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Wednesday, 1 March 2023

ASX Small Caps Lunch Wrap: Who’s managed to build a better mouse trap this morning?

by Berkeley Lovelace

Welp… it’s another Hump Day slump day for the ASX, after the benchmark went back into the red by 0.5% right at the start of the day.

However, like a lazy man in a training montage, it got better – thanks to some ABS data that blew the wind up the kilts of investors, bringing smiles to the faces of everyone who didn’t actually see that occur, and getting the benchmark back to flat, which is actually a lot better than it sounds.

And speaking of drastic reactions – or more accurately, overreactions – today’s headline news comes all the way from the grand old US state of Florida, the spiritual home of alligators and the largest collection of terminally stupid criminals.

It’s also the spiritual home of Disney, a company famous for the giant cartoon mouse that turned a raging anti-Semite into a preposterously wealthy household name, and spawned several massive theme parks.

That includes its largest attraction, Disney World – a sprawling 42ha monument to corporate greed that houses rollercoasters, terrified children and hundreds of very stoned college students in character costumes that stink of weed and desperation.

It’s the Happiest Place on Earth.

Anyway – Disney shares fell 1% overnight, after Florida Governor Ron DeSantis signed a bill granting him power over the self-governing zone, known as Reedy Creek Improvement District, on which Disney World is located and has controlled since the 1960s.

The Reedy Creek Improvement District essentially gave Disney its own 101km2 fiefdom within the state boundaries, which granted the Disney corporation all of the powers of a local county government, with very few of the checks and balances that usually come with it.

It’s like putting Coca Cola in charge of Cairns, or Hancock in charge of most of WA.

Anyway, Disney’s self-governing utopia is about to be razed to the ground, after Ron “Absolutely, 100% Not A Fascist Lunatic” DeSantis pushed a bill through the state legislature, handing control of the district back to the Florida state government.

The move by DeSantis is – despite his recent claims to the contrary – quite clearly a response to Disney’s opposition to the governor’s hugely controversial “Don’t Say Gay” bill.

It’s a bill which, in the words of Louisiana Republican Representative Mike Johnson, aims to counter “the Democrat Party and their cultural allies’ … misguided crusade to immerse young children in sexual imagery and radical gender ideology” – by outlawing any discussion of those topics in the states schools for kids between the ages of about 5-9, or thereabouts.

It’s also one of the most epic political temper tantrums the US has ever seen – and arguably quite terrifying considering that DeSantis is currently shaping up to make a run for the US Presidency in 2024.

That’s a race that has the Anti-Mousketeer on a collision course with former US President Donald “Very Stable Genius” Trump, and the irrepressible stupidity of Marjorie “Jewish Space Lasers” Taylor-Greene.

That is going to be a wild, wild ride – far better than anything that a trip to Disney World could offer.

 

TO MARKETS

Aussie markets have tracked Wall Street lower this morning, falling 0.5% within half an hour of opening, but a data drop from the Australian Bureau of Counting Stuff mid-morning has pretty much saved the day.

The ABS released its inflation figures for January, showing the nation’s monthly consumer price index (CPI) rose 7.4% in the year to January – a slowdown that is well below the 8.0% prediction that had numerous people screaming about how the sky was falling down.

The news was like a shot in the arm from a Russian weightlifting coach, and saw the benchmark lift +0.3% in about five minutes as investors felt the muscular rush of some happy CPI data for a change.

The ABS also said “prices excluding volatile fruit, vegetables and fuel, rose 7.2% in the year to January”, which is down from 8.1% in December.

The numbers are great, and while I don’t know what “volatile fruit” is, it sounds like it could be an enormous amount of fun to go clubbing with.

At the fancy end of the grown-ups table, Weebit Nano (ASX:WBT) is back to its winning ways again, up 5.1% after the company delivered a Powerpoint presentation to a few folks during its US Roadshow.

And Arafura Rare Earths (ASX:ARU) has bounced 6.7% this morning, shaking out some of the cobwebs after suffering at the mercy of the market over the past week, which saw it fall around 15%.

 

NOT THE ASX

It was a bit of a wild ride for a few Big Names on Wall Street overnight, but the session ended with the major indices marginally lower. The Dow dropped furthest by 0.71%, the S%P fell 0.3 and the Nasdaq was about as flat as an overused 90s-era NiCad battery, at -0.10%.

Earlybird Eddy reports that a few individual shares took a hit for odd reasons – most notably Tesla’s 1.0% dip after Mexican president Andrés Manuel López Obrador took a break from making himself look like an idiot on Twitter to announce that Elon’s EV company will be setting up a factory South of the Border.

It’s unclear whether that dip is directly related to investor concerns over build quality from Mexican automotive plants, where some of the world’s largest carmakers have already set up shop.

But if the number of random bits that came off the Mexican-built Ford Fiesta I borrowed last time I was Stateside is any indication, a Mexican Tesla factory could turn out to be something of a boon for anyone who needs random spare bits of Tesla from time to time.

In Japan, the Nikkei has fallen on news that Japanese schools are foregoing expensive field trips for students to learn Japanese culture and history, and are instead having children visit historic sites that have been recreated in Minecraft.

While that may indeed save a few yen that could be spent on upgrades to the schools’ facilities, it is only a matter of time before scores of children are virtually murdered by the Ender Dragon, or the historic sites themselves are destroyed by Creepers.

And in crypto news, it’s been a soggy old 24 hours for the majors, with BTC dropping around 1.2% because it did. ETH is down by the same amount because someone’s mouse ran out of batteries, and a bunch of other coins fell as it was the fashion at the time.

The big news this morning in cryptoland is the story of a pro Fortnite player winning an inane “monkey running through a sewer” gaming competition, collecting a prize of a JPG of a key, and selling it to a billionaire for $1.6 million.

I’ve got two kids, and it’s already nigh-on impossible to peel them away from their gaming devices – and sh-t like this is both heartbreaking and rage inducing.

I’ve done my best to explain to my kids that their dream of making millions by getting really, really good at Elden Ring have less chance of working out than I do of ever working out in a gym – precisely 0%, because gyms are stinky and dumb.

There, I said it.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for February 20 [intraday]:

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

 

In the Glorious World of Small Caps, Rewardle Holdings (ASX:RXH) is topping the ladder after a spike in interest saw its trading price jump 28.6% since open. There’s no particular reason for it, but today’s volume is about 28 times the four-week average, so something’s happening – if I find out, I’ll tell you later this arvo in Closing Bell.

The Tassie tinnies at Stellar Resources (ASX:SRZ) are in second place, up 20% on no news and razor-thin volume, but right behind Stellar is Mayne Pharma (ASX:MYX), having another belter and building on its recent success by adding 19.9% before lunch.

Mayne Pharma’s jump has come in the wake of the board’s decision to cancel a proposed capital return to shareholders, which Mayne Pharma chairman Frank Condella has acknowledged as a potential disappointment to shareholders, but notes that the company is “a significantly different business today with a clear strategy to drive accretive growth”, and is “confident that the successful execution of our strategy will see a return to profitability and restoration of value which is expected to drive future returns for our shareholders”.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for March 1 [intraday]:

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

The post ASX Small Caps Lunch Wrap: Who’s managed to build a better mouse trap this morning? appeared first on Stockhead.

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