Category: Stock Market

It will be another busy day of the February ASX earnings season today. Many ASX shares from various sectors are ready to bare all in their latest half-yearly reports.

Will their shareholders be impressed or distressed?

Here’s a summary of which companies are releasing results to get you prepared for the day ahead.

ASX shares lined up to report today

Ranked in order of market capitalisation (largest to smallest)

National Australia Bank Ltd (ASX: NAB), $95.2 billion

Telstra Ltd (ASX: TLS), $47.8 billion

Goodman Group (ASX: GMG), $37.3 billion

Newcrest Mining Ltd (ASX: NCM), $21.7 billion

South32 Ltd (ASX: S32), $21.1 billion

Sonic Healthcare Limited (ASX: SHL), $14.0 billion

ASX Ltd (ASX: ASX), $13.6 billion

Origin Energy Ltd (ASX: ORG), $12.3 billion

Whitehaven Coal Ltd (ASX: WHC), $7.3 billion

Incitec Pivot Ltd (ASX: IPL), $6.8 billion

Evolution Mining Ltd (ASX: EVN), $5.6 billion

AMP Ltd (ASX: AMP), $4.0 billion

Super Retail Group Ltd (ASX: SUL), $2.7 billion

Abacus Property Group (ASX: ABP), $2.6 billion

Charter Hall Retail REIT (ASX: CQR), $2.4 billion

Bapcor Ltd (ASX: BAP), $2.1 billion

Domain Holdings Australia Ltd (ASX: DHG), $1.9 billion

Magellan Financial Group Ltd (ASX: MFG), $1.7 billion

Hotel Property Investments Ltd (ASX: HPI), $699.5 million

Beacon Lighting Group Ltd (ASX: BLX), $453.3 million

Southern Cross Media Group Ltd (ASX: SXL), $270.0 million

To view the complete agenda for the reporting season, check out our calendar here.

What can we expect to see?

There’s a good chance NAB’s half-year results will draw a crowd today following the severe reaction to the earnings of the Commonwealth Bank of Australia (ASX: CBA) yesterday. The NAB share price fell 4.1% in tandem with the other major banks, but will it deliver a pleasant surprise today?

Investors will be looking for strength in the bank’s net interest margin and a positive outlook on the containment of bad debts. Additionally, a decent bump up in dividends wouldn’t go astray after CBA increased its interim payment by 20%.

Another ASX share that will be under interrogation today is Australian fund manager Magellan Financial Group. The company’s share price has been slaughtered since February 2020, falling 85% as funds flew out the door.

Today, onlookers will be hoping for some further affirmation that things are beginning to turn around. In January, funds under management improved — but that was due to the value of the assets rising, rather than additional inflows.

According to Bloomberg estimates, Magellan could report $105.7 million in net profit after tax (NPAT) today. If this were to be the case, it would represent a 58% decrease from the prior corresponding period.

The post Earnings preview: Here are the ASX shares reporting on Thursday appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Will ASX 200 shares crash in 2023?
• ASX 200 in freefall as CBA’s prediction of a soft landing might have just been torpedoed by huge interest rate call
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping

Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank Of Australia and Sonic Healthcare. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group. The Motley Fool Australia has positions in and has recommended Hotel Property Investments, Super Retail Group, and Telstra Group. The Motley Fool Australia has recommended Bapcor, Goodman Group, and Sonic Healthcare. 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 Fortescue Metals Group Limited (ASX: FMG) share price dropped 0.8% yesterday after reporting its FY23 half-year result.

With such a muted response, it seems the result wasn’t much of a surprise. We had already seen some of the numbers with the miner’s quarterly update for the three months to 31 December 2022.

Earnings recap

Let’s remind ourselves about the half-year highlights.

There was a slight reduction in revenue; it dropped 4% to US$7.8 billion. Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped 9% to US$4.35 billion, with an EBITDA margin of 56% (down from 59%).

Net profit after tax (NPAT) fell by 15% to US$2.37 billion, which led to the interim dividend being cut by 13%, though the dividend payout ratio was also reduced to 65% (down from 70%).

Fortescue’s total debt was almost unchanged, but the net debt increased by $1.2 billion after a decrease in the cash balance.

The ASX 200 miner also noted a number of areas of progress for Fortescue Future Industries (FFI), including advancing the Holmaneset project in Norway, which could unlock a 300MW green hydrogen and green ammonia facility and support infrastructure.

What to make of this result?

Yesterday, The Australian reported on comments by Moody’s Investors Service analyst David Xu, who said:

Although lower than the prior year, earnings were still solid, underpinned by good operational performance and elevated realized iron ore prices.

Similar to industry peers, Fortescue’s operating costs have risen on inflationary pressures. However, Fortescue’s cost position remains low for the sector, providing a good buffer against further downside risk to iron ore prices.

Although net debt increased, Fortescue’s balance sheet remains solid with good liquidity and low financial leverage, providing the company with capacity to fund its upcoming capital expenditure.

While not exactly a ringing endorsement, it seems like the result was solid enough for the Fortescue share price to hang onto its gains from the last few months.

Is the Fortescue share price a buy?

The business has benefited from the higher iron ore price thanks to optimism about China’s reopening after COVID-19 lockdowns.

Time will tell whether the iron ore price can help drive Fortescue shares higher, or lower.

But, with the things that the business can control, it’s doing well. In the FY23 first half, the amount of iron ore shipped increased by 4% to 96.9 mt.

I’m particularly excited by the company’s potential with its green energy and green products.

The company noted that Fortescue Future Industries (FFI) achieved a “significant breakthrough” in the pursuit of green iron ore by successfully processing 150kg of iron ore to make metallic iron that could pave the way for the production of green iron at scale.

It has also entered an agreement with Baker Hughes to jointly explore opportunities for the scale-up and adoption of technology solutions for green hydrogen, green ammonia, and geothermal products. The company has also made an investment in Fabrum, a company that’s developing “world-leading” applications for hard-to-abate sectors like mining, heavy transport, and aviation.

While I wouldn’t say that Fortescue is fantastic value, nor do I think the Fortescue share price would be the best choice today, I still think the future is positive for the company.

The post Should I buy Fortescue shares following the ASX 200 miner’s latest results? appeared first on The Motley Fool Australia.

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More reading

• Here’s what you need to know about the latest Fortescue dividend
• Fortescue share price sinks amid 13% dividend cut
• Earnings preview: Here are the ASX shares reporting on Wednesday
• Here’s the iron ore price forecast for 2023: CBA
• Better buy: Fortescue vs BHP shares

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. 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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Russia’s invasion of Ukraine last year brought home the stark reality of how brittle energy security is.

With Europe scrambling to replace their gas and petroleum import channel from Russia, energy prices went through the roof.

This accelerated the development of renewable energy projects around the globe. But those efforts take years before meaningful contributions are brought to the energy pool.

Therefore, after years of being out of favour, old sources like nuclear and coal were forced to be deployed to make up for the shortfall.

And this trend doesn’t look like it will end anytime soon.

“We think the outlook for energy stocks is attractive because there’s just not a lot of supply coming in,” Schroders portfolio manager Ray David told The Motley Fool last month.

“No one really wants to invest in fossil fuels or LNG or gas without the high prices to justify the returns, because everyone’s quite worried about renewables and the ESG factors.”

This means that existing producers can cash in big time.

If you’re interested in investing in this area, Glenmore Asset Management portfolio manager Robert Gregory named three ASX shares that he’s backing:

3 stocks to buy in a buoyant energy sector

The Stanmore Resources Ltd (ASX: SMR) share price lifted a whopping 15.9% last month.

But for Gregory, the stock still presents value.

“There was no news released. However, the company was likely assisted by a ~12% increase in the hard coking coal price,” he said in a memo to clients.

“The stock continues to look attractive based on its free cash flow generation, cheap valuation metrics and low cost of production.”

Stanmore shares have rocketed up 250% over the past 12 months.

Bowen Coking Coal Ltd (ASX: BCB) saw opposite fortunes in January, with the stock dropping 12.1%.

“Wet weather in Queensland, where Bowen Coking’s mines are located, caused some production issues and also at the Dalrymple Bay Coal Terminal (DBCT) where BCB exports coal through.”

The effect is expected to be temporary, though, according to Gregory.

“Whilst the rain had caused some operational issues, the impact was not overly severe and that mining has recommenced at Broadmeadow East and Bluff, the latter which has been assisted by water management initiatives.”

The Bowen Coking stock price is currently 42.5% higher than it was a year ago.

Perhaps the best known out of Gregory’s coal picks, Whitehaven Coal Ltd (ASX: WHC) saw its shares tumble 10.8% to start the year.

That drop in valuation was largely tied to commodity prices.

“The main driver in the month for the stock price was the -35.2% fall in the thermal coal price, albeit from very elevated levels.”

The December quarter result was “in line with market expectations”, said Gregory. 

“With the report, Whitehaven Coal said it expects 1H23 EBITDA of $2.6 billion, versus $0.6 billion in the prior comparable period.”

The post ‘Looks attractive’: Fund names 3 ASX shares to buy for the energy crisis appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 energy stocks like Woodside having such a stellar start to the week?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• New Hope share price dives 9% as ASX 200 coal stocks get hit hard

Motley Fool contributor Tony Yoo 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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True long-term investment means buying ASX shares of businesses that have excellent business prospects, regardless of recent stock price movements.

This philosophy is, as they say, simple but not easy.

It’s especially difficult for amateur and professional investors alike when the stock price is haemorrhaging in the short term.

And that’s fair enough. It’s only human nature not to want to put money into losing assets.

But if you can act completely rationally, those could be the best buying opportunities ever.

The team at ECP Growth Companies Fund this week named two of its S&P/ASX 200 Index (ASX: XJO) holdings that are exactly in that position:

Don’t be distracted by the current troubles

Nothing personifies recent strugglers more than technology company Megaport Ltd (ASX: MP1).

As a cash-burning growth business, the share price has taken an absolute battering.

Over the past 12 months, the stock has more than halved its value. Going back to November 2021, Megaport shares have lost an agonising 72%.

The stock price for the network-as-a-service provider again struggled in January.

ECP analysts, in a memo to clients, attributed this to a “mixed” quarterly update.

“Underlying port growth, a leading indicator for services, grew 30% quarter on quarter, though net ports only grew 2%,” read the memo.

“Customers have started consolidating ports to larger ports (10GB to 100GB), giving them the ability to add more services to less ports.”

This trend is painful for the immediate balance sheet, admitted the ECP fund managers, but a “net positive” in the long term.

Ultimately the business is heading towards spending less cash than it earns.

“The company has maintained their EBITDA positive run rate and expects this to extend to the full year,” read the memo.

“Price increases and reduced costs also [bring] forward free cash flow positivity in our estimation.”

‘One of the highest quality travel companies in the world’

Although the Corporate Travel Management Ltd (ASX: CTD) share price gained almost 25% in January, it is still down 25% over the past year.

The simple fact is that the ECP team is happy to have this one in the portfolio, regardless of what the stock price has done in recent times.

“Corporate Travel Management remains one of the highest quality travel companies in the world,” read its memo.

“And [it] is well positioned to benefit from a continued recovery in underlying travel volumes and expansion into new markets and regions.”

The analysts admitted there is some short-term risk, but the longer-term trajectory is heading in the right direction.

“While there is still uncertainty related to the outlook for US and European travel volumes, the market in Australia — and to a lesser [extent] Asia — is still growing strongly, with domestic travel volumes leading the way.”

Other professionals generally agree.

According to CMC Markets, seven out of 11 analysts currently covering Corporate Travel recommend it as a strong buy.

The post Buy these 2 struggling ASX 200 shares now while they’re cheap: fund appeared first on The Motley Fool Australia.

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More reading

• ASX 200 in freefall as CBA’s prediction of a soft landing might have just been torpedoed by huge interest rate call
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• Corporate Travel share price tumbles despite record earnings forecast
• Here are the top 10 ASX 200 shares today
• Here are the 10 most shorted ASX shares

Motley Fool contributor Tony Yoo has positions in Corporate Travel Management and Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has recommended Corporate Travel Management and Megaport. 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 looking for ASX 200 dividend shares to power up your passive income, then you may want to look at the two listed below.

Here’s why analysts at Morgans rate these high yield ASX 200 dividend shares highly:

Santos Ltd (ASX: STO)

The first ASX 200 dividend share that could be a buy is Santos.

It is one of the region’s largest energy producers and the owner of a collection of high quality operations that delivered production of 103 million barrels of oil equivalent (mmboe) in 2022.

The team at Morgans is positive on the company due to its growth prospects and diversified earnings base. It believes this leaves Santos “positioned to flex its cash dividends and buybacks.”

The broker currently has an add rating and $8.75 price target on them.

In respect to dividends, Morgans is expecting fully franked dividends per share of 28 US cents (40.6 Australian cents) in FY 2023 and 30 US cents (43.5 Australian cents) in FY 2024. Based on the current Santos share price of $7.06, this will mean yields of 5.75% and 6.2%, respectively.

QBE Insurance Group Ltd (ASX: QBE)

Another ASX 200 dividend share that Morgans is tipping as a buy is insurance giant QBE.

The broker is feeling positive about the company’s outlook thanks to “strong rate increases still flowing through QBE’s insurance book, and further cost-out benefits to come.” Overall, its analysts expect the company’s “earnings profile to improve strongly over the next few years.”

Morgans also believes its shares are “relatively inexpensive” and has an add rating and $15.05 price target on them.

As for dividends, Morgans is forecasting a 76 cents per share dividend in FY 2023 and then an 85 cents per share dividend in FY 2024. Based on the latest QBE share price of $13.27, this equates to yields of 5.7% and 6.4%, respectively.

The post Power up your passive income with these high yield ASX dividend shares: expert appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Santos share price lifting on Tuesday?
• 5 things to watch on the ASX 200 on Tuesday
• Even Joe Biden sees a lengthy future for ASX 200 oil stocks

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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was well and truly out of form and sank deep into the red. The benchmark index fell 1.05% to 7,352.2 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market is expected to rebound on Thursday following a relatively positive night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 27 points or 0.4% higher this morning. In late trade in the United States, the Dow Jones is down 0.1%, the S&P 500 has risen 0.1% and the NASDAQ has pushed 0.75% higher.

Telstra half-year results

The Telstra Group Ltd (ASX: TLS) share price will be on watch when the telco giant releases its half year results. According to a note out of Goldman Sachs, it is tipping Telstra to positively surprise with its results. It said: “We expect TLS to deliver a solid result (GSe +2% vs. 1H23 VA Consensus EBITDA), with top line momentum more than offsetting the higher costs.” This will mean EBITDA of $3.9 billion compared to the consensus estimate of $3.82 billion. Goldman also expects an 8.5 cents per share interim dividend.

Oil prices edge higher

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a decent session after oil prices rose on Wednesday night. According to Bloomberg, the WTI crude oil price is up 0.1% to US$79.10 a barrel and the Brent crude oil price is up 0.3% to US$85.80 a barrel. A positive demand outlook offset news of a build-up of US inventories.

NAB Q1 update

The National Australia Bank Ltd (ASX: NAB) share price will be hoping for a better session on Thursday after falling 4% yesterday. The banking giant is releasing its first quarter update today and investors will no doubt be looking for signs that its net interest margin has not peaked as many now fear after the Commonwealth Bank of Australia (ASX: CBA) results.

Gold price falls to one-month low

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a poor session after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.95% to US$1,847.8 an ounce. The precious metal has hit a one-month low after the US dollar strengthened.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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More reading

• Will ASX 200 shares crash in 2023?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Should I buy Endeavour shares following the ASX 200 company’s stellar results?
• ASX 200 in freefall as CBA’s prediction of a soft landing might have just been torpedoed by huge interest rate call
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping

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 positions in and has recommended Telstra Group. 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 building a retirement portfolio, you’ll no doubt be wanting to fill it with quality ASX shares that pay dividends and have positive long term outlooks.

Well, two ASX shares that tick these boxes are listed below. Here’s why analysts rate them as buys:

Charter Hall Long WALE REIT (ASX: CLW)

The first ASX share for investors to consider for a retirement portfolio is the Charter Hall Long Wale REIT.

This is a property company that invests in high quality real estate assets that have long weighted average lease expiries (WALEs). These properties are leased mainly to corporate and government tenants and had a WALE of 11.8 years and a 99.9% occupancy rate when it reported its half year results this month.

That result went down well with analysts at Citi. In response, the broker has retained its buy rating with a $5.00 price target. It commented:

We re-iterate our Buy rating on CLW, with rising inflation providing a tailwind to revenue, a 6.1% FY23 dividend yield, and a- 25% discount to NTA (book value), despite c. 50% of income linked to inflation (meaning some protection to book values).

Citi expects this to underpin dividends per share of 28 cents in FY 2023 and 29 cents in FY 2024. Based on the current Charter Hall Long Wale REIT unit price of $4.59, this will mean yields of 6.1% and 6.3%, respectively.

Transurban Group (ASX: TCL)

Another ASX share for investors to consider for a retirement portfolio is Transurban.

It is a leading toll road operator with a portfolio of important roads in Australia and North America, as well as a significant project pipeline. The latter could be very supportive its growth in the future.

It also recently released its first half results and revealed that its roads are booming again after a difficult time during the pandemic. The company commented:

Record traffic volumes with Average Daily Traffic (ADT) exceeding 2.5 million trips for the first time in November 2022. Traffic volumes were supported by record traffic in Sydney and Brisbane, freight traffic and weekend travel

Macquarie was pleased with what it saw and retained its outperform rating with an improved price target of $14.51.

In addition, the broker is now forecasting dividends per share of 57 cents in FY 2023 and then 61 cents in FY 2024. Based on the current Transurban share price of $13.93, this will mean yields of 4.1% and 4.4%, respectively.

The post 2 excellent ASX shares to buy for a retirement portfolio: experts appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Analysts say these growing ASX 200 dividend shares are top buys for income investors
• Guess which ASX 200 giant is aiming to grow its dividends by 39% in FY23
• 2 ASX 200 REITs on the rise following earnings updates
• Expect big yields from these ASX 200 dividend shares in 2023: analysts

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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The S&P/ASX 200 Index (ASX: XJO) followed Tuesday’s pop with an 1.06% drop on Wednesday, falling to close at 7,352.2 points.

It came amid a deluge of earnings from some of the market’s biggest names including Wesfarmers Ltd (ASX: WES), Commonwealth Bank of Australia (ASX: CBA), Cochlear Limited (ASX: COH), and Fortescue Metals Group Limited (ASX: FMG).

Weighing on the market today was the massive S&P/ASX 200 Financials Index (ASX: XFJ). It tumbled 3.4% as the big four banks weighed heavily, led by the CBA share price’s 5.7% fall.

The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) also had a rough session, dropping 1.4%.

Meanwhile, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) was among the top-performing sectors today, rising 0.5% with earnings from Wesfarmers and GUD Holdings Limited (ASX: GUD).

And I can tell you today’s top-performing ASX 200 stock is at home on the consumer discretionary section. Let’s take a look at what drove it sky-high on Wednesday.

Top 10 ASX 200 shares countdown

Today’s biggest gains came from casino operator Star Entertainment Group Ltd (ASX: SGR). Its share price rocketed 14.4% in a partial recovery from recent losses.

The stock dived 20.8% on Monday on the back of a disappointing earnings update. It followed that up with a 13.5% tumble yesterday.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Star Entertainment Group Ltd (ASX: SGR)	$1.47	14.4%
GUD Holdings Limited (ASX: GUD)	$8.94	8.1%
Cochlear Limited (ASX: COH)	$225.28	7.75%
Magellan Financial Group Ltd (ASX: MFG)	$9.45	7.14%
New Hope Corporation Ltd (ASX: NHC)	$5.73	5.91%
Whitehaven Coal Ltd (ASX: WHC)	$8.19	3.54%
Paladin Energy Ltd (ASX: PDN)	$0.79	3.27%
Collins Foods Ltd (ASX: CKF)	$8.58	3.13%
Reliance Worldwide Corporation Ltd (ASX: RWC)	$3.49	2.95%
Healius Ltd (ASX: HLS)	$2.82	2.92%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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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 positions in and has recommended Cochlear, Collins Foods, and Reliance Worldwide. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Cochlear, Collins Foods, and Reliance Worldwide. 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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After a breathtaking run over January, the BetaShares Nasdaq 100 ETF (ASX: NDQ) has been taking a bit of a breather of late. BetaShares Nasdaq 100 units rose from $24.60 in late December to $28.32 by 8 February – a gain of more than 13.5% in just over a month.

But since 8 February, investors have cooled off a little on this ASX exchange-traded fund (ETF). As it stands today, the BetaShares Nasdaq ETF is currently at $27.95 per unit, down more than 1.3% from its early February high:

So does this fall in value make the Nasdaq 100 ETF a no-brainer buy for ASX investors today?

Tech, tech and more tech

Well, let’s backtrack a little. The BetaShares Nasdaq 100 ETF is an index fund. But it doesn’t hold or track ASX shares. Instead, it holds 100 of the largest US shares listed on the American NASDAQ stock exchange. The NASDAQ is known for being the exchange that most tech companies choose to list on.

As such, its largest holdings are the US tech giants we all know and may, or may not, love. These include Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Amazon.com Inc (NASDAQ: AMZN), and Netflix Inc (NASDAQ: NFLX). Not to mention the likes of Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Tesla Inc (NASDAQ: TSLA), and Starbucks Corporation (NASDAQ: SBUX).

So the performance of the BetaShares Nasdaq ETF largely rides or dies on the performance of these companies.

Some of these names have indeed had a rough February thus far. There was the interesting debacle that was Alphabet’s artificial intelligence display last week, which has seen the company lose around 12% of its value over the past week for one.

But Amazon has also seen its share price cool off this month. It’s probably these two US tech giants that are responsible for the pullback we have seen in the unit price of the BetaShares Nasdaq 100 ETF.

So this brings us to the question of whether this ETF is in the buy zone today.

Why the BetaShares Nasdaq ETF’s pain is our gain

Well, I think it is. An investment in the NASDAQ is an investment in American tech. And American tech has led the way for global innovation over the past two to three decades. I think companies like Apple, Tesla, Netflix, Alphabet, and Amazon will be larger, healthier, more dominant and more profitable in ten years’ time than they are today.

I can’t see a scenario where a competitor comes in and takes Apple’s place at the top of the world’s consumer electronics market.

Or dents the incredible market share that Alphabet’s Google has in search.

Or Amazon’s incredibly dominant e-commerce platform (not to mention its cloud-based AWS division).

An investment in the BetaShares Nasdaq ETF would have been incredibly lucrative ever since this ETF was first listed. Since its inception in 2015, investors have enjoyed an average annual return of 15.65% per annum.

In my view, all of this adds up to a buying opportunity for the BetaShares Nasdaq 100 ETF today.

The post Does the BetaShares Nasdaq 100 ETF share price fall make it a no-brainer buy? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon.com, Apple, Microsoft, Netflix, Starbucks, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon.com, Apple, BetaShares Nasdaq 100 ETF, Microsoft, Netflix, Starbucks, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple, short April 2023 $100 calls on Starbucks, and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Netflix, and Starbucks. 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 S&P/ASX 200 Index (ASX: XJO) share market is facing an uncertain time for the rest of 2023.

While the market fell in 2022, it essentially recovered all of that lost ground in January 2023 after gaining 6%.

But, since early February, ASX 200 shares have been drifting lower.

Let’s look at some of the opposing thoughts on the situation.

Optimistic case for ASX 200 shares

I think that when the market becomes scared, the sell-off usually happens when uncertainty is at its highest. By uncertainty, I don’t mean how bad things are, I mean when it’s not clear how bad things will become.

For example, the worst of the COVID-19 crash was in March 2020, even though deaths and lockdowns persisted for a long time after that.

Last year, the ASX 200 hit lows in June 2022 and at the end of September 2022. But, even though interest rates are much higher than in June and September, the share market has recovered. Investors have already gotten used to the high inflation story and are now focusing on the recovery.

Over time, many ASX 200 shares have shown they can grow profit to new records, which makes me believe plenty of them can grow profit into the future. This thought can help investors remain positive.

Investing is a long-term endeavour, so the short term isn’t that important. But businesses like Wesfarmers Ltd (ASX: WES) and JB Hi-Fi Limited (ASX: JBH) are still reporting sales growth in January 2023. The Commonwealth Bank of Australia (ASX: CBA) result also showed another increase in net profit after tax (NPAT) thanks to stronger lending profits.

With the ASX 200 being weighted to banks like CBA and resource businesses like BHP Group Ltd (ASX: BHP), the index could be protected in 2023 by the banks’ higher lending profits and strong resource prices (thanks to Chinese demand).

Bearish case

On the other hand, there’s no guarantee that the ASX 200 will continue to perform.

On the resource side of things, China is reportedly not seeing a major upswing with its economy (yet), despite ending lockdowns. CNBC reported that there has been a “sharp drop in loans to households” year over year. The chief China economist of financial group Nomura, Ting Lu, said: “The mixed data send a clear message that markets should not be too bullish about growth this year.”

With how important mortgage demand is for the construction sector in China, which uses a lot of steel/iron, it could imply that the iron ore price has risen too far.

Another negative factor could be that interest rates could continue to rise, further than some ASX 200 share investors are expecting.

The Australian Financial Review reported on Reserve Bank of Australia (RBA) governor Philip Lowe’s comments to Senate estimates that people on fixed-rate loans who didn’t use low rates to build up savings are in for “a lot more difficulty”.

In the latest RBA monthly interest rate increase, Dr Lowe said that Australian CPI inflation for the three months to December 2022, in underlying terms, was 6.9%, which was higher than expected. The RBA board expects that “further increases in interest rates will be needed over the months ahead”.

In the US, inflation rose in January by 0.5% after a 0.1% increase in December, according to reporting by CNBC. This was also more than expected. The Dallas Fed President Lorie Logan said:

We must remain prepared to continue rate increases for a longer period than previously anticipated, if such a path is necessary to respond to changes in the economic outlook or to offset any undesired easing in conditions.

Higher interest rates could be bad news for a number of sectors like retailers, property-linked businesses, and so on.

ASX bank shares could also suffer if a lot more households start getting into arrears.

Foolish takeaway

I don’t think that the overall ASX 200 share market is going to crash, the worst of the decline may have been seen last year.

However, if some businesses report weaker-than-expected numbers, then this could lead to a plunge in share prices, such as we’ve seen with Temple & Webster Group Ltd (ASX: TPW) and JB Hi-Fi Limited. But I think that the declines are opening up long-term opportunities.

The post Will ASX 200 shares crash in 2023? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Should I buy Endeavour shares following the ASX 200 company’s stellar results?
• ASX 200 in freefall as CBA’s prediction of a soft landing might have just been torpedoed by huge interest rate call
• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• 4 ASX 200 stocks smashing new 52-week highs on Wednesday

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 positions in and has recommended Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Jb Hi-Fi and Temple & Webster Group. 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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