Market Highlights: Energy stocks in focus as oil prices jump; 5 ASX small caps to watch on Tuesday

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  • The ASX 200 index is set to open higher this morning
  • Wall Street fell for third consecutive day
  • Oil prices jumped 4% overnight

Local shares are set to open higher today. At 8am AEST, the ASX 200 September futures contract is pointing up by 0.15%.

Overnight, Wall Street fell for the third consecutive day – the S&P 500 was down by 0.67%, the Dow Jones by 0.57%, and tech-heavy Nasdaq by 1.02%.

US Treasury yields edged up as bonds extended their selloff following Fed chairman Jerome Powell’s remarks on Friday that there won’t be a Fed pivot anytime soon.

The 10-year yield edged 8bp higher, while the 2-year yield rose 4bp sending most tech stocks tumbling.

In company news, Bristol Myers Squibb slumped 6% after its blood thinner candidate, milvexian, missed the end point target in its Phase 2 trial.

Meanwhile in Europe, the ECB will hand down its interest rates decision on Thursday (Euro time), and EU Commissioner Ursula von der Leyen is preparing an emergency intervention of the electricity market.

“Drastic measures are needed to salvage the European economy as the risks of extremely higher energy costs could trigger a severe recession,” said Oanda analyst, Edward Moya.

Oil prices jumped 4% higher overnight on prospect that OPEC+ would cut its production, in addition to the unrest in Libya over the weekend that could slide into a full blown conflict and also disrupt oil production.

“The one trade that everyone can agree upon is that the oil market will likely remain tight,” said Moya.

“What is also helping oil today is that despite risk aversion running wild, the dollar rally is on hold.”

The US dollar spiked to a 2-year high against a basket of major currencies following Powell’s speech, but has since settled lower.

Gold was heading down below US$1,700, but is now starting to show some resilience at US$1,737 /ounce level.

Meanwhile, a creditor of the failed Japan-based crypto exchange Mt Gox tweeted that rumours 140,000 BTC would be released to creditors immediately and flood the market were a hoax.

The tweet sent BTC to edge back up above US$20k, and at 8.30am AEST, it was trading at US$20,210.

Looking ahead today, the ABS will release the building approvals data for July.

5 ASX small caps to watch today

Airtasker (ASX:ART)
FY22 GMV (gross merchant value) was up 23.8% on prior year to $189.6 million. FY22 revenue was up 18.4% on prior year to $31.5 million. Airtasker is well capitalised with $31.8m cash and liquid assets as of June 30. No outlook guidance was given.

Bubs Australia (ASX:BUB)
Bubs reported record gross revenue for FY22 of $104.2m, up 123% on pcp. Underlying EBITDA was a profit of $4.8 million. Bubs said it will focus on margin accretion and earnings growth in FY23, underpinned by sales of infant formula in the US.

SILK Laser (ASX:SLA)
The non-surgical aesthetic services franchise reported revenue increase in FY22 of 38% to $81.3 million. Bottom line statutory NPAT was up 24% to $6.4 million. SILK has a solid balance sheet with cash of $18.6 million, and net debt of $3.8 million. Looking ahead, SILK says it will continue to evaluate both organic growth and various M&A opportunities.

Askari Metals (ASX:AS2)
Field mapping and sampling reconnaissance exploration program has commenced at South Central Barrow Creek Lithium Project in the Northern Territory. The field program is designed to identify and sample outcropping pegmatites in the previously unexplored south central portion.

IperionX (ASX:IPX)
IperionX and Panerai, a maison of Richemont, have signed a commercial partnership agreement to produce luxury, sustainable, Panerai watches using IperionX’s titanium. The partnership agreement represents a significant milestone for IperionX in the fast growing, $236 billion global luxury goods market, which is focused on securing low carbon, fully circular and closed loop materials.

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