• The ASX is set to rise on Friday after a late rally on Wall Street overnight
  • Chipmaker Nvidia jumped 14% after saying it will focus on AI chips
  • US economy grew less than expected, stoking fears of a recession

 

Aussie shares are set to open flat this morning after a late session comeback in New York overnight.

Wall Street was on its way to a fifth straight day of decline before an afternoon rally saw all major indexes finishing in positive territories.

At the close of the day, the S&P 500 was up by 0.59%, the Dow by 0.36%, and tech heavy Nasdaq by 0.76%.

Stocks got a boost after Nvidia delivered a robust outlook on the back of rising demand for artificial intelligence processors. The Nvdia stock price surged 14%.

Netflix slipped 3% after lowering the price of subscriptions in over 100 lower-income countries. Nikola Corp sank 5% after reporting wide misses on revenue and vehicle deliveries in the last quarter.

But overall, the mood overnight seems to be buoyant as traders become confident the Fed’s rate hiking campaign will be over after two or three more hikes following a weak GDP readout.

The Q4 GDP showed the US economy grew by only 2.7%, lower than the forecast of 2.9%.

“Rate traders are coming to agreement that the Fed will raise rates by 25bps in March and May, with a growing chance that will also happen in June,” said OANDA analyst, Edward Moya.

“With the Fed likely to deliver a few more rate increases, recession odds should be surging here.”

To commodities, the London Metal Exchange (LME) said it will reopen nickel trading during Asian trading hours from March 20th.

In March last year, the LME halted nickel trading for a week after a short squeeze play by top producer Tsingshan Holding.

Iron ore was down -0.3% to $US129.65 a tonne, while Brent crude finally rose by 2.5% after a week of weak trading.

“It looks like oil has been beaten up enough. It doesn’t seem like recession risks will feel real until closer to the summer,” said Moya.

Bitcoin was up 0.5% in the last 24 hours to US$23,965.

The IMF has released a 1,131-word white paper on elements of effective policies for crypto assets.  The paper outlined what they’re focusing on including: protecting fiat currencies, excessive capital flow volatility, and joint monitoring across regions.

Back home, new research from Australia Institute economist Dr Jim Stanford said that excessive corporate profits are the main driver of inflation, not wages.

The research findings came as Qantas announced a $1.4 billion profit, Commonwealth Bank announcing a record $5.15 billion profit, and Woolworths revealing a $907 million profit.

“Inflation would have stayed within the Reserve Bank of Australia’s target band had companies not pumped up prices and squeezed consumers over the past 18 months,” Dr Stanford’s research finds.

Looking ahead to today, earnings season continues and companies to report their results today include: Pilbara Minerals, Allkem, MinRes, and Austal.

 

5 ASX small caps to watch today

Jumbo Interactive (ASX:JIN)
Revenue for the first half was up up 18% on pcp to $62.4 million. Underlying NPATA was up 8% to $18.2 million. The Lottery Retailing business delivered TTV growth of 8% and revenue growth of 7%. During the half, Jumbo’s platform delivered 100% uptime for the $160 million Powerball and a several records broken in terms of signups, checkouts and tickets sold per second.

Selfwealth (ASX:SWF)
The company delivered record revenue for the half, which increased by 45% on pcp to $14.5m. EBITDA increased to $2.5m, up from an operating loss of $2.3m in the pcp. Positive operating cash flow of $591k represents a significant turnaround from the cash out flow of $2.1m in the pcp.

Ardent Leisure (ASX:ALG)
Consolidated NPAT was $669.5 million compared to a $36.8 million loss in the prior period. Theme Parks & Attractions operating revenue was $43.7 million, the highest in over six years, up 136.5% on the prior period. Ardent says it’s well capitalised to fund future investments which include over $50 million of new and upgraded rides and attractions.

Antipa Minerals (ASX:AZY)
Antipa has regained sole rights to, and operational control of, several high priority Wilki Project targets. In return, Newcrest will be entitled to a 1.5% net smelter royalty. Antipa’s 100% controlled land holding in WA’s Paterson Province has now been boosted to approximately 877km2 (previously 144km2). Newcrest holds a 9.9% equity interest in Antipa and is committed to the Wilki Project.

Damstra (ASX:DTC)
Damstra reported record revenue for the half of $14.9m, up 18% vs pcp. EBITDA was $2m with EBITA margin of 13.4%, compared to pcp’s EBITDA loss of $0.2m. Positive operating cash flow of $2.1m, versus negative $2.1m in the pcp.

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