that will only affect rich people, which – of course – has sent a certain percentage of the Absolutely Not Wealthy American public into paroxysms of impotent fury.

Biden’s got precisely zero chance of getting the whole package through both the House and the Senate, making much of the announcement little more than boring, old-person theatrics – but the optics are important ahead of next year’s presidential elections.

Speaking of elections, it’s been a rocky week in China news as well, with the now totally-expected quantity of hyperbolic sabre-rattling from the CCP’s Central Party meeting drawing to an enormous crescendo as Xi Jinping was installed for a record-breaking third term of President for Life.

Locally, it was a lot of talk about interest rates and such, following the very well documented rate hike here in Australia by the RBA board on Tuesday.

The main difference between our local rate rises and those in the US is that our guy seems to be a lot more positive in his outlook, which has the market on the fence about who to believe.

For the moment, though, today’s performance is a fair indication that if the US is gonna keep wobbling, then we’re in for a wobbly old ride as well.

Sucks, but it is what it is.

Elsewhere, in Martin Place to be specific, here’s what went down: The central bank met for about 30 seconds and lifted rates by another 25 basis points. That was a surprise, said no one.

In Large Cap news, Gold Road Resources (ASX:GOR) was the actual surprise winner for the week, because it had absolutely nothing to report but still rose more than 3.0%, most of that in one day. That sums up the whole week quite well, actually – we can file the whole under “B” for Baffling.

Hardest hit was Harvey Norman (ASX:HVN), after a -8.65% bloodletting left the retailer in search of a beefed up washer and dryer, and probably a fresh mattress, after soiling the bed so comprehensively.

ASX SMALL CAP LEADERS

Here are the best performing ASX small cap stocks from 03 – 10 Mar:

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

There were three solid stand-outs for the week among the Small Caps, starting with Mindax (ASX:MDX), back in action on the ASX, after a very lengthy period of time wandering the wilderness in self-imposed exile while trying to sort through a few issues and just, you know, get its head together, man.

Mindax went dark in February 2022, and has been quietly beavering away at its Mt Forest iron project, after some protracted back’n’forth with JV partner Norton Gold Fields which needed to be cleared up before MDX could trade again.

It all appears to have been concluded in a manner deemed pleasing to the ASX, MDX went live again and has topped the charts for the week, with a near-perfect 98% gain. Bravissimo!

RooLife Group (ASX:RLG) has also had an absolute belter, on news that it’s inked a deal for stocking and distribution for its Remedy Drinks line into Alibaba’s 300 high-tech Freshippo supermarkets and stores in China.

RLG said Freshippo has converged online and offline activities by using retail stores not just to sell to consumers, but also fulfil online orders, in addition to offering an immersive and fun experience to customers who shop in-store.

Australian brand Remedy Drinks are makers of no-sugar, low calorie, live cultured, organic drinks including Kombucha, which Freshippo will sell online through its official app and also offline through its over 300 brick-and-mortar stores located in 27 cities across China.

And last one on the Honourable Mentions list is Prescient Therapeutics (ASX:PTX), which has stacked on a very healthy 53% this week 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.

ASX SMALL CAP LAGGARDS

Here are the best performing ASX small cap stocks from 03 – 10 Mar:

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

ASX IPOs this week:

There were none that I can think of right now, but If I’m wrong, you can shoot me an email and I’ll tell you how sorry I am.

But that’s it from us for this week. Join us on Monday for the next exciting round of “Where the hell’s all my super gone?”, the amazing new game show that’s utterly terrifying for the whole family.