Category: Stock Market

Qantas share price jumps higher following security breach
The Qantas Airways Limited (ASX: QAN) share price is marching higher in early trade, up 0.8%.

Shares in the flying kangaroo closed yesterday trading for $5.20 and are currently trading for $5.24 apiece.

The gains come despite a security screening breach at Melbourne Airport that led to lengthy delays for passengers early this morning.

What happened at Melbourne Airport?

The Qantas share price appears unimpacted by news of the major security breach.

Thousands of passengers who had already passed through the security checkpoint needed to return from the terminal to be screened a second time. As you’d expect, this led to lengthy queues and flight delays for frustrated travellers.

The cause for the disruptions appears to be an accidental move by one of the passengers at the airport.

Commenting on the occurrence, a Qantas spokesperson said:

A passenger appears to have inadvertently passed from an unscreened area to a screened area of the airport in Melbourne. As a precaution all Qantas operations have been put on hold and passengers in the terminal are being rescreened, which is causing delays to some services this morning.

Qantas stressed that the rescreening was done with safety foremost in mind and apologised for the trouble that was caused:

Safety is our number one priority, but we know this disruption is causing some inconvenience for our passengers and we apologise for that. We are investigating how this incident occurred.

With numerous flights delayed in Melbourne, the interruptions are likely to impact airports and travellers across Australia today.

Qantas share price snapshot

Despite still recovering from the pandemic impacts, the Qantas share price has managed to outperform the S&P/ASX 200 Index (ASX: XJO) in 2022.

Qantas shares are up 2% this calendar year compared to a year-to-date loss of 12% posted by the benchmark index.

The post Qantas share price jumps higher following security breach appeared first on The Motley Fool Australia.

.

More reading
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.

from The Motley Fool Australia https://ift.tt/TaMwPrn
11 October 2022
Which ASX shares I’d buy with $5,000 right now
I have long been a fan of buying ASX shares at good prices. This month seems a very useful time to be investing because of how low some valuations have gone.

Inflation and higher interest rates seem to have really spooked the market.

When you look at the long-term performance of the share market on a graph, there are a few periods of time that stick out as good times to buy such as the GFC and the COVID crash in 2020.

Past crashes seem like major opportunities. But the current one we’re going through (whether it’s this one or another) seems dangerous. I don’t think that shares are magically going to fall by themselves, there needs to be a genuine problem to cause the drop.

The situation of rapidly rising interest rates (from a very low base) is a rare problem. But, whether ASX shares bounce back quickly or not, I believe the prices we’re seeing are too good to ignore for the long term. With that in mind, I’ve picked out some interesting ideas that I could see myself investing $5,000 into:

Temple & Webster Group Ltd (ASX: TPW)

This business is a leading e-commerce business, selling a wide range of furniture pieces and homewares.

I think the 50% fall in the Temple & Webster share price offers a much cheaper entry point to an ASX share that’s doing the right things to grow for the long term.

Firstly, I’ll acknowledge that a retailer will see bumps – it’s unlikely to deliver continuous growth every year. But I think the long term looks promising with a growing uptake of online shopping by consumers.

The company is investing in technology, such as an AI interior design start-up based in Israel. Another example is the company’s augmented reality service that enables customers to ‘see’ a piece of furniture in their room.

It’s also investing in efficiencies, which will help the company’s unit economics and long-term profitability.

I think that Temple & Webster’s revenue can continue to grow at a solid pace over this decade, particularly if the revenue per active customer keeps growing.

Sandfire Resources Ltd (ASX: SFR)

I’m not typically an investor in resources or commodity businesses. However, I would definitely consider a business that is involved in a commodity that has a compelling long-term future. A buying opportunity could be when that commodity falls in price which also affects the business valuation.

That seems to have happened with this copper miner. The Sandfire Resources share price has dropped by 43% this year.

I think copper is a good commodity to have exposure to because it’s important for the electrification and decarbonisation of the world. As the world aims for net zero, copper demand could rise.

The ASX share is currently focused on developing projects, such as the Motheo copper project in Botswana, which could eventually reach copper production of around 55kt per annum.

I’m not expecting a quick rebound of copper prices, but I think Sandfire is one of the most interesting ‘value’ ASX mining shares to consider for the long term at this low price.

Nick Scali Limited (ASX: NCK)

A business that sells furniture may not sound like a compelling ASX share.

But I think there are a number of things to like about this company. For starters, the Nick Scali share price has dropped 38% this year.

I believe the boss – Anthony Scali – is one of the best retailing leaders in Australia. He also has a lot of skin in the game because he owns millions of shares, so he should be very motivated to do well for the ordinary shareholder.

Individual store sales will probably suffer downturns. But, Nick Scali had 62 stores at June 2022 and has a long-term target of 86 across Australia and New Zealand. Opening new stores can offset some same-store sales pain.

It recently acquired another furniture business, Plush, and plans to grow that store network from 46 to between 90 to 100 in the coming years.

Between Nick Scali and Plush, the scale benefits of an enlarged business can help margins.

The online segment of Nick Scali is small but very profitable, in my opinion. Written sales order growth was 35.8% in the second half of FY22. The full e-commerce offering was launched in Australia by the ASX share in May 2022, which drove growth in June and July 2022.

Cycling against lockdowns, Nick Scali reported total written sales order growth of 64.1% for July 2022, the first month of FY23. Plush’s earnings are a boost to Nick Scali, seeing as it didn’t own the business in the prior corresponding period. On its own, Nick Scali’s total written sales orders were up 28.8% in July 2022.

Finally, Nick Scali pays an attractive dividend. It could be lower in FY23 or FY24 (compared to COVID years). But, the FY24 estimate on CMC Markets puts the annual dividend at 64.5 cents per share, which translates into a grossed-up dividend yield of around 9.5%.

The post Which ASX shares I’d buy with $5,000 right now appeared first on The Motley Fool Australia.

.

More reading
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 Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/b7C1f5R
11 October 2022
Telstra share price higher on AGM update
The Telstra Corporation Ltd (ASX: TLS) share price is edging higher on Tuesday.

In morning trade, the telco giant’s shares are up 0.5% to $3.84.

Why is the Telstra share price edging higher?

The Telstra share price is on the move on Tuesday after the company released its annual general meeting presentation ahead of the event.

That presentation includes a trading update, which reveals that Telstra has started the year positively.

According to the release, Telstra’s new CEO, Vicki Brady, has confirmed Telstra’s guidance for FY 2023. Telstra continues to expect:
- Total income of $23bn to $25bn ($22bn in FY 2022)
- Underlying EBITDA of $7.8bn to $8bn ($7.3bn in FY 2022)
- Capex of $3.5bn to $3.7bn ($3bn in FY 2022)
- Free cash flow of $2.6bn to $3.1bn ($4bn in FY 2022)
Brady commented:

Guidance across all measures includes our Digicel Pacific acquisition that completed in July. Our Underlying EBITDA guidance is consistent with our previous FY23 ambition, plus a contribution from Digicel Pacific.

Our Capex guidance includes an uplift in mobile investment, around $150m for Digicel Pacific, and around $350m of strategic investment outside of BAU for the inter-city fibre and Viasat infrastructure projects. Finally on guidance, we expect to continue to achieve strong cash flow, enabling us to invest for growth and deliver returns to shareholders.

Optus cyberattack

Telstra’s chair, John Mullen, spoke briefly about the Optus cyberattack and the growing threat facing all companies. He said:

Vicki will touch further on cyber-security shortly, but may I just say that it is easy for third parties to be critical of companies who have suffered devastating cyber-attacks such as happened recently to Optus.

Let me be blunt, however, and say that it is easy to be critical when it isn’t you in the firing line, and we should all avoid hubris because no-one can be complacent and no organisation can ever be 100% sure that it is completely protected and safe.

The threat and sophistication of the attackers grows every day, and to address the threat business needs to put aside competitive rivalry, and work constructively across industries, with government, and with the community to protect Australia from this modern scourge.

Scheme meeting

It is also worth noting that Telstra will also be holding its scheme meeting today. This will see shareholders vote on the restructure of the company, which is a key component of the T25 strategy.

If shareholders approve the restructure, it will see the establishment of Telstra Group Limited as the head entity of the Telstra group. InfraCo Fixed (physical network infrastructure assets), InfraCo Towers (physical mobile tower assets), ServeCo (customer service and products), and Telstra International will then be below it.

After which, Telstra will consider selling some of its assets or demerging them into separate ASX listings to unlock value for shareholders. The latter is being seen as the likely option for the InfraCo Fixed business.

The post Telstra share price higher on AGM update appeared first on The Motley Fool Australia.

.

More reading
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 Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/BP7umFt
11 October 2022
Guess which ASX ecommerce share is rocketing 17% higher today
The Cettire Ltd (ASX: CTT) share price has taken off on Tuesday morning.

At the time of writing, the luxury fashion online retailer’s shares are up 17% to 98 cents.

Why is the Cettire share price shooting higher?

Investors have been bidding the Cettire share price higher after the company released an update on its performance during the first quarter.

The good news for shareholders is that rising living costs and recession concerns haven’t yet impacted Cettire’s sales.

According to the release, the company’s gross revenue grew 62% over the prior corresponding period to $84.4 million during the quarter.

This was driven by the year over year doubling of its active customers to 287,626 (up 10.5% since the end of FY 2022) and improvements in repeat customer spending, which was partially offset by a lower average order value.

Another positive for the Farfetch rival was that its operating earnings were in positive territory during the quarter. Cettire reported adjusted EBITDA of $5.5 million, on a delivered margin greater than 20%.

It also revealed that its marketing investment (including brand investment) decreased to low double-digits as a percentage of sales revenue.

Cettire’s CEO, Dean Mintz, commented:

Cettire continues to demonstrate strong progress on its strategy to grow penetration of the large global personal luxury goods market. Our marketing initiatives and commercial offering are resonating with customers and we observed an acceleration in revenue and AOV growth into the quarter end, providing confidence in our Q2 outlook. The demand environment remains healthy and our quarterly performance also serves to highlight the attractiveness and resilience (to economic challenges) of the global luxury consumer.

Q1 is traditionally a seasonal low point for the business. The strong profit result highlights the advantages of our proprietary software-driven automation and the uniqueness of our business model, benefiting from a highly flexible cost base, low overheads and minimal inventory exposure. Further, our profitability and supportive working capital dynamics translated into positive quarterly cash flow.

The post Guess which ASX ecommerce share is rocketing 17% higher today appeared first on The Motley Fool Australia.

.

More reading
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 recommended Cettire Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/lh75RL2
11 October 2022
If I’d invested $1,000 in Core Lithium shares at the start of 2022, here’s what I’d have now
Core Lithium Ltd (ASX: CXO) shares have exploded 93% this year to date.

Despite a few ups and downs — they’ve been as low as 60 cents and as high as $1.69 — the company’s shares have come out on top.

So how much money would I have now if I had invested in this ASX lithium share at the start of the year?

Good investment?

On 4 January, the first day of trading in 2022, Core Lithium shares were fetching 60 cents at market open.

Let’s imagine I had invested $1,000 in Core Lithium on this day. I would have walked away with 1,666 shares at this price.

Today these shares are fetching $1.14 a share, based on Monday’s closing price. Now, this investment would be worth $1,899.24. So I would have made more than $899. If I had bought $10,000 worth of shares, I would have made nearly $9,000.

Now let’s take a look at the broader picture for Core Lithium shares.

On 13 September, Core Lithium hit a yearly high of $1.665 at market close. On this day, my shares would have been worth $2,773.89.

But overall, if I had invested $1,000 in Core Lithium at the start of this year, I would be very happy with my investment — despite the fact the company has not paid any dividends.

Core Lithium shared positive news to the market on Monday. As my Foolish colleague James reported, the company’s Finniss Lithium mine in the Northern Territory held an official opening.

The company revealed it is “on target” to export direct shipping ore (DSO) lithium by the end of the year.

Core Lithium share price snapshot

Core Lithium shares have soared 162% in the past year, while they have descended 29% in the past month.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has fallen almost 9% in the last year and 3% in the past month.

The company has a market capitalisation of about $1.98 billion.

The post If I’d invested $1,000 in Core Lithium shares at the start of 2022, here’s what I’d have now appeared first on The Motley Fool Australia.

.

More reading
Motley Fool contributor Monica O’Shea 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.

from The Motley Fool Australia https://ift.tt/nG6jblM
11 October 2022
What’s the outlook for ASX dividend shares for the rest of 2022?
The ASX share market has seen plenty of volatility this year. Some businesses have seen heavy declines, while others have hardly moved. A few have actually gone up. Could ASX dividend shares be the way to go for the rest of the year?

Over the 2022 year so far, some of the biggest declines belong to the likes of the Xero Limited (ASX: XRO) share price falling 50% and the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price falling 58%.

Others have done better. For example, the Rio Tinto Limited (ASX: RIO) share price is only down 2% and the National Australia Bank Ltd (ASX: NAB) share price is up approximately 1%.

What’s the outlook for ASX dividend shares?

I’ll split my thoughts up into sections on different sectors.

ASX banks

Plenty of the most popular ASX dividend shares are ASX bank shares. Names like Commonwealth Bank of Australia (ASX: CBA), NAB, Australia and New Zealand Banking Group Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC), Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) are all from the banking sector.

I think the short-term continues to look promising for these banks because interest rates keep being increased by the Reserve Bank of Australia (RBA). This should help lending margins, increasing profitability for the banks. So, that is likely to be good for 2022. But, beyond that, it could make things tricky for some borrowers who can’t afford the much higher rates.

Miners

Then there are ASX dividend shares like the miners such as BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto. While the iron ore price is substantially lower than it was earlier in the year, the current price of more than US$90 per tonne allows them to continue generating pretty good profit and cash flow, therefore paying attractive dividends.

Retailers

ASX retail shares have seen a hefty sell-off during 2022. A lower price can help boost the prospective dividend yield from retailers. Names like Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Nick Scali Limited (ASX: NCK) have all seen pain this year.

While it’s likely that retailers aren’t going to see as strong conditions as in FY21, I think that the hefty sell-off means that plenty of retail ASX dividend shares are now long-term opportunities at this lower level. But, I am expecting a lower profit generation. But, the first half of FY23 could show growth for retailers because it’s compared against locked-down periods in FY22.

Others

Looking at two other major ASX dividend shares, I think that both Telstra Corporation Ltd (ASX: TLS) shares and Woodside Energy Group Ltd shares (ASX: WDS) can continue being solid over the rest of the year.

Telstra is looking to further reduce costs, increase subscribers, grow profit margins and grow its mobile charges in line with inflation. Woodside has benefited from higher energy prices, but there doesn’t seem to be an end to the Ukraine conflict in sight, which has boosted names like Woodside.

Summary thoughts on ASX dividend shares

Overall, I am suggesting that plenty of ASX dividend shares look promising at the current prices for the rest of the year.

The post What’s the outlook for ASX dividend shares for the rest of 2022? appeared first on The Motley Fool Australia.

.

More reading
Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman Holdings Ltd. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited, Harvey Norman Holdings Ltd., Telstra Corporation Limited, and Wesfarmers Limited. The Motley Fool Australia has recommended JB Hi-Fi Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/wZQ4JWd
11 October 2022
Why Goldman Sachs is bullish on Mineral Resources shares
Mineral Resources Limited (ASX: MIN) shares could be in the buy zone right now.

That’s the view of analysts at Goldman Sachs, which remain very bullish on the mining and mining services company.

What is Goldman saying about the Mineral Resources share price?

According to the note, the broker has retained its buy rating with a $76.10 price target.

Based on the current Mineral Resources share price, this implies potential upside of almost 8% for investors over the next 12 months.

In addition, the broker is expecting a ~3% dividend yield in FY 2023, which lifts the total potential return to approximately 11%.

Why is the broker bullish?

Goldman Sachs notes that it has been attending a lithium investor tour, which included a site visit to the Wodgina mine in Western Australia.

There were two key takeaways from the tour, that could be of interest to investors. Goldman explained:

MIN expects the revised JV with partner Albemarle (ALB) to be finalised within the next 4-6 weeks with MIN likely to send spodumene to ALB’s 50ktpa hydroxide facility in Chengdu in China along with an expansion of ALB’s 28ktpa facility near Shanghai. MIN will enter China temporarily though and plan to build a 50ktpa hydroxide facility at Wodgina. MIN think they can build a 50ktpa Chinese designed and fabricated plant at Wodgina for around US$650mn (no hydroxide in GS base case).

The ramp-up of Wodgina is going extremely well and MIN believes processing trains 1-3 may be able to operate ~25% above nameplate therefore producing ~900-950ktpa of 5.5-6% Li2O (vs. GSe modeled 750ktpa). Study work is advanced on train 4 (not in GS base case) which will likely be larger than the existing trains, producing potentially up to 500ktpa of spodumene, with approval likely in 1H CY23 and ramp-up sometime mid to late CY24.

In light of the above, Goldman continues to “forecast a more than doubling of group EBITDA to over A$2.4bn in FY23 driven by higher lithium and low grade iron ore prices.”

The post Why Goldman Sachs is bullish on Mineral Resources shares appeared first on The Motley Fool Australia.

.

More reading
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.

from The Motley Fool Australia https://ift.tt/oj0hHcF
11 October 2022
Are ANZ shares an ASX 200 dividend buy right now?
The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has underperformed the S&P/ASX 200 Index (ASX: XJO) this year, but does its dip place the dividend-paying bank in the buy zone?

Some experts are bullish on both the company’s stock and its dividends in the future.

Right now, shares in ANZ are trading at $23.90 apiece. That’s 13.97% lower than they were at the start of 2022. Meanwhile, the ASX 200 has dumped 12.15% over the course of this year so far.

Could the smallest of the big four banks offer 21% upside and growing dividends? That’s what one broker is tipping.

Are ANZ shares an ASX 200 dividend buy?

There’s a lot going for ANZ shares, and the bank’s dividends, right now if experts are to be believed.

Baker Young managed portfolio analyst Toby Grimm flagged the stock as a buy last week, saying, courtesy of The Bull:

Compared to the other three major banks, ANZ shares were recently trading on the lowest price-to-earnings (P/E) multiple and offer the highest prospective dividend yield.

The big bank has offered investors $1.44 per share in dividends over the last 12 months. That leaves ANZ shares with a 6% dividend yield.

Additionally, it posted 223.8 cents of earnings per share (EPS) over the 12 months ended 31 March, meaning its P/E ratio currently sits at around 10.7x.

And it could be on the path to further improvement. Citi expects the company to grow its earnings over the coming financial years on the back of rate hikes, my Fool colleague James reports.

It also tips ANZ to pay out $1.56 per share in fully franked dividends in financial year 2023.

That would see its stock trading with a 6.5% yield at its current price.

Topping it off, Citi has slapped ANZ shares with a buy rating and a $29 price target, meaning the stock could offer investors a 21% return, plus any dividends. That’s certainly nothing to scoff at.

The post Are ANZ shares an ASX 200 dividend buy right now? appeared first on The Motley Fool Australia.

.

More reading
Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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.

from The Motley Fool Australia https://ift.tt/ybSPGYB
11 October 2022
This expert thinks the US stock market could fall another 20%: What should investors know?
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.

When Jamie Dimon talks, the market listens. As the longtime CEO of JPMorgan Chase (NYSE: JPM), the largest bank by assets in the U.S., not only has Dimon successfully navigated the company through multiple recessions and made JPMorgan a best-in-breed bank stock, but he always has a good pulse on the economy.

With more than $3.8 trillion of assets, JPMorgan is exposed to every part of the economy from consumers to small businesses to the largest corporations — and in almost every sector, too.

In an interview today on CNBC, Dimon said he expected the U.S. to enter a recession in six to nine months. He also said that while he doesn’t know the future, the S&P 500, which has fallen roughly 25% from its all-time highs earlier this year, could fall “another easy 20%.” Let’s take a look at why Dimon is concerned and what investors should know.

High inflation and rates could drain the consumer

There are several reasons why Dimon is concerned, beginning with inflation.Â The Consumer Price Index (CPI), which tracks the prices on a market basket of consumer goods and services, rose a jaw-dropping 9.1% in June on a year-over-year basis. And there is no clear evidence that inflation has peaked yet. The CPI ticked up 0.1% in August from July, and economists expect the CPI to tick up another 0.2% from August when September inflation data comes out Thursday morning. Prices for things like rent have remained stubbornly high.

High inflation has forced the Fed to aggressively raise its overnight benchmark lending rate, including three consecutive 0.75-percentage-point hikes at its last three meetings.

Rising interest rates increase the cost of consumer debt, which is why mortgage rates have soared lately. Payments on student loans are also expected to resume for the first time in more than two years, another burden for consumers.

Dimon does believe the economy is still relatively healthy right now, but rate hikes can take time to work their way through the economy, so the economy has not felt their full impact yet. Hopefully, though, they will also slow the growth of prices or bring them down.

Stocks face their own concerns

If consumer demand dampens, companies are likely to feel the sting on their sales and profitability. Companies will also face a higher cost of debt and a higher cost of doing business. Many investors think analyst earnings projections are still too rosy, so if third-quarter earnings and guidance disappoint, expect downward revisions, which will potentially lead to lower valuations and lower stock prices.

Dimon also worries about how Russia’s ongoing invasion of Ukraine will continue to impact the economy and markets. Previous oil sanctions as a result of the invasion sent oil prices soaring and rocked markets.

“I mean, Europe is already in recession — and they’re likely to put the U.S. in some kind of recession six to nine months from now,” Dimon said today. Global economies are very interconnected, and large companies headquartered in the U.S. could very well be doing a big chunk of their business in Europe, so what happens abroad could spill over to the U.S.

Finally, Dimon is concerned about the impact of quantitative tightening. The Fed is currently in the process of reducing its massive balance sheet by letting its bond holdings mature and run off. This effectively pulls liquidity out of the economy. The last time the Fed did this, in 2019, it contributed to a spike in interest rates on short-term loans between banks — an obscure but important part of the financial system known as the repo (short for “repurchase”) market — and it had to step back in to aid the market. Dimon is largely concerned because he doesn’t know exactly what to expect.

What investors should know

What can you do with all this as an individual investor?

First, prudent management includes preparing for the worst. What happens next in the U.S. will depend on the state of the economy after the Fed is done with its rate hikes. Dimon did say that the U.S. economy is “actually still doing well,” and this is not the first time Dimon has spoken about potential struggles ahead. But a deep global recession may not be fully priced into stocks yet. And the one thing Dimon expressed certainty about was more market volatility.Â

I think it’s certainly normal to be nervous right now. But if you invest in companies with strong fundamentals and with a long-term horizon in mind, you are very likely to ride out any potential storm.

Second, remember that Dimon is talking about what will happen in the short term. If you can afford to wait — at least three to five years — history shows that markets almost always go up over the long haul.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
The post This expert thinks the US stock market could fall another 20%: What should investors know? appeared first on The Motley Fool Australia.

.

More reading
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bram Berkowitz 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 JPMorgan Chase. 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.

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

from The Motley Fool Australia https://ift.tt/NZzue7q
11 October 2022
Can ASX lithium shares charge higher over the rest of 2022?
ASX lithium shares have seen plenty of volatility in 2022. But with the lithium price charging higher, could the final quarter of 2022 be a useful time to go hunting for opportunities?

Keep in mind that a higher resource price for a commodity can provide a big boost for the net profit after tax (NPAT) and cash flow. If production volume doesnât change and the costs of production donât change, but the company gets more revenue for that production, then itâs largely bonus money for the company (after paying more to the government).

There are a number of different ASX lithium shares to consider, including Pilbara Minerals Ltd (ASX: PLS), Liontown Resources Limited (ASX: LTR), Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO) and Mineral Resources Limited (ASX: MIN).

So, whatâs the outlook for the lithium price? Letâs go through what one of Australiaâs leading economists currently thinks.

Lithium demand expected to keep rising

The resources and energy quarterly report from the chief economist of the Department of Industry, Science and Resources was very promising for ASX lithium shares.

It noted that global sales of all types of electric vehicles increased 36% in the year to June 2022, compared to the same period in 2021. Chinese sales were up 110%, European sales went up 6%, and North American sales increased 27%.

The report also pointed out that in May, the Chinese Government âcut purchase taxes on some low-emission passenger vehicles by 50%, while some municipal governments have also provided subsidies and incentives to encourage EV purchases. Global passenger EV sales are expected to continue to grow strongly”.

Major global car makers are accelerating plans to transition to electric vehicles by developing new product lines and converting existing manufacturing capacity.

The report suggested âstrong underlying demand and EV manufacturersâ declarations of further increases in production, imply that EV sales could reach almost 40% of vehicle sales annually by 2030″. This would be an increase from 9% of sales in 2021.

Worldwide demand for lithium carbonate equivalent will be 724,000 in 2022, then rise by 40% to reach 1,058,000 tonnes by 2024. Asia is reportedly the major source of lithium demand, despite the increase of new battery manufacturing capacity in Europe and the US.

What about prices?

In terms of the price, the report pointed out that âsupply disruptions in August (due to extended power cuts in Sichuan province, amidst an intense heatwave) added pressure to lithium prices in China”. Sichuan reportedly produces more than 20% of Chinaâs lithium.

Many Australian producers have used long-term contracts, so the price received takes time to adjust to the current price. ASX lithium shares are seeing good prices, so it is flowing into contract prices.

The spodumene price is forecast in the report to remain high and average US$3,280 a tonne by 2023 before moderating to US$2,490 in 2024.

The report suggested that lithium is set to become a $10 billion-plus export industry within a year.

Broker ratings on ASX lithium shares

Brokers recognise the strong pricing of lithium, but some valuations may have run too hard.

For example, UBS rates the Pilbara Minerals share price as a sell, with a price target of $2.65. But, UBS does rate Allkem as a buy, with a price target of $18.70.

The post Can ASX lithium shares charge higher over the rest of 2022? appeared first on The Motley Fool Australia.

.

More reading
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 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.

from The Motley Fool Australia https://ift.tt/r2t0w6D
11 October 2022