Month: October 2022

Lithium has been the talk of the S&P/ASX 200 Index (ASX: XJO) in 2022, and shares in Lake Resources NL (ASX: LKE) have received particular attention.

The company was added to the iconic index in June after its value surged by more than 40% over the first six months of the year. Since then, it has fallen by around 20% amid its boss’ resignation, a short seller attack, and a dispute between the company and its joint venture partner.

The Lake Resources share price is $1.037 at the time of writing.

But is the ASX 200 lithium share profitable? Keep reading to find out.

Is ASX 200 lithium share Lake Resources profitable?

Those hopeful Lake Resources could be a profitable ASX 200 lithium share will be disappointed to learn it’s still operating in the red.

The majority of the company’s efforts go towards its wholly owned Kachi Lithium Brine Project, located in Argentina.

The project is expected to produce 50,000 tonnes of battery-quality lithium carbonate each year, as per its pre-feasibility study.

The company is also looking to double the project’s capacity. It’s pushing on with a drill campaign to help support its case.

But exploration and development bring plenty of costs. And, as the company isn’t producing any lithium to sell, it doesn’t yet have any income.

The company posted a $5.68 million loss for financial year 2022 ­– representing a 51-cent loss per share.

It also revealed an outflow from operating activities amounting to $8.68 million for the 12 months ended 30 June. Though, Lake Resources received $174 million from issuing shares.

All in all, the company ended last financial year with $175.4 million of cash and no debt. That leaves it financed through to the final investment decision on the Kachi Project.

The post Is ASX 200 lithium player Lake Resources profitable? appeared first on The Motley Fool Australia.

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More reading

• The Telstra share price is still trading at less than half its record highs. Time to pounce?
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000
• This is what will get ASX shares rising again early 2023: economist
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It has been a stunning day of trade for the Hub24 Ltd (ASX: HUB) share price.

In afternoon trade, the investment platform provider’s shares are up almost 14% to $25.10.

This makes it the best performer on the ASX 200 index on Tuesday.

Why is the Hub24 share price racing higher?

Investors have been scrambling to buy the company’s shares following the release of its latest quarterly update.

According to the release, Hub24 had a strong first quarter and delivered platform net inflows of $3 billion for the three months.

And while this is down 1.6% on the net inflows recorded a year earlier, it is still very strong in the current environment. Especially compared to what fund managers like Magellan Financial Group Ltd (ASX: MFG) have been reporting.

The release reveals that these inflows took Hub24’s platform funds under administration (FUA) to $52.4 billion. Which, after accounting for negative market movement of $0.3 billion, represents a net increase of $2.7 billion since the end of FY 2022.

This was driven by continued growth in the number of advisers on its platform. Hub24 now has 3,639 advisers, up 13% year over year and 4.3% since the end of FY 2022.

Change of deposit agreement

In other news, Hub24 revealed that it is ditching Australia and New Zealand Banking Group Ltd (ASX: ANZ) in favour of Bank of Queensland Ltd (ASX: BOQ) for deposits. This is expected to result in a reduction in its average platform cash management fees.

Management explained:

Following a competitive selection process HUB24 has signed an agreement with Bank of Queensland which will take effect from 2nd December 2022. As a result of this change in providers, and subject to portfolio mix fluctuations, this is expected to result in a reduction in the rate of HUB24’s current average platform cash management fee of between 0.20% pa to 0.30% pa.

The post Guess which ASX 200 tech share is surging 14% following a $3 billion quarter appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why ‘we’re quite bullish’ on this battered ASX 200 growth share: fundie

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Corporation Ltd (ASX: TLS) share price is in the green today, and decisively so. Telstra shares are presently up by a pleasing 1.32% at $3.84 a share.

That’s only just behind the S&P/ASX 200 Index (ASX: XJO), which is currently up by an even more robust 1.43%.

But here’s a fact that will probably make Telstra investors a little more envious. Telstra is, at these levels, not even close to its all-time high. In fact, it’s less than halfway there. Back in late 1999, the telco was commanding a share price close to $9 a share.

Of course, that doesn’t mean too much today. Back at the turn of the millennium, the markets were in full-froth mode, with the dot-com bust about to swing its axe. And those were pre-broadband, pre-mobile phone and landline-heavy times. That near-$9-a-share Telstra was a very different beast to the company we see today.

But still, Telstra shares have had a rough time of it lately. The telco remains down 9% in 2022 thus far, and down by 0.8% over the past 12 months.

Does this mean Telstra shares are a buy today?

So, could this be the time to pounce on his famous ASX dividend share? The company is sitting on a trailing and fully franked dividend yield of 4.3% at these prices, after all.

Well, one ASX broker who thinks it is worth a look is Morgans. As my Fool colleague James covered just yesterday, Morgans has just rated the telco as an add.

It also gave Telstra a 12-month share price target of $4.60 This implies a potential upside of close to 20% over the coming year if accurate.

Morgans stated that it believes some of Telstra’s assets, such as InfraCo, are worth “substantially more” than the pricing the whole company is currently commanding. Together with the woes that its rival Optus is currently facing, the broker is predicting that Telstra “looks well placed for the year ahead”.

No doubt that will be music to investors’ ears today.

At the current Telstra share price, this ASX 200 blue chip share has a market capitalisation of $43.8 billion.

The post The Telstra share price is still trading at less than half its record highs. Time to pounce? appeared first on The Motley Fool Australia.

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More reading

• Is ASX 200 lithium player Lake Resources profitable?
• 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000
• This is what will get ASX shares rising again early 2023: economist
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The leading investors from Wilson Asset Management (WAM) have shared two compelling S&P/ASX 200 Index (ASX: XJO) investment prospects on their radar.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

Meanwhile, WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 14.7% per annum since its inception in August 1999. That’s before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 7.9% per annum over the same timeframe.

With that in mind, here are the two ASX 200 shares WAM Capital has outlined in its recent monthly update.

Premier Investments Limited (ASX: PMV)

WAM describes Premier Investments as a business that owns and operates a group of retail, consumer products, and wholesale businesses.

Last month, the business announced its FY22 result, achieving a 4.9% year-over-year increase in statutory net profit after tax (NPAT) to $285.2 million.

The business also declared a fully franked final dividend of 54 cents per share as well as a fully franked special dividend of 25 cents per share.

The ASX 200 share managed to generate $1.5 billion of retail sales and record retail earnings before interest and tax (EBIT) of $352.5 million. This is despite suffering from “significant” operational challenges including lockdowns, global supply chain complexities, and disruptions caused by the Omicron COVID variant.

WAM was also pleased by the company’s decision to announce a 12-month on-market share buyback of up to $50 million. This will allow the company to deliver a boost to earnings per share (EPS) and increase total shareholder returns.

However, the fund manager noted that the retail sector could see some volatility due to rising interest rates and a declining wealth effect in the short term.

So, why is WAM positive on the ASX 200 share? The fund manager said:

We believe Premier Investments is well-positioned given the opportunity for ongoing global expansion of Smiggle and potentially Peter Alexander – market-leading domestic brands with leverage to the re-opening theme along with a very strong balance sheet and management team that is positioned to capitalise on any opportunities that may present.

Event Hospitality and Entertainment Ltd (ASX: EVT)

This cinema, hotels, leisure assets, and property ASX 200 share is WAM’s other pick.

The Event Hospitality and Entertainment share price fell during September, like the rest of the ASX share market.

However, the fund manager believes the business is “well-positioned to benefit from the shift in consumer spend from goods to experiences in the near-term, underpinned by an improving theatrical content slate for cinemas, progressive recovery in international tourism for the hotels business and a solid winter 2022 result at Thredbo.”

On top of that, the investment team believes that its assets are being undervalued as well. It said:

We believe Event Hospitality and Entertainment assets remain undervalued and we estimate that the operating businesses are trading on approximately 4x enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA) at current share price levels, a significant discount to our intrinsic valuation.

The post These 2 ASX 200 shares are ‘compelling growth opportunities’: fund manager appeared first on The Motley Fool Australia.

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More reading

• Why is the WAM Capital share price having such a lousy start to the week?
• Want to snare the next WAM Capital dividend? Here’s how
• How can investors prepare their share portfolio for retirement?
• The ASX 200 share experts are urging to buy right now
• Have ASX 200 retail shares been worth buying so far in FY23?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’ve been closely following the big swings in the US stock market recently, you’ll be forgiven for feeling a little motion sick.

Volatility has been the name of the game over the past three trading days, in moves mirrored here by the S&P/ASX 200 Index (ASX: XJO).

Last Thursday, the S&P 500 Index (SP: .INX) ended the day up 2.6%, after initially tumbling 2% on open following higher-than-expected inflation figures. Those moves were reversed on Friday when the S&P 500 finished down 2.3%.

But investors in the US stock markets shook off that malaise yesterday (overnight Aussie time) to again send the S&P 500 up 2.7%. Tech stocks fared even better, with the Nasdaq Composite (NASDAQ: .IXIC) closing up 3.4%.

Reaching for your Dramamine yet?

What’s happening with the US stock market?

Investors and traders alike appear to be on a knife edge over whether markets are signalling a bottom or whether there’s more downside to come.

Last week’s volatility was driven by the higher-than-forecast September inflation data. The rally on that higher data looks to have been caused by a wave of short-sellers needing to cover their positions when they were caught on the wrong side of the trend.

The next day’s steep losses came as more of a direct response to those inflation numbers.

Which brings us to Monday.

The big lift in US stock markets yesterday was partly fuelled by expectation-beating earnings results from Bank of America Corp (NYSE: BAC).

A 13% year-on-year lift in credit card spending at the bank, coupled with falling delinquencies, showed US consumers remained resilient in the face of rising rates and high inflation.

Bank of America, with a market cap of some US$270 billion (AU$428 billion), closed up 6% on the results, helping drive the US stock market to another big day of gains.

The US stock market also got a boost from the United Kingdom. Investors were clearly pleased that many of the dramatic economic policies proposed by prime minister Liz Truss have been rolled back.

Topping it off, the recent big price swings also have analysts pondering whether markets are signalling that a bottom is forming.

Here’s what the experts are saying

Commenting on the big moves in the US stock market, Phil Blancato, CEO of Ladenburg Thalmann Asset Management, said (courtesy of Reuters):

The information coming out of the banks are much better than anticipated. Even though there was a drop in earnings they’re making significant income on their cash. So this recession is not a consumer-based recession. It’s not a bank-based recession if you can even call it one. It’s simply a cyclical slowdown.

Those are the best because they generally take around 10 months to recover which is right where we are. Inflation is not slowing the economy down. If we get any kind of recession it’s mild. For that reason, when you look at stocks trading now below their P/E [price to earnings] averages, stocks are fairly valued again and offer a good opportunity.

Siddharth Singhai, chief investment officer at Ironhold Capital, didn’t share that bullish sentiment on the US stock market.

“This seems to be a faux rally fuelled by lower inflation expectations, I don’t think the rally makes sense. Interest rate hikes are not getting discounted by the market,” he said.

Peter Tuz, president of Chase Investment Counsel, added (quoted by Reuters):

I was thinking that the bank earnings, especially Bank of America, was really pretty optimistic, and that coupled with the abandonment of restrictive policies in England just seemed to be the fuel that got the market going this morning.

There were some pretty rough days last week… The choppiness and volatility that we are seeing is part of the bottoming process. The fourth quarter generally is pretty good for markets historically.

If the US stock market, and by extension the ASX 200, is indeed in the process of forming a bottom, investors can expect more volatility during the rebound.

As with combatting motion sickness on a boat, the best bet is to keep your eyes fixed on the horizon and not fret about the daily ups and downs.

The post Bank or bust: What on earth is going on with the US stock market? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 shares going gangbusters on Tuesday?
• Why buying PayPal is a genius move right now

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re an owner of Vanguard Australian Shares Index ETF (ASX: VAS) units, then today is a good day for you for a couple of reasons.

The first is that thanks to a strong night of trade on Wall Street, the Australian share market is rebounding strongly today.

This has seen the Vanguard Australian Shares Index ETF unit price rise almost 1.5%.

The other reason to smile is that today is payday for unitholders, with the latest Vanguard Australian Shares Index ETF dividend being paid to shareholders.

Vanguard Australian Shares Index ETF dividend

Earlier this month, the operator of the ETF, Vanguard, announced that the Vanguard Australian Shares Index ETF would be paying unitholders a quarterly dividend of 145.0577 cents per unit.

This is an increase of almost 4.5 cents per unit over the prior corresponding period and equates to a yield of 1.7% at today’s prices.

It also brings the total dividends paid over the last 12 months to approximately $6.30 per unit, which is the equivalent of a 7.5% yield.

Where next for the Vanguard Australian Shares Index ETF?

Given that the Vanguard Australian Shares Index ETF seeks to track the return of the S&P/ASX 300 Index before fees, expenses and tax, its future performance will depend entirely on how Australian shares perform over the next 12 months.

Unfortunately, this is incredibly difficult to predict in the current uncertain economic environment.

However, it is worth remembering that the Australian share market has provided strong returns for investors over the last few decades. And once it finds its legs again, the same is likely for the next few decades.

So, it could pay to be patient through the volatility.

The post The Vanguard Australian Shares Index ETF dividend is being paid today. Here’s the lowdown appeared first on The Motley Fool Australia.

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• If I’d invested $5,000 in Vanguard’s VAS ETF at the start of 2022, here’s what I’d have now
• Why dividends matter
• Why is the Vanguard Australian Shares Index ETF lagging the market on Monday?
• This ASX ETF was my first investment, and I’ll be holding it for the long term
• Is the Vanguard Australian Shares Index ETF (VAS) dividend growing?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Netflix (NASDAQ: NFLX) rose sharply on Monday. The media streaming leader’s stock closed the day 6.6% higher, driven by two very different factors.

So what

The stock market as a whole was up on Monday. First, many investors wanted to take advantage of low stock prices after a brutal sell-off on Friday. This bullish effect was amplified by news from Great Britain, as the British government cancelled most of the tax cuts it had introduced in a recent mini-budget.

Together, these activities drove the S&P 500 2.7% higher, while the more volatile Nasdaq Composite index gained 3.4%. As a Nasdaq-listed growth stock, Netflix shares benefited strongly from these positive market moves.

And Netflix is scheduled to report third-quarter results after the closing bell tomorrow. The second quarter provided a bullish response to the sell-offs that follow the reports in January and April, and Netflix investors are hanging on the edge of their seats to see how the business developed in the July to September period.

Now what

Most of all, Netflix investors hope that the subscriber losses of the first half will remain in the rearview mirror from now on. Furthermore, everyone wants to know more about the ad-supported subscription tier that will launch on Nov. 3 — and how this new option might affect Netflix’s business trends.

We are about to get the answers to these questions tomorrow. In the meantime, Netflix’s stock may have recovered nicely in recent months, but the price still stands 60% lower year to date. In other words, Netflix has a lot to prove this week.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Netflix stock was soaring today appeared first on The Motley Fool Australia.

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More reading

• Tesla and Netflix will make or break the Nasdaq this week
• Netflix stock could be on the verge of a massive turnaround
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Anders Bylund has positions in Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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It’s no secret that lithium shares have had a good run over recent years, with many making their way onto the iconic S&P/ASX 200 Index (ASX: XJO).

Many investors who put cash into three lithium favourites many moons ago – and held it there – will likely be thankful they did.

Of course, it’s tempting to take profits when things are going well. Those who invested in the Pilbara Minerals Ltd (ASX: PLS) initial public offering (IPO) could have walked away when their investment’s value had increased four-fold in 2018.

However, if they held onto their shares, they would have seen the company reach profitability in financial year 2022 and their stock rocket to more than 20 times what they paid.

So without further ado, here are three ASX 200 lithium shares that, together, have turned a $10,000 investment into half a million dollars over their listed life.

3 ASX 200 lithium shares that turned $10,000 into $500,000

If an investor split $10,000 between these three ASX 200 lithium shares at their respective IPOs, investing $3,333 in each, here’s how their money would have worked for them.

ASX 200 lithium company	Year floated	Total return since	Recent value of $3,333 invested
Pilbara Minerals Ltd (ASX: PLS)	2010	2,295%	$79,825
Allkem Ltd (ASX: AKE)	2007	5,660%	$191,981
Mineral Resources Limited (ASX: MIN)	2006	7,558%	$255,234

The most recently listed lithium winner is Pilbara Minerals.

It offered new shares for 20 cents apiece as part of a prospectus back in 2010. That saw it re-listing under its current name. At its most recent close, Pilbara Minerals shares were trading at $4.79.

Allkem has posted the second-best return of the trio after handing out shares for 25 cents each as part of its IPO.

Of course, the company went by the name of Orocobre back then. It was renamed Allkem in 2021 following its merger with formerly ASX-listed Galaxy Resources.

Allkem shares closed Monday’s trade at $14.40.

Finally, the Mineral Resources share price has posted the biggest gain since its listing in 2006. Though, the company hadn’t established its lithium leg at that time.

Instead, it listed as a mining services provider, offering its shares for 90 cents apiece under its prospectus. Nowadays, they’re swapping hands for a whopping $68.92 at last close.

Does the future still look bright for lithium stocks?

The performance of ASX 200 lithium shares is highly dependent on the materials’ value. Fortunately, that’s expected to climb in the near future.

The federal government believes financial year 2023 will be a record-breaking year for Australia’s lithium exports – driven by record-high lithium prices.

Lithium hydroxide is expected to trade at $51,510 a tonne in 2023. The material’s price will likely be driven by demand for electric vehicles.

However, the value of both lithium and Australia’s lithium exports are tipped to ease in financial year 2024.

The post 3 ASX 200 lithium shares that turned a $10,000 investment into $500,000 appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals share price jumps on strong lithium auction results
• This is what will get ASX shares rising again early 2023: economist
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why are these ASX 200 lithium shares smashing it on Monday?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price is having a strong day.

In morning trade, the banking giant’s shares are up 2% to $23.92.

This means the Westpac share price is up 16% since the start of the month.

Why is the Westpac share price rising today?

There have been a couple of catalysts for the rise in the Westpac share price on Tuesday.

The first is a strong showing in the banking sector following a very positive session on Wall Street overnight. This has seen all of the big four banks climb today.

The second catalyst, which has seen the Westpac share price outperform its peers, is investors responding positively to the release of an announcement this morning.

What was announced?

Earlier today, Westpac confirmed that it is looking at the potential acquisition of payments processor Tyro Payments Ltd (ASX: TYR). The bank commented:

Westpac confirms it is in preliminary discussions with Tyro Payments Limited to acquire 100% of the company’s issued share capital. There is no certainty that any transaction will result.

Australia’s oldest bank believes that acquiring Tyro would strengthen its small business offering. It briefly explained:

An acquisition would strengthen Westpac’s small business proposition, enabling it to better support customers and grow merchant acquiring, particularly in the hospitality and healthcare sectors.

What’s happening with Tyro’s shares?

Interestingly, the Tyro share price has barely moved today despite this news. It is currently up only 0.5%, which could be an indication that investors aren’t overly convinced that a deal will be struck based on what management said this morning.

Tyro commented:

The Company confirms it has received approaches from several parties expressing interest in a potential change of control transaction, including Westpac Banking Corporation. None of these approaches are sufficiently definite or advanced to warrant further disclosure at this time.

The Company notes that these approaches are non-binding and highly conditional in nature, and there is no certainty that a binding offer or a transaction of any kind will eventuate.

The post Westpac share price climbs on Tyro news appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) shares are off to a roaring start today.

In early morning trade, the benchmark index is up 1.4%.

ASX 200 shares have been unusually volatile over the past few days, closing 1.4% lower yesterday after finishing 1.8% higher on Friday.

So, what’s going on?

Why are ASX 200 shares rocketing today?

ASX 200 shares are again closely following the action taking place in US markets.

Yesterday, overnight Aussie time, saw the S&P 500 Index (SP: .INX) finish up 2.7%.

Investor enthusiasm looks to have been sparked on a number of fronts.

First, Bank of America Corp (NYSE: BAC) reported its results and earnings at the bank, with a market cap north of US$270 billion, came in ahead of consensus expectations. Bank of America closed up 6% on the results and helped drive the broader bullish sentiment.

It also appears that the big swings we’ve seen on the S&P 500, mirrored here by ASX 200 shares, have some traders speculating that markets may be signalling the bottom is in.

And then there are the goings on in the United Kingdom, where a number of market-shaking policies put forward by newly minted prime minister Liz Truss have been axed.

What the experts are saying

Commenting on the surge in US markets, and by extension ASX 200 shares, Jason Paltrowitz, director of corporate services, OTC Markets Group, said (courtesy of Reuters):

It’s a combination of factors. Obviously, the positive BofA earnings as well as others have caused positive movement – while EPS [earnings per share] growth is lower than previous quarters, it’s better than expected. Additionally, Friday’s sell off was about uncertainty and not wanting to hold positions over the weekend. The start of the week has that money back in the market.

Peter Tuz, president of Chase Investment Counsel, added:

I was thinking that the bank earnings, especially Bank of America, was really pretty optimistic, and that coupled with the abandonment of restrictive policies in England just seemed to be the fuel that got the market going this morning.

There were some pretty rough days last week… The choppiness and volatility that we are seeing is part of the bottoming process. The fourth quarter generally is pretty good for markets historically.

Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, sounded a note of caution (quoted by Reuters).

“I think this is more a sign of more volatility to come,” he said. “I don’t think this is a sign of a bottom because we are not seeing real sustained long-term buyers come in… Most of the flow that we are seeing just today is people re-engaging hedges and shorts.”

Time will tell whether the lift in US stocks and ASX 200 shares today is a bear market rally or a more sustainable leg up based on a bottom forming.

There are plenty more earnings results due from major US stocks over the coming two weeks. Whether share markets trend higher or lower over those weeks, I expect we’re not through with the volatile swings quite yet.

The post Why are ASX 200 shares going gangbusters on Tuesday? appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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