• The ASX was 0.3% higher on Friday at 2.30pm (Sydney), up 0.5% this week
  • We’re still watching the Fed kinda fight inflation and we will be next week too
  • WA1 struggles to weak 120% gain this week

The benchmark was ahead by 0.5% this week, the S&P/ASX Emerging Companies (XEC) index was up by 0.4% on Friday, but down 1% for the five sessions to 2.30pm today in Sydney.

This week we checked in with Immortan Joe – formerly known as Colonel Joe Moore – for his take on the latest move by The Board of Governors of the US Federal Reserve, led by Chair Jerome Powell and responsible for the discount rate and reserve requirements, and the Federal Open Market Committee (FOMC) which is responsible for day-to-day open market operations.

On Wednesday, after a two-day policy meeting, the Federal Open Market Committee approved a fourth consecutive rate hike of three-quarters of a percentage point or 75 basis points in further attempts to deal with the inflationary pressures  knocking holes in the US economy.

That brought the US central bank’s benchmark lending rate to a new target range of 3.75% to 4% – the highest the Fed funds rate has been since 2008.

Talking to Stockhead during an ultimately futile attempt to retrieve his ‘treasures’, Joe said, of the latest hike:

 

mediocre asx 200

Controversy aside, the move was perhaps not unforseen as a raft of indications really did light the path ahead, so Wall Street’s late session collapse was, again in the words of Immortan Joe:

Via Giphy

 

Then the Chair came out to start making pretty obvious hints of continued, albeit smaller, hikes in upcoming meetings. That’s why he called this press conference…

…aimed at preventing a “very premature” pause in whacking US  inflation.

Post-press briefing, a furious Immortan Joe contacted Stockhead saying:

 

Fed Chair Jerome Powell’s emphasis on incoming data guiding the central bank in further tightening also doubled down on the importance of inflation numbers in determining how long the FOMC will be burning inflation on Fury Road.

Meantime, analysts at Barclays Bank have cut their expectations for Chinese GDP heading into next year. Its new 2023 China GDP forecast of 3.8% comes after cutting it to 4.5% in September on China’s flailing property sector.

The latest trim comes on an expected drop in demand for Chinese exports and further expectations of a 10% decline in real estate investment.

As Immortan Joe says:

‘Mediocre’ in nicely written caligraphy. Via Getty

 

Next week …

Next week’s consumer price index (CPI) data will therefore be of key importance with any deviation from the consensus potentially market moving. Ye Gads! T’is but another busy week ahead for economic action ahead then. The focus of traders will again be drawn to inflationary indicators – both the US and China will offer up some insights into how much prices grew during October.

In China, we’ll also be looking closely at how October trade figures come in. The Poms meanwhile release their Q3 GDP figures, which are certain to be unTrussworthy, while German industrial production isn’t The Weimar Republic, but expectations are not sky high.

The S&P Global Investment Managers Index will also shed a little light on money managers’ POVs on Wall Street and what’s moving US equity markets.

Outside of the States, UK monthly output figures will capture the market’s attention following a period of heightened volatility for the British pound. While the PMI data alluded to the potential for a third quarter contraction, official data will be watched for the extent of deterioration. Meanwhile China’s inflation and trade data will further outline the extent to which lingering Covid-19 restrictions have affected economic conditions.

A series of central bankers’ appearances, including those from the US Federal Reserve, will be watched intently after this week’s Fed FOMC meeting.

At home, Kristina Clifton at CBA says the week ahead will be a slower one with sentiment data and a speech by RBA Deputy Governor Bullock the highlight.

“On Tuesday we expect the Westpac/Melbourne Institute consumer sentiment measure to remain in deeply pessimistic territory. (It fell by 0.9% in October and the weekly ANZ Roy Morgan survey has also shown recent weakness.) The NAB business survey is also released the same day and has shown considerable resilience in recent months.

“We could see this continue in October given the lags in monetary policy transmission. The pricing measures in the survey will also be closely watched given inflationary pressures in the Australian economy,” Clifton added.

CommBank releases its Household Spending Intentions Index for October next week as well.

ASX IPOs ahead in November:

Taiton Resources (ASX:T88)

IPO: $10m at $0.20

Taiton’s delayed IPO features projects that include the Lake Barlee gold project in WA, the Highway polymetallic project in SA, and the Challenger West gold project also in SA.

The company believes its dominant land holding at the Highway Project will allow it to potentially uncover the next elephant deposit in Australia.

Taiton will be undergoing a series of grassroots exploration and also several walk-up drilling targets.

 

Tiger Tasman Minerals (ASX:T1G)

Listing: 14 November

IPO: $8m at $0.20

Tiger Tasman Minerals has projects in WA and QLD focused on copper, lithium, nickel, manganese, silver, gold, base metals and industrial minerals (DMM) essential to the global clean energy transition, decarbonisation and a more sustainable future. 

The projects are in proven and prospective jurisdictions including Paterson Province, Fraser Range, Earaheedy Basin, Ashburton and the Townsville region.

The Iron Skarn silver-copper-lead-zinc project (QLD), the Copper Canyon copper-gold project (WA), the Fraser Range lithium-nickel-copper project (WA), the Mt Minnie manganese project (WA) and the Crater copper-zinc-lead-silver-gold project (WA).

 

Nightingale Intelligent Systems (ASX:NGL)

Listing: 15 November 

IPO: $6m at $0.22

This company develops and sells Unmanned Aerial Vehicles (UAVs) or drones for commercial applications – and there’s a bunch of them.

NGL says its tech has applications across solar farms, ports, O&G facilities, critical infrastructure like dams and power stations, in construction, border patrol, securing pipelines, fire and oil spills along with search and rescue, crowd control and for prisons.

Basically, the drones can respond to a threat; when a security alarm is triggered the system automatically dispatches a drone to the alarm location and streams live video to the security team.

 

DeSoto Resources (ASX:DES)

Listing: 15 November

IPO: $12m at $0.20

DeSoto holds the Pine Creek project in the Northern Territory’s prolific Pine Creek gold and pegmatite province.

The company’s six granted licences will cover 1,467km2 and three licence applications cover 420km2. 

Historical drilling has identified gold mineralisation hosted but there has been no lithium exploration conducted in the Project area – which DeSoto sees as a “significant” opportunity.

It also takes encouragement from the fact that Core Lithium (ASX:CXO) recently acquired ground adjacent to the Pine Creek Project and is now exploring for lithium across the Project area.

 

Toubani Resources (ASX:TRE)

Listing: 16 November

IPO: $32.5m at $0.20

This resources player is focused on developing a gold platform in West Africa.

The company is primarily focused on the development of the Kobada Gold Project in Southern Mali, which has a global resource base of over 2.3 Moz of gold and the potential to produce more than 100,000 ounces of gold per annum.

 

Source Certain International (ASX:SC1)

Listing: 16 November

IPO: $7m at $0.20

SC1 provides a scientific provenance verification service for agriculture, seafood, mining and resource sectors.

SC1 says scientific analysis of physical product samples allows clients to mitigate risk, validate digital data, protect their brand and support transparency within their supply chains.

The company’s origin verification solution is able to identify the mine, farm, fishery or plantation from which a product originated. 

 

Lightning Minerals (ASX:L1M)

Listing: 22 November

IPO: $7m at $0.20

This explorer is focused on high-demand battery minerals including lithium, nickel, cobalt, copper and PGEs, with four project areas in WA.

Its main focus are the Dundas licences – in particular the Dundas South project whichis in close proximity to Alliance Mineral Assets’ (ASX:A40) Bald Hill lithium and tantalum project, Greenstone Resources’ (ASX:GSR) Mt Thirsty cobalt-nickel project and Liontown Resources’ (ASX:LTR) Buldania/Anna lithium project.

 

Orpheus Minerals (ASX:ORP)

Listing: 29 November

IPO: $6m at $0.20

Orpheus was established to explore for and discover greenfield uranium deposits in South Australia and the Northern Territory at economic grade and scale. 

And the focus is exploring around approved and operating (or recently operating) uranium mines because these are also the jurisdictions considered to have high prospectivity for economic uranium deposits and have the regulatory systems at both state and federal level supportive of the development of new uranium mines.

They have four projects in the NT – Woolner, Ranger North-East, Mt Douglas and T-bone – and two projects in SA – Frome and Cummins.

 

ASX SMALL CAP LEADERS:

Here are the best performing ASX small cap stocks for October 31 – November 4:

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For your consideration: WA1 Resources (ASX:WA1)

The once $3m market cap minnow just keeps stealing all the nice words after clocking niobium-rare earths paydirt in its first hole at the P2 target, part of the West Arunta project in remote Mad Max-like WA.

As the most unmediocre Emma Davies says, niobium is mainly used to make steel better, but also has growing uses in lithium-ion batteries, intelligent glass, solar panels, 5G tech, and nuclear energy.

Ferroniobium metal (65% Nb) currently sells for ~US$45,000/t.

AW1 congratulations:

WA1 pulled up 54m at 0.62% niobium, 0.18% rare earths and 3.85% phosphorus from 162m. The 216m-long hole ended in 2m at 1.22% Nb2O5, 0.22% TREO, and 5.73% P2O5.

On Thursday morning WA1 hit $2.70 and then plummeted to $1.42 by close and is currently back up rocketing away.

All up, the company’s share price is up an astounding 1,353% which is interesting because its shares are tightly held – with only ~44m shares on issue and of that about 41% are held by management and major shareholder Tali. On November 10, some 1.5m of those tightly held WA1 shares will be released from escrow, so it should be interesting to see if those holders cash in.

WA1’s market cap is now at $67m.

ASX SMALL CAP LAGGARDS:

Here are the least performing ASX small cap stocks for October 31 – November 4:

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