Category: Stock Market

Immutep Ltd (ASX: IMM) shares are ending the week with a bang.

In morning trade, the ASX healthcare stock is up 25% to 37 cents.

Why is this ASX healthcare stock rocketing?

This clinical-stage biotechnology company’s shares are taking off this morning after it announced positive results from Cohort B of the TACTI-003 Phase IIb trial.

This trial is evaluating eftilagimod alfa (efti) in combination with Merck & Co’s anti-PD-1 therapy Keytruda (pembrolizumab) as a first-line treatment of recurrent or metastatic head and neck squamous cell carcinoma patients (1L HNSCC) with negative PD-L1 expression.

The release notes that the updated efficacy and safety data was presented by Dr. Robert Metcalf from the Christie NHS Foundation Trust during an oral presentation at the ESMO Virtual Plenary session on Thursday.

Dr Metcalf revealed that the investigational immuno-oncology (IO) combination utilising efti and Keytruda achieved an objective response rate (ORR) of 35.5% (11 of 31 evaluable patients). He also reported a disease control rate (DCR) of 58.1%, according to RECIST 1.1, in 1L HNSCC patients whose tumours do not express PD-L1 (Combined Positive Score [CPS] <1).

Is this good?

The above may read like gobbledygook if you’re not familiar with clinical trials. But in summary, these are very positive and promising results.

In fact, the company notes that these results are “among the highest recorded for a chemotherapy-free approach in negative PD-L1 patients and compare favourably to a historical control of 5.4% ORR and 32.4% DCR from anti-PD-1 monotherapy.”

Commenting on the trial results, Dr Metcalf said:

The high response rate from this novel immunotherapy combination is well above other treatment approaches without chemotherapy. It matches historical response rates from chemotherapy-based treatments but without the associated toxicities. This is really significant for patients with head and neck squamous cell carcinomas who have a CPS less than one and for whom chemotherapy is the current first line treatment.

Achieving complete responses in this group bodes well for this immunotherapy combination’s future potential, especially given the positive trend in response durability. The clinically meaningful response rate and high unmet medical need warrant further investigation of eftilagimod plus pembrolizumab in this patient population.

In light of this data and the high unmet medical need, Immutep advised that it will discuss the path forward with regulatory agencies. And as Efti has previously received FDA Fast Track designation in 1L HNSCC regardless of PD-L1 expression, these are promising times for the company. Though, there is still a long road ahead.

The post Why is this ASX healthcare stock rocketing 25% on Friday? appeared first on The Motley Fool Australia.

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• Why Abacus, Bannerman Energy, Immutep, and Pilbara Minerals shares are falling today
• Why APA Group, Immutep, NAB, and Immutep shares are sinking
• Why did this ASX healthcare stock just crash 47%?

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.

BHP Group Ltd (ASX: BHP) shares are under pressure on Friday morning.

At the time of writing, the mining giant’s shares are down over 1% to $43.09.

Why are BHP shares falling?

Investors have been selling the Big Australian’s shares this morning after it dropped a major bombshell announcement.

According to the release, BHP will temporarily suspend its Nickel West operations and West Musgrave project (Western Australia Nickel) from October.

This won’t be a short term suspension. BHP advised that it intends to review the decision to temporarily suspend Western Australia Nickel by February 2027. That’s up to two and a half years away.

Management has blamed the suspension on weak nickel prices and expectations for prices to remain at low levels for the foreseeable future due to “oversupply in the global nickel market.”

It highlights that “forward consensus nickel prices over the next half of the decade have fallen sharply reflecting strong growth of alternative low-cost nickel supply.”

What will this cost?

BHP advised that during the temporary suspension, it will continue to support its workforce and local communities. It plans to invest approximately US$300 million (A$450 million) per annum following completion of a transition period to support a potential re-start of Western Australia Nickel.

Among the assets that are being suspended are the Kwinana nickel refinery, Kalgoorlie nickel smelter, and Mt Keith and Leinster operations, as well as the development of the West Musgrave project.

BHP’s Australian President, Geraldine Slattery, commented:

Since BHP announced a review of Western Australia Nickel in February, we have explored options to stem losses in the short-term and identify a viable path forward for the business. Like others in the Australian nickel sector, we have not been able to overcome the substantial economic challenges driven by a global oversupply of nickel. We have made the difficult but necessary decision to temporarily suspend the Nickel West operation and West Musgrave project.

We will continue to invest approximately AU$450 million (US$300 million) per annum in the Western Australia Nickel facilities to enable a potential re-start. Western Australia remains an important investment destination for BHP globally, with investment in the State expected to be greater than AU$12 billion over the next five years and we will continue to work with all of our Western Australian partners to advance the economic prosperity of the State.

BHP shares are down almost 15% since the start of the year.

The post BHP shares tumble on nickel bombshell appeared first on The Motley Fool Australia.

More reading

• Is it time to dive back into ASX lithium shares?
• 5 things to watch on the ASX 200 on Friday
• Why ASX investors are ‘flocking back’ to BHP shares and these other top stocks
• An ASX dividend titan I’d buy over BHP shares
• Here’s what the iron ore price will be this time next year: Westpac

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.

Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW) shares are popular options for blue chip investors.

Both are high quality businesses with a collection of recognisable brands.

Wesfarmers is the name behind Bunnings, Kmart, Target, Officeworks, Priceline, Silk Laser Clinics, and WesCEF, to name just a few.

Whereas Woolworths Group operates businesses such as the eponymous Woolworths supermarket brand, Big W, Petstock, and PFD Food Services.

Given how their businesses overlap in many ways, having just one of them in a portfolio makes sense. But which one should you buy right now? Let’s see which one Goldman Sachs rates as the buy.

Wesfarmers or Woolworths shares?

According to recent notes, Goldman Sachs thinks that Woolworths shares are the standout pick of the two.

It currently has a conviction buy rating on its shares with a price target of $40.20. This implies potential upside of 17% for investors over the next 12 months.

The broker believes that share price weakness over the past year has created a compelling buying opportunity in a high quality company with defensive earnings. It commented:

WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

Goldman isn’t feeling as positive about Wesfarmers’ shares. It currently has a neutral rating and $68.80 price target on its shares. This suggests that upside of just 2.2% is possible from current levels.

While the broker is a fan of the company, and particularly the Bunnings business, it just doesn’t see enough value in its shares at current levels. It explains:

Wesfarmers is a conglomerate that operates across a range of industries with ~65% of EBIT coming from Bunnings, a household hardware chain. We expect Bunnings to be more resilient vs. other household related retailers, with buoyant median house price expectations signaling higher property transactions/alts & adds to come. Additionally, we also expect a resilient Bunnings to generate ~A$2.0B of free cash flow each year to FY26 to further fund two new growth platforms with 1) Health, including further scaling into high growth and high margin non-invasive aesthetics business; and 2) Lithium, with high quality, low cost and access to capital a notable advantage. That said, WES in our view is now fairly priced to reflect these growth prospects. We are Neutral rated on the stock.

So, as far as Goldman Sachs is concerned, Woolworths shares are the way to go for blue chip investors.

The post Wesfarmers vs Woolworths: Which are the best ASX shares to buy today? appeared first on The Motley Fool Australia.

More reading

• Why did the Woolworths share price sink 15% in FY 2024?
• How much cash do you need to quit work and live off ASX dividend income?
• The Wesfarmers share price rocketed 32% in FY 2024! Here’s how
• 2 ASX shares to buy for a retirement portfolio in FY25
• 10 ASX shares to buy in FY25

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 Goldman Sachs Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

After crashing deep into the red over the past 12 months, Core Lithium Ltd (ASX: CXO) shares could now be close to their bottom.

That’s the view of analysts at Goldman Sachs, which have just taken their sell rating off the lithium miner’s shares.

What is Goldman Sachs saying about Core Lithium shares?

Goldman has been tipping Core Lithium as a sell for some time. And with its shares losing 90% of their value since this time last year, it certainly would have paid to listen to the broker.

And while its analysts are becoming a little more upbeat on the lithium miner, this shouldn’t necessarily be interpreted as a signal to buy.

According to a note from earlier this week, the broker has upgraded Core Lithium’s shares to a neutral rating with an 8 cents price target.

This price target is still a sizeable 20% below where its shares currently trade because of some solid gains this week in response to a couple of promising updates.

Why did the broker upgrade its shares?

Goldman believes that the company’s restart risk is now priced in and highlights its strong cash balance. It said:

While we still expect developers to underperform ramped up producers into the declining lithium price environment, we upgrade CXO to Neutral on valuation, with ongoing production restart risk now more priced in at 1.1x NAV (peers 0.8-1.0x NAV) or pricing ~US$1,170/t LT spodumene, and ~40% of CXO’s market cap now in cash on hand (with no debt) potentially partially mitigating exposure to falling lithium prices.

Since we added CXO to the Sell list on 20 Nov 2023, the CXO share price has fallen ~76%, underperforming ASX lithium peers and spodumene/ carbonate/ hydroxide prices down 15-30% over the same period, with the ASX 200 up +11%. We update our valuation methodology to 100% NAV (from 75% NAV, 25% EV/EBITDA multiple), with a return to production and cashflow unlikely in the near-term, in our view, and lower our PT to A$0.08/sh.

The broker also highlights that there is reason to be optimistic from Core Lithium’s exploration activities. Though, it concedes that any real benefits from this are unlikely to be realised in the immediate term. It adds:

Though further exploration is underway, and while potential resource expansion could be promising (including revisiting the gold, uranium and base metal exploration projects), with resource extension likely at depth/from new areas, we see limited near-term upside (particularly as new projects likely require additional funding), where further meaningful exploration is now also likely longer dated on falling lithium prices, particularly with a near-term restart of the operation now unlikely in the near-term.

In light of the above, Goldman thinks investors should keep their powder dry for the time being.

The post Why did Goldman Sachs just upgrade Core Lithium shares? appeared first on The Motley Fool Australia.

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• Guess which 2 ASX All Ordinaries shares were the best and worst performers of FY24?

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 Goldman Sachs Group. 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.

If I were buying one ASX stock for passive income today, I’d be eyeing Fortescue Metals Group Ltd (ASX: FMG) shares.

The S&P/ASX 200 Index (ASX: XJO) mining stock had a strong run yesterday, with shares closing the day up 1.90% at $22 apiece.

Still, that leaves Fortescue shares down 25% since the opening bell sounded on 2 January.

Now, there’s no guarantee that shares won’t sell down further. But with Fortescue counting among the lowest-cost iron ore producers in the world, with additional possible benefits from its green hydrogen ambitions, I see this year’s sizeable retrace as presenting a potentially opportune entry point.

Particularly with long-term passive income in mind.

We’ll get to that in just a tick.

But first…

Spread those eggs around!

‘Don’t put all your eggs in one basket’ may be a trite expression. But whether you’re investing for capital gains, passive income, or both, it’s an expression to keep at the forefront of your mind.

While we look specifically at the potential of investing in Fortescue shares below, a proper income portfolio should contain a diversified basket of stocks operating in different sectors and ideally across various locations. There’s no magic number, but 10 is a good ballpark figure.

Also, remember that the yields you generally see quoted are trailing yields. Future yields may be higher or lower, depending on a range of company-specific and macroeconomic factors.

With that said…

Tapping Fortescue shares for $2,000 a month in passive income

$2,000 a month in passive income, or $24,000 a year, could make a big difference to most Aussies’ retirement plans. Mine included!

So, how many Fortescue shares do I need to buy?

Turning to the past 12 months, Fortescue paid a final fully franked dividend of $1.00 a share on 28 September.

The interim dividend of $1.08 a share will have landed in eligible investors’ bank accounts on 27 March.

That dividend was up 44% from the interim dividend paid out the previous year. This big boost was driven by some strong half-year results, which included a 21% year on year increase in revenue to US$9.5 billion. And net profit after tax (NPAT) of US$3.3 billion for the six-month period was up 41% year on year.

All up then, Fortescue paid out $2.08 a share in passive income over the past year.

At yesterday’s closing price of $22, the ASX 200 miner trades on a juicy, fully franked trailing yield of 9.45%.

And to garner my $2,000 in monthly passive income, I’d need to buy 11,539 shares today.

Now that’s a big investment to make all in one go.

But that’s okay.

Investing is a long game.

I can also purchase smaller amounts of Fortescue shares on a monthly basis, and I expect to achieve my passive income goal in due time.

The post I’d buy Fortescue shares today to generate $2,000 of monthly passive income appeared first on The Motley Fool Australia.

More reading

• Is it time to dive back into ASX lithium shares?
• Fortescue shares in focus as more ‘spying’ details emerge
• It’s a buy! Expert says Fortescue shares are oversold
• Here’s what the iron ore price will be this time next year: Westpac
• These 5 ASX dividend shares had the highest yields in FY24

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.

Are you looking for exposure to the coal industry for your portfolio? If you are, then Bell Potter has you covered.

This morning, the broker has named one ASX 200 coal stock to buy and one to hold.

Let’s take a look at these stocks in detail now:

Coronado Global Resources Inc (ASX: CRN)

The ASX 200 coal stock to buy according to Bell Potter is Coronado Global Resources.

It is expecting the coal miner to report a strong quarterly update later this month. It commented:

Curragh’s operational performance should have strengthened materially in Q2 2024, the first full quarter post substantial pre-strip investment over the past 24 months. We forecast Curragh mining costs of ~US$100/t (Q1 US$127/t) and saleable production of 2.8Mt (Q1 2.5Mt). At Buchanan, higher hoisting rates will provide an additional group production uplift. However, CRN’s operational enhancements will be offset by a 21% qoq fall in the average quarterly HCC benchmark price.

In light of the above and its positive outlook of metallurgical coal, the broker has retained its buy rating and lifted its price target to $1.85 (from $1.60). Based on its current share price of $1.40, this implies potential upside of 32% for investors.

And while dividends are likely to be small this year, the broker expects a mammoth 10% dividend yield in FY 2025. It concludes:

Throughout 2024, CRN should realise improved production volumes and subsequent cost benefits following the self-funded investment across its Australian and US operations. We expect CRN to generate improved free cash flow and shareholder returns going forward. Our buy recommendation is underpinned by a supply constrained met coal environment, supporting long term prices. We see the potential for CRN to participate in industry consolidation.

Whitehaven Coal Ltd (ASX: WHC)

Bell Potter isn’t feeling as positive about ASX 200 coal stock Whitehaven Coal due to its current valuation.

This morning, it has retained its hold rating but lifted its price target to $8.90 (from $7.70). This suggests that upside of just 2.7% is possible from current levels.

In addition, a 2% dividend yield is expected in FY 2024 and then a 3% yield is forecast for FY 2025. It commented:

WHC has diversified its commodity exposure and risk profile, through its ownership of large Queensland met coal assets. We hold a positive long term met coal outlook, driven by constrained supply and robust steel demand. While the company’s free cash profile out to FY27 is restricted by significant acquisition-related cash outlays, we expect it to maintain a dividend payout of 20-50% of NPAT from its NSW operations. We retain our Hold recommendation in line with our recommendation structure.

The post 1 ASX 200 coal stock to buy and 1 to hold appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• ASX 200 coal stocks in focus as wind power fades to a breeze
• Here’s how the ASX 200 market sectors stacked up last week
• Best 5 ASX 200 energy shares for price growth in FY24
• 3 high-flying ASX 200 stocks leading the charge into FY 2025

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.

If you’re building an income portfolio, then it could be worth looking at the ASX 200 dividend stocks named below.

Here’s why they could be good options for income investors this month:

Cedar Woods Properties Limited (ASX: CWP)

Morgans thinks this property company could be a good ASX 200 dividend stock to buy.

The broker highlights that “CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow.”

It expects this to support the payment of dividends per share of 18 cents in FY 2024 and then 20 cents in FY 2025. Based on the current Cedar Woods Properties share price of $4.80, this equates to dividend yields of 3.75% and 4.15%, respectively.

Morgans has an add rating and $5.60 price target on its shares.

Coles Group Ltd (ASX: COL)

Another ASX 200 dividend stock that has been named as a buy is Coles. It is one of the big two supermarket operators with over 800 stores across Australia. In addition, the company has a liquor network comprising almost 1,000 stores across several brands and joint ownership of the Flybuys loyalty program.

Morgans is also feeling positive about Coles and sees it as a great option for income investors. This is due partly to its cost reduction plans and stronger than expected sales growth.

As for dividends, the broker is forecasting fully franked dividends of 66 cents per share in FY 2024 and 69 cents per share in FY 2025. Based on the current Coles share price of $17.35, this will mean dividend yields of 3.8% and 4%, respectively.

Morgans has an add rating and $18.95 price target on its shares.

Telstra Group Ltd (ASX: TLS)

Goldman Sachs is feeling even more positive about this telco giant after an update this week and sees it as an ASX 200 dividend stock to buy.

It notes that Telstra’s price increase update “highlight: (1) mobile market rationality remains (particularly when combined with the recent Optus increase); (2) TLS mobile earnings growth remains strong, driven by subscribers and ARPU.”

The broker believes this will now underpin fully franked dividends of 18 cents per share in FY 2024 and then 19 cents per share in FY 2025. Based on the current Telstra share price of $3.82, this equates to yields of 4.7% and 5%, respectively.

Goldman has a buy rating and $4.30 price target on Telstra’s shares.

The post Buy Coles and these ASX 200 dividend stocks in July appeared first on The Motley Fool Australia.

More reading

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• Telstra stock pays a massive 7% dividend, and now could be a great time to buy
• Here are the top 10 ASX 200 shares today
• Why Catalyst Metals, Imugene, Red 5, and Telstra shares are pushing higher today
• Top brokers name 3 ASX shares to buy today

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 Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Coles Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There could be some big returns on offer in the tech sector still according to analysts at Goldman Sachs.

One such example is ASX tech stock CAR Group Limited (ASX: CAR).

What is the broker saying about this ASX tech stock?

According to a note out of the investment bank this morning, its analysts believe the auto listings company is well-placed for strong growth over the coming years despite some foreign exchange and Trader Interactive (TI) headwinds. It commented:

We revisit the near-term earnings outlook for CAR ahead of FY24 results, noting recent investor queries around: (1) US and AU dealer health; (2) FX; and (3) potential M&A. Overall, we remain confident that despite spot FX and TI dealer headwinds, CAR is well-placed to continue delivering ‘good’ earnings growth (i.e. > 10% EBITDA) & remains our preferred classified into earnings.

Goldman also highlights that the ASX tech stock’s Australian business is performing strongly despite a challenging ad-market. It said:

AU trends remain robust, particularly in used, with volumes (> 95% of total) remaining solid (Ex 4-7); pricing power continues (i.e. 5-6% price increase in private, we expect 4-5% dealer increase in Sept, as used dealer margins remain strong & CAR didn’t increase materially through covid), while media revenues are supported by healthy new car volumes despite the challenging ad-market. With elevated CAR domestic opex growth in 1H24 (13.4%), there is also scope to slow investment and maintain double digit EBITDA growth.

Big returns

In light of the above, the broker has reaffirmed its buy rating on the ASX tech stock with an improved price target of $41.40. Based on its current share price of $34.76, this implies potential upside of 19.1% for investors over the next 12 months.

In addition, Goldman Sachs is forecasting partially franked dividend yields of 2.1% in FY 2024 and 2.3% in FY 2025. This brings the total potential 12-month return beyond 21%, which is more than double the historical return of the share market.

Goldman then concludes by summarising its buy thesis. It said:

Carsales is the largest Auto classified domestically, in addition to having strong international operations in Korea, US (Non-auto) and LATAM. We are Buy rated on CAR as we are increasingly confident in the company’s earnings momentum (both locally & globally) – forecasting +11% EPS CAGR across FY24-27E. Downside risks include: (1) Global macro trends; (2) dealer relationships; (3) FX exposure.

The post Buy this ASX tech stock for a 20%+ return: Goldman Sachs appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• The best ASX 200 share of each market sector in FY24
• Can ASX 200 tech shares produce another strong performance in FY25?
• 10 ASX shares that have raised dividends for a decade

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 Goldman Sachs Group. The Motley Fool Australia has recommended Car Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX retail shares had a pretty decent year in FY24, with the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) rising 19.29% over the 12 months.

Does that strike you as strange? In the middle of a cost-of-living crisis?

Consumers have been cutting back big-time on their discretionary spending for many months now, yet ASX retail shares went up in FY24 at more than twice the pace of the benchmark index.

The S&P/ASX 200 Index (ASX: XJO) rose by 7.83% in FY24, or 12.1% if you include dividends.

So, why did this happen?

Why did ASX retail shares rise during a cost-of-living crisis?

David Rumbens, a partner at Deloitte Access Economics, has an answer for us.

In a blog, Rumbens explained why discretionary stocks defied sticky inflation and high interest rates in FY24 to rise by more than 19%.

Rumbens said:  

Consumer discretionary stocks defied expectations by posting a 19% increase despite the economy experiencing per-capita recession.

This unexpected strength largely came from the first nine months of the financial year where consumer savings were being run down.

Ah-ha! Housing savings.

Household savings reached a historical peak during the COVID years. The household saving ratio, which means the percentage of income saved, hit an all-time high of 24% in the June 2020 quarter, according to data from the Australian Bureau of Statistics (ABS).

This happened for three reasons.

Firstly, we weren’t spending much during lockdowns.

Secondly, many Australians received generous government stimulus payments, such as a beefed-up JobSeeker payment and the JobKeeper payment.

Thirdly, emergency low interest rates during the pandemic meant many households with mortgages saved money and left it in their offset accounts.

A saving grace for the economy

This major increase in household savings has turned out to be a massive saving grace for our economy.

This is because what followed COVID was initially unexpected.

As the world reopened and inflation started rising, many economists and central banks predicted the inflation spike would be “transitory” and not too big a deal.

But it turned out to be a big deal.

Inflation hit a peak of 7.8% in Australia in the December 2022 quarter as the cost of living skyrocketed.

Between May 2022 and November 2023, the Reserve Bank of Australia (RBA) raised interest rates 13 times.

So, those pandemic savings are certainly coming in handy for struggling households today. Not only are they enabling people to continue spending at the shops, they’re also protecting home values, too.

You see, despite home loan repayments increasing by 30% to 60% since May 2022, home loan arrears are still very low, according to the RBA. That means not too many people are being forced to sell, and that protects the market by keeping supply in check.

In its latest Financial Stability Review, the RBA noted that pandemic savings were a key factor enabling borrowers to keep up with their repayments.

The RBA said:

Households are coping well due to a strong labour market, which is allowing them to increase their hours or get a second job if necessary.

They are also drawing on large savings buffers, partly created by pandemic stimulus and lower spending during lockdowns, and have reduced their discretionary spending as necessary.

The bank noted that about half of all borrowers had enough savings to pay their loans and cover the cost of essential living expenses for at least six months.

Another factor supporting ASX retail shares in FY24 was the ongoing spending among baby boomers.

CommBank research shows the baby boomers are still spending pretty freely at the shops, despite the cost of goods and services, like travel, going up.

The boomers are one of the biggest population cohorts in Australia’s history, so the fact this group is still spending is helpful for retailers in a cost-of-living crisis.

Best 3 ASX retail shares of FY24

Here are the best ASX 200 retail shares of FY24 based on share price growth, according to data from S & P Global Market Intelligence.

Lovisa Holdings Ltd (ASX: LOV)

Budget jewellery retailer Lovisa led the consumer discretionary stocks in FY24 with a 70.3% share price gain. The Lovisa share price closed the session on Thursday at $32.34, down just 0.03%.

Premier Investments Limited (ASX: PMV)

The second top-performing ASX 200 retail share in terms of share price growth was Premier Investments, up 53.8% over the 12 months. The Premier Investments share price closed at $29.89 yesterday, up 0.88%.

JB Hi-Fi Ltd (ASX: JBH)

The JB Hi-Fi share price gained 39.9% over FY24. The ASX retail share closed at $65.25 yesterday, up 1.34%.

The post Why did ASX retail shares rise 19% in FY24 amid a cost of living crisis? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• JB Hi-Fi shares leap to record high despite legal scuffle
• CBA and 7 other ASX 200 shares smashing new highs on Thursday
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bronwyn Allen 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 Lovisa. The Motley Fool Australia has recommended Jb Hi-Fi, Lovisa, and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX lithium shares have suffered greatly over the past year or two, but now some experts think there could be opportunities within the ASX mining share sector.

The S&P/ASX 200 Index (ASX: XJO) offers many different potential investment options, including the major iron ore miners, BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Fortescue Ltd (ASX: FMG).

According to reporting by the Australian Financial Review, mining-focused fund managers are looking beyond the ASX iron ore shares to find the next stage of returns, so those experts are digging into other sub-sectors of the ASX materials sector.

Experts say ASX mining shares are great value

Ben Cleary, the portfolio manager of Tribeca’s Global Natural Resources fund, told the AFR:

Resources equities are just screaming value. While I think rate cuts are on the horizon, they aren’t necessarily needed for the commodities equities to perform strongly in the second half, but it’ll certainly help.

In terms of lithium, Janus Henderson’s Global Natural Resources Fund portfolio manager, Darko Kuzmanovic, is bullish on the battery metal and has been buying shares of Mineral Resources Ltd (ASX: MIN) and Pilbara Minerals Ltd (ASX: PLS).

Janus Henderson is excited by signs that electric vehicle sales in China are increasing, according to the AFR. Kuzmanovic said:

Lithium could be a surprise into the end of 2024, as lithium equities are trading at levels that imply the whole EV transition is over.

The groundwork is set for a strong rebound in resources equities and commodity prices over the next few months into year’s end.

Another expert who’s bullish on lithium is Ethical Partners investment director Nathan Parkin, who had this to say:

We like the lithium sector. The underlying fundamentals are still quite strong, but there has just been lots of noise that people put a lot of weight on, but our view is that you can look through that noise.

Ethical Partners owns IGO Ltd (ASX: IGO) shares as one of its main positions. With the ASX lithium share’s cash costs below spot prices. Parkin suggested IGO can keep making money even if prices drop further.

Are there any other commodities opportunities?

The copper price has reduced from its all-time high of US$11,000 per tonne earlier this year. Cleary is optimistic about copper and thinks prices will need to increase again to incentivise enough supply to meet the strong demand amid global decarbonisation.

The Tribeca resources fund has invested in Sandfire Resources Ltd (ASX: SFR) as one of the opportunities in that space.

The post Is it time to dive back into ASX lithium shares? appeared first on The Motley Fool Australia.

More reading

• Buy this ASX lithium stock and sell this one
• 5 things to watch on the ASX 200 on Friday
• Fortescue shares in focus as more ‘spying’ details emerge
• The 5 most popular ASX shares bought by investors
• Why ASX investors are ‘flocking back’ to BHP shares and these other top stocks

Motley Fool contributor Tristan Harrison has positions in Fortescue. 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.