Market Highlights: US economy refuses to slow down, ASX cautious ahead of CPI, and 5 small caps to watch

ASX to open lower on Monday despite a modest rally in New York
Stronger-than-expected jobs data in the US cast doubt on Fed pivot
Gold miner Endeavour Mining’s CEO ousted after misconduct

Aussie shares are poised to open lower to start the week, ahead of the crucial November inflation data Wednesday. At 8am AEDT, the ASX 200 index futures was pointing down by -0.04%.

On Friday, the S&P 500 rose modestly by +0.18%. The blue chips Dow Jones index was up by +0.07%, and the tech-heavy Nasdaq lifted by +0.1%.

US stocks ended higher after a stronger-than-expected jobs data showed that the US economy added 216,000 jobs last month, more than the 170,000 economists expected. The data has cast doubt on the timing of the Fed Reserve’s interest rates cutting.

“The US jobs data affords the Fed plenty of flexibility to delay cutting rates early in 2024,” said BMO Capital’s Ian Lyngen.

To stocks, shipping company Maersk was down -1% after announcing that it will divert its ships from the Red Sea/Gulf of Aden route for the ‘foreseeable future’ following attacks.

Exercise equipment stock Peloton surged almost 10% after announcing a partnership with TikTok where Peloton content will be featured on a dedicated fitness hub on the platform.

In London, gold miner Endeavour Mining PLC fell -7% after sacking CEO Sébastien de Montessus who faced allegations over misconduct and ‘irregular payment of $5.9m’  instructed by himself in relation to an asset disposal.

Top 10 shorted stocks in US

Investors stepped into 2024 with some caution at the start of the year, fuelled largely by uncertainty over the pace and timing of potential central banks’ pivots.

As the month January rolls on, here are the Top 10 most shorted stocks across the US’s S&P 500 and Russell 2000 over 2023.

The data is calculated by using “shares outstanding/on loan (SOOL)” data from S&P Global Market Intelligence.

Source: S&P Global Market Intelligence

In other markets …

Gold price rose by +0.11% to US$2,045.44 an ounce.

Oil prices climbed by over +2%, with Brent now trading at US$78.82 a barrel.

The benchmark 10-year US Treasury yield climbed 5 basis points (bond prices lower) to 4.0475%.

Iron ore futures fell almost -2% to US$138.65 a tonne.

The Aussie dollar climbed +025% to US67.28c. The AUD could be tested by inflation data this week after rallying around 10% against the greenback from October.

Meanwhile, Bitcoin recovered by +0.85% in the last 24 hours to US$44,270.

5 ASX small caps to watch today

Biome Australia (ASX:BIO)
The microbiome health company has upgraded its full year revenue guidance from $11.5m announced in October to $12.5m, due to a better than expected first half. This new target represents 74% growth versus the previous financial year. Sales have been led by its Activated Probiotics in the Australian pharmacy and practitioner markets. Based on analysis of past sales data and upcoming initiatives, the company expects strong sales growth to continue.

Acusensus (ASX:ACE)
The road safety tech company has signed a new 5-plus year contract with the South Australian government for the provision of fixed mobile phone detection camera installations using Acusensus’ ‘Heads-Up’ solutions. This was the seventh major contract for Acusensus, which is expected to generate $5m over the initial term.

Australasian Metals (ASX:A8G)
Field investigation and sampling has identified epithermal veining similar to that seen at the Retro Extended prospect. 20 of the 37 rock samples recently collected were anomalous in Pb (including 2.86% and 1.37% Pb), Cu, Mo, Zn and Mn from surface. The anomalous base metal geochemistry was also supported by anomalous Th, U, V, Sr, Sn, Ba, As, plus Ag and minor Au, over an area of some 1.5km length (roughly east-west) by 0.25km width.

Red 5 (ASX:RED)
It’s been another consistent quarter for gold producer Red 5, with 53koz produced and a combined cash and bullion building to $53m, while net debt was reduced to less than $50m at 31 December. Red 5 owns the King of the Hills Gold Project, located in the Eastern Goldfields region of WA. All three mines (KOTH open pit, KOTH underground and Darlot underground) continue to perform well for the quarter, delivering the expected tonnes and grade.

Provaris Energy (ASX:PV1)
Provaris announced the engagement of leading classification society DNV to apply its expertise towards the review and approval of Provaris’ H2Neo carrier’s proprietary hydrogen cargo containment system, the Prototype Tank. Provaris said it will commence the construction and testing of a Prototype Tank in Q1 this year. The company also said new revenue opportunity for the sale of small-scale tanks is now under development for late CY 2024.

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