ASX Small Caps Lunch Wrap: Who’s ready to waste an entire weekend hunting for Nessie?

At 8am AEST, the ASX 200 index futures was pointing up by +0.45%, and once the ASX opened it very nearly lived up to the hype, hitting +0.4% around 11am before sinking back to just +0.2% at lunchtime.

There are some crackerjack small caps winners this morning, plus one well-known large cap that’s ballooning like a coke-bloated birthday clown – all of which I’ll get to in a minute.

But first, it’s off to bonny Scotland, a nation that’s famous for many daft reasons – among them, the legend of the Loch Ness Monster.

Nessie, as the beast is affectionately known, is arguably the world’s most famous cryptid – that means an animal that people believe exists, but has never actually been seen, leading most of the population to suspect that those True Believers have suffered a catastrophic brain injury at some point in their lives.

The Loch Ness Monster has been a ‘thing’ for more than 1,400 years, first sighted (allegedly) by Irish monk known as Saint Columba, who travelled the lands of the British Isles during the 6th Century in a 1959 Peugeot 403 Cabriolet, solving crimes.

According to legend, Saint Columba – who was definitely not drunk – and his band of merry men happened upon a group of mourners in the year 565, dumping a body in the River Ness.

When questioned, Columba was told that the victim had apparently been “attacked by a ‘water beast’ that mauled him and dragged him underwater”.

Being the brave, divinely-protected soul that he was, Saint Columba made one of his followers – a fella improbably called Luigne moccu Min – swim across the river to see if he could make the beast reappear.

Which, you won’t be surprised to find out, it reportedly did – and, with murderous intent, it approached the hapless Luigne moccu Min all set to devour him… until he “made the sign of the cross” and, emulating his Messiah, made it back to the river bank with such haste that he appeared to be walking on water.

Fast forward to October 1871, and Nessie – after 1,300 years out of the spotlight – was seen again, this time by a Mr Mackenzie of Balnain, who saw a log-like creature thrashing about in the water.

But it wasn’t until the 1930s that Nessie fever really took hold, when part-time journalist Alex Campbell published the account of Aldie Mackay’s sighting of the beast, after she and her husband John spotted a creature, “its body resembling that of a whale”, which set the water “cascading and churning like a simmering cauldron”.

“Soon, however, it disappeared in a boiling mass of foam. Both onlookers confessed that there was something uncanny about the whole thing, for they realised that here was no ordinary denizen of the depths,” the report said.

Campbell’s report then added that, as the beast submerged, it “sent out waves that were big enough to have been caused by a passing steamer”.

I’ve passed a steamer or two in my 50 years on this planet, but never managed to have one  “send out waves” – but, if true, Campbell’s report does confirm that the famously terrible Scottish diet of deep fried whisky and bagpipes has been causing intestinal distress for many, many years.

Anyhoo… this report of the Loch Ness Monster had the world taking notice, largely because we didn’t have television yet, so there wasn’t much else to keep people occupied, and since then there have been dozens of Very Serious attempts to find out if there is something lurking in the depths of Loch Ness, or if some people are simply idiots.

It might not be long before we finally have an answer, though – local researchers  from the Loch Ness Investigation Bureau have put out a call for “monster hunters” to join in the search later this month, using drone technology and heat-sensitive cameras to try and definitively spot Nessie.

The hunt is on August 26 and 27, and there will be experts on hand to help volunteers, with guidance on “what to look out for”, such as huge prehistoric monsters, which may or may not be “passing steamers” in the lake.

I look forward to bringing you the half-baked, inconclusive results of the Great Nessie Hunt later this month, when “The Beastie” turns out to be a Chinese submarine sent to steal the recipe for haggis.

But in the meantime, I’d better crack on with this stock market stuff, because that’s what you’ve actually come here for, right?

Right.

TO MARKETS

The ASX opened this morning, despite a general feeling of ill-will after yesterday’s paltry effort left the benchmark down 0.2%.

But the good news is that Wall Street shifted gears overnight, providing a metaphorical boot to the ASX’s very real arse, driving a 0.4% rise by mid-morning.

If you were hoping for that kind of form to continue, I have predictably terrible news – it didn’t. By lunchtime today, the benchmark had slipped back again to be resting at +0.2% while we all shuffled through the canteen to collect a bowl of gruel for sustenance.

The bad news for yesterday’s standout sector Real Estate is that it’s found itself well out of favour once more, leading the losses with Consumer Staples on hand to keep it company in the dumps.

But up on top today are the Materials and InfoTech sectors, thanks in no small part to James Hardie’s (ASX:JHX) cracker of a quarterly that has driven its trading price up more than 15% this morning, pushing the company beyond $20 billion in market cap.

Financials is also holding a slim positive result this morning, with the XBK All Ords Banks index climbing 0.14% ahead of a raft of reporting from a number of banks due to be delivered tomorrow.

NOT THE ASX

Overnight, Wall Street snapped a four-day losing streak to leave the Dow Jones index up by 1.16%, the S&P 500 up 0.90% and the tech-heavy Nasdaq bigger by 0.61% at the end of the session.

Earlybird Eddy reported this morning that Super Investor Warren Buffet is probably preening quietly in the mirror, after his Berkshire Hathaway jumped 3.5% to a record high after reporting a 7% increase in earnings to US$10.04 billion against this time last year.

On the other side of the ledger, though, was Tesla which dropped 1% after chief financial officer Zachary Kirkhorn, who was seen as a possible successor to Elon Musk, resigned suddenly.

And in late trading, Beyond Meat Inc fell more than 10% after revealing it won’t meet guidance of becoming cashflow positive in the second half, because consumers are starting to realise that plant-based “vegan meat” makes you fart, big time.

Meanwhile, US Fed board member Michelle Bowman said additional rate hikes “will likely be needed”, while Fed Bank of New York President John Williams also urged the necessity to keep policy restrictive “for some time”.

And Goldman and JP Morgan said the Treasury selloff resulting from the US credit downgrade has been overdone, and told clients to buy US 10-year and 30-year bonds.

Goldman analysts added that bonds should not have been sold off that much because the Fitch downgrade did not matter, and that it contained “no new information” – and also (possibly) because Goldman didn’t think of selling off first, and got caught with its hands down the front of the Bonds they’ve been wearing to bed.

Gold traded -0.25% lower to US$1,936.80 an ounce, crude prices slipped by -0.5%, with WTI now trading at US$82.42 a barrel and iron ore 62% fe also fell 0.5% to $US104.73/tonne.

In Japan, the Nikkei is up 0.32% on news that a long-standing tradition might be drawing to a close, after animal rights protestors stepped up efforts to have the duck-catching event at the Itoman Hare festival banned.

It’s a fight that’s been brewing since 2015, when activists decided that the practice of catching live ducks isn’t really a sporting event, on the basis that it kinda looks like animal abuse.

The rules of the event are, I’ll admit, not very clear – but from what I can tell, it appears that loads of people jump in the river and use their bare hands to catch as many live ducks as they can within a set period of time. The winner gets a bag of ducks.

The contestants clearly love it, it’s definitely a crowd favourite, but as you can see, the ducks are clearly not into it at all.

Meanwhile in China, Shanghai markets are down 0.18% this morning, while in Hong Kong the Hang Seng is more than 1.1% lower in early trade.

In cryptoland, PayPal has taken another positive step into the Brave New World of Strange Money, announcing the launch its own US dollar-pegged stablecoin – PayPal USD (PYUSD).

“PayPal, as you might already know, has been a staunch supporter of a crypto-based digital payments future for some time now, launching crypto payments in 2020,” Rob “My moon won’t stop shaking” Badman writes this morning.

Bitcoin also probably did something – I really don’t know – so go check out Rob’s far superior knowledge on mysterious, spooky money that may or may not exist.

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for 08 August [intraday]:

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

Top of the Small Caps Pops this morning is Auris Minerals (ASX:AUR), which (at the time of writing) is up around 50% on news that the company’s hit significant gold and base metals results during drilling of targets at its Morck Well project in WA.

The results include intercepts of 15m @ 4.11g/t Au from 35m including 4m @ 12.8g/t Au from 38m, and 10m @ 1.49g/t Au from 45m – but Auris’ trading price is swinging around wildly at the moment, so it’s unclear quite where this one’s likely to land.

Enjoying a more stable climb this morning is Errawarra Resources (ASX:ERW), up more than 36% so far for the day on the back of continued nearology-driven investors piling in, thanks to next door neighbour Azure Minerals’ (ASX:AZS) stunning find from earlier this week.

And in third place is Ensurance (ASX:ENA), up nearly 34% on news that the company has entered a binding scheme implementation deed with PSC Insurance Group (ASX:PSI), which will see the latter acquire 100% of ENA.

PSC Insurance says the price is to be “the greater of $25.2 million and 5,000,000 PSC shares – to be satisfied by way of the issue of 5,000,000 PSC shares with any difference between the value of those shares and the purchase price of $25.2 million to be paid in cash”.

The transaction values ENA at no less than $25.2 million and each ENA share at 28 cents per ENA share, with ENA shareholders set to receive approximately 0.056 new PSC share for each ENA share they hold.

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for 08 August [intraday]:

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

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