Small Caps Lunch Wrap: ASX hits record high… We’re through the looking glass here, people

The local market has surged on Monday with all sectors in the green.

US futures are higher following the attack on former US president Donald Trump. Pic via Getty

Local markets are already jacked up in record-high, untrodden territory on Monday morning in Bridge Street, Sydney.

The S&P/ASX200 is up today, gaining 68.90 points or 0.87% to 8,028.20 and setting a new, new 100-day high with most sectors getting in on the action.

The top-performing stocks in the benchmark 200 ahead of lunch were both IT names – Nanosonics (ASX:NAN) and Block Inc (ASX:SQ2) , up 10.5% and 3.55% respectively.

By sectors, Consumer Discretionary, Information Technology and the Telcos are out in front, but the field is packed with winners.

IT stocks are up +2.6% since the rotation began out of mega tech in the US.

It is just a terribly good-looking Monday morning at the ASX graphics department, no matter how you cut it:

All 11 sectors are higher at lunch along with the benchmark, the All Ords and the array of indices across the ASX. Even the miners – who no one loves any more – are making good. (That lack of love could change if China does this week as the Third Plenum unfolds.)

It’s been a difficult 2024 for the materials sector, as recounted to me over the w'end by my Cornish collaborator and eToro's man of markets Joshua Gilbert.

"It's the worst-performing sector on the local market this year by far. Lithium miners have led the losses, but heavyweights Rio Tinto and BHP have dragged the sector lower with losses of 11% and 13%, respectively."

This all comes from the weaker iron ore price, which has tumbled following continued weakness out of Chinese – and, specifically – the slump in the property market.

Josh says the latest data showed that deflation is still a problem, and more support is needed from Beijing.

However, that weakness this year has sparked interest from contrarian investors…

"BHP (ASX:BHP) shares saw a 24% increase in holders in Q2, the third largest increase of any stock on the eToro platform in Australia. Both these mining heavyweights will hand down production updates this week, and increased production across all segments of the business will be what investors want to see to offset lower iron ore prices. But, a focus will be on copper, with prices rising by more than 15% this year, and both looking to increase production over the years ahead, with BHP’s recent bid for Anglo-American a clear testament to that."

Elsewhere, Aussie Broadband (ASX:ABB) stock is one of the few taking some stick after announcing there'll likely be some $10mn more spent on its new digital 'challenger brand' Buddy. That's overshadowed an update to forward guidance – with EDITDA likely to drop at the top end of its previous guidance of $116m to $121m, including four months of contribution from its lauded acquisition Symbio, which may have disappointed.

The stock was down over 18% ahead of the break.

Here's the heatmap of ASX sectors at lunch.

Look how all the heat has been sucked out of the heat map on Monday. It is an eerie joyful green which fills me with unbidden terror. The top of my right ear is itching.

These new records are "the undiscovered country from whose bourse no traveller returns", as per Hamlet, who was clever and poetic but also wrong about a lot of stuff.

For instance, there's the Aussie dollar – surging near eight month highs at US67.67c – and, this week, there's only really Thursday's jobless data drop from The Bureau (ABS) at home, or OFC, the Mega political, social and / or economic upheavals in Beijing or Washington to arrest more of The Best.

ASX 200 at 8,250 points – all over by Christmas

That's what David Bassanese, Betashares chief economist declared this morning.

"Being relatively cheap and unloved, the Australian market could become part of the ‘great rotation’ if global investors start to seek opportunities outside of US large cap technology stocks such as Nvidia," Bassanese mused.

Last week, small caps began to enjoy the benefits of that rotation. Materials and resources did not.

The ASX Small Ordinaries (XSO) index ended last week ahead by 2.8%, while the ASX Emerging Companies (XEC) index soared by 2.7%.

The S&P/ASX200 ended the previous session with a near 0.9% gain t close at 7,959.30, a new 100-day high after trimming intra-day gains which pushed through best evers.

Persistent domestic inflation will ensure the local punters continue to keep an eye on any monetary policy prognosticating from the Reserve Bank of Australia (RBA) as expectations Martin Pl. will come on behind its global peers most of whom look set to begin their rate-cutting cycles sooner rather than later.

That's been good for the Aussie dollar.

Importantly, Eddy Sunarto is back from the Japanese leg of his whirlwind North Asia tour and was on hand to witness the cracking new record highs that hit markets in Tokyo, to go with the fresh records here, in the States and even in Toronto.

The data highlight at home is jobless numbers on Thursday.

Elsewhere there'll be inflation reads in Toronto (yes, Toronto), the UK, New Zealand, and Japan, while trade data drops for India, the EU, Italy, Japan, and Switzerland.

As of lunchtime on Monday, the benchmark index has gained 2.6% and is currently 0.11% off of its 52-week high.on broad-based gains.

The ASX Small Ordinaries (XSO) index ended last week ahead by 2.8%, while the ASX Emerging Companies (XEC) index soared by 2.7%.

Not the ASX

Yes Toronto.

That's where the S&P/TSX Composite Index rose 0.7% to close at a record high of 22,674 on Friday, marking its 3rd straight session of gains, amid broad-based increases led by Canada's mining and materials sector.

In the states, Wall Street ended close to record levels on Friday, as earning season kicked off with the major banks in focus.

We saw a fascinating and probably healthy rotation away from Megatech to the unloved and long underperforming small caps and value shares – again – a result of  further buy-in confidence that the US Fed will begin to trim interest rates.

Wee caps outperformed in the US, as well, with the Russell 2000 surging 3.6% in the states, as your mega-tech names like Nvidia and Tesla faltered.

The S&P 500 gained 0.5%, after touching all-time high of the 5,655 level during the Friday session. The Nasdaq 100 also rose by 0.5%, rebounding from its worst day since April.

The Dow Jones jumped 247 point, ending beyond the 40,000 mark for only a second instance.

It last did that in May.

Now it has a US Q2 earnings season ahead of it with many of the majors likely to provide a timely insight into the state of the US economy at this thrilling juncture.

The big US banks started reporting on Friday.

JPMorgan dropped 1.2% even though it dumped higher-than-expected revenue driven by increased the return of investment banking business.

Citigroup stock dropped even further – almost down 2% – after it, too, cracked beyond revenue and profit forecasts.

Wells Fargo is a bit of an outlier, its stock crashed 6% after missing forecast net interest income (NIMs).

Oil, metal and iron ore prices fell but the Aussie dollar hit fresh six month highs as the greenback fell.

Japan isn't going to work today.

But China's week will be monstrous. There's June industrial production, retail sales, unemployment rate, and fixed asset investments all drop on Monday, alongside the China's Communist Party’s Third Plenum. Yikes.

June GDP has come in lower at the time of writing.

Finally, The former US president was shot in the ear at a few hours ago, but in New York investor attention is already recovering from the 7 or so stages of Grief to to Monday's second-quarter earnings reports – the trigger, ahem, the catalyst for any extension of these terrifying market’ highs.

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for 15 July :

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

Code	Name	Price	% Change	Volume	Market Cap
ARN	Aldoro Resources	0.11	55%	2103330	9558285.75
APC	Aust Potash Ltd	0.0015	50%	1014500	4020189.49
MCT	Metalicity Limited	0.003	50%	14745631	8971705.37
DOU	Douugh Limited	0.004	33%	59518	3246206.76
RFT	Rectifier Technolog	0.008	33%	1873555	8291903.68
SFG	Seafarms Group Ltd	0.004	33%	1280347	14509797.5
TIG	Tigers Realm Coal	0.004	33%	1708240	39200107.1
I88	Infini Resources Ltd	0.95	28%	2155897	28107660.5
DYM	Dynamicmetalslimited	0.17	26%	217555	4860000
AI1	Adisyn Ltd	0.035	25%	3393746	5183696.06
PBL	Parabellumresources	0.05	25%	4250	2492000.04
SNS	Sensen Networks Ltd	0.025	25%	24250	15558174.8
AVE	Avecho Biotech Ltd	0.0025	25%	1469938	6338594.03
HLX	Helix Resources	0.0025	25%	933333	6528387.37
VRC	Volt Resources Ltd	0.005	25%	2011374	16634712.5
MDI	Middle Island Res	0.021	24%	4995544	3703518.34
AS1	Asara Resources Ltd	0.011	22%	875118	7939578.15
SKS	SKS Tech Group Ltd	1.64	21%	550822	150929129
GRV	Greenvale Energy Ltd	0.037	19%	15261025	14220595.5
CY5	Cygnus Metals Ltd	0.051	19%	1663284	12614443
HHR	Hartshead Resources	0.007	17%	1945213	16852092.8
RGL	Riversgold	0.007	17%	29532011	7257460.92
TMK	TMK Energy Limited	0.0035	17%	137500	20764835.9
VML	Vital Metals Limited	0.0035	17%	1705622	17685200.9
3DP	Pointerra Limited	0.073	16%	5269395	50719838.2

Aldoro Resources (ASX:ARN) reports fresh metallurgical test work has returned open cycle niobium recovery level of 62.4% “on a selected Kameelburg sample”.

Those are numbers in line with recovery levels by developing mining explorers and producers in the global niobium space. Good news.

ARN says the processes resulted in an upgrade of the head feed of 0.74% Nb2O5 to 5.5% Nb2O5, “a multiple of 10.6 times with a 62.4% recovery rate of Nb2O5.” The digger says recovery rate and upgrade values are considered encouraging in the initial test phase.

“The latest niobium recovery result provides ample confidence leading towards maiden drilling targeting rich niobium dykes at the Kameelburg Niobium-REE Project.

“The forward process will focus on a finer grind and micro floatation to increase the grade and recovery further.

Also making a mess of Monday is the goldie and other digger Metalicity (ASX:MCT).

MCT is out at the Yundamindra Gold Project, located 65 kms south east of Leonora and 65 kms east of Kookynie where assays from the recent RC drilling programme have been returned with multiple impressive gold intersections and high grades.

Significant intercepts include: 14m@3.13g/tAu from 28m, and 1m@15.72g/t Au.

Importantly, MCT says mineralised intercepts correlate with historical drill intercepts, providing validation and encouragement for further drilling and potential resource estimation.

Adisyn (ASX:AI1) says it’s gone in for a binding collaboration agreement with 2D Generaton Ltd – is a global semiconductor IP business incorporated in Israel with close ties to – among others – NVIDIA.

Just say the name and the investors pile in.

Be that as it may, AI1 reports the the partnership aims to “generate transformational opportunities in the AI space”.

“Leveraging Adisyn’s expertise in data centre management, managed IT services, and cybersecurity, alongside 2D Generation’s industry-leading
capabilities in developing next-generation AI semiconductor solutions.

The Lithium hunter Dynamic Metals (ASX:DYM) farm-out JV of Widgiemooltha with Mineral Resources (ASX:MIN) has started to bear fruit after pre-conditions were satisfied and the latter coughed up a $4m payment.

The deal, etched in March, gives MIN a 40% share in the lithium rights of the project (after a further $1m payment next year), which will bump up to 65% as long as it spends $15m on exploration within the next four years.

While DYM has been searching the tenements for nickel prospectivity of late, MinRes is expected to start hitting the ground shortly to further prove up identified lithium targets.

Attura (ASX:ATA)
IT firms Atturra is rising as well after agreement to acquire Exent Holdings for $6mn in upfront consideration with earn-out/post-completion consideration of up to $2mn cash. ATA says it's a strategically aligned acquisition which helps to extend ATA's advisory and consulting network.

ATA also says FY24 revenue is expected to exceed $240 million, a 35% increase from the previous year. The company anticipates an underlying EBITDA of $25-$26 million, up 19% on pcp.

There's been some 40 new federal government contracts, including ones with the Departments of Defence, Home Affairs, and Treasury, which boosted performance.

And on Friday, the market closed before punters could get enough of SKS Technologies (ASX:SKS) which surged on news it'd won a terrific $90+ million data centre project with Built, for an “international hyperscale data centre.”

Although it's in Melbourne, people still thought it cool. The job should be completed by August 2025. Following the win, SKS also upwardly revised its revenue guidance for FY25 to ‘more than $200 million’.

SKS was still rising Monday morning.

Finally, a long way to go from where it's been, but Core Lithium (ASX:CXO) has jumped almost 10% after last week's positive exploration update and the news it's exceeded FY 2024 production guidance with production of 95,020 dry metric tonnes (dmt) of spodumene concentrate.

CXO says that has delivered a cash balance of $87.6mn as of June end.

ASX SMALL CAP LAGGARDS

Here are the best performing ASX small cap stocks for 15 July :

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

Code	Company	Price	%	Volume	Market Cap
88E	88 Energy Ltd	0.002	-33%	6,138,627	$86,678,016
PRX	Prodigy Gold NL	0.002	-33%	75,000	$6,353,323
TD1	Tali Digital Limited	0.001	-33%	13,767	$4,942,733
WML	Woomera Mining Ltd	0.002	-33%	37,650	$3,654,417
CT1	Constellation Tech	0.0015	-25%	216,877	$2,949,467
CTN	Catalina Resources	0.003	-25%	329,291	$4,953,948
JAV	Javelin Minerals Ltd	0.0015	-25%	5,102,281	$6,250,885
ALM	Alma Metals Ltd	0.007	-22%	668,331	$12,985,910
HT8	Harris Technology Gl	0.011	-21%	221,771	$4,187,897
XPN	Xpon Technologies	0.012	-20%	315,000	$5,436,622
AHN	Athena Resources	0.002	-20%	259,000	$2,676,169
ME1	Melodiol Glb Health	0.002	-20%	762,771	$765,659
NES	Nelson Resources.	0.002	-20%	332	$1,533,986
POS	Poseidon Nick Ltd	0.004	-20%	1,122,858	$18,567,674
ABB	Aussie Broadband	2.945	-18%	5,701,300	$1,054,999,478
KZR	Kalamazoo Resources	0.062	-17%	515,415	$13,490,012
AXE	Archer Materials	0.3	-17%	1,626,966	$91,744,925
CCZ	Castillo Copper Ltd	0.005	-17%	148,565	$7,797,032
RML	Resolution Minerals	0.0025	-17%	445,178	$4,830,065
GTG	Genetic Technologies	0.053	-16%	724,810	$8,329,686
LIC	Lifestyle Communit.	10.64	-15%	1,098,030	$1,530,272,479
GLN	Galan Lithium Ltd	0.165	-15%	4,500,269	$92,419,079
PR2	Piche Resources	0.17	-15%	541,988	$16,058,108
BNL	Blue Star Helium Ltd	0.006	-14%	1,685,113	$13,614,197
MOM	Moab Minerals Ltd	0.006	-14%	203,333	$5,556,700

IN CASE YOU MISSED IT – AM EDITION

Galan Lithium (ASX:GLN) has raised $1.1m through the use of its At- the-Market Subscription Agreement with Acuity Capital.

This will involve the issue of 7.05 million GLN shares priced at 15.6c each – a 8.8% discount to the 15-day volume weighted average price – under
the company’s LR7.1A capacity. Proceeds from the raising will be used to further develop its Hombre
Muerto West lithium brine project in Argentina.

At Stockhead, we tell it like it is. While Galan Lithium is a Stockhead advertiser, it did not sponsor this article.

Originally published as Small Caps Lunch Wrap: ASX hits record high… We’re through the looking glass here, people