Category: Stock Market

The market may have been pushing higher again on Tuesday, but the same cannot be said for the Appen Ltd (ASX: APX) share price.

The artificial intelligence data services company’s shares continued their slide with a decline of almost 1% to $4.66.

This latest decline means the Appen share price is now down 20% since this time last month.

Has the Appen share price bottomed?

Unfortunately, one leading broker still believes the Appen share price can fall from current levels.

According to a note out of Bell Potter, just a week after downgrading the company’s shares to a hold rating, last week the broker went a step further by downgrading its shares to a sell rating with a $4.25 price target.

This price target implies potential downside of 9% for investors over the next 12 months.

What did the broker say?

Bell Potter was disappointed with Appen’s performance during the first half of FY 2022.

And while its analysts continue to forecast a huge rebound in the second half and solid growth in FY 2023 and FY 2024, the broker acknowledges that these forecasts are uncertain.

It commented:

There is no change in our forecasts for Appen which we only updated last week after the company provided an updated on the 1H2022 result and 2022 outlook. We continue to forecast underlying EBITDA of US$40.0m in 2022 which implies an H2 result of US$31.5m after Appen said the H1 result would be US$8.5m.

We note, however, there is no guidance for 2H2022 and 2022 and very little visibility on what the H2 result will be after the company said “the conversion of forward orders to sales is less certain this year compared to prior years”. We also continue to forecast underlying EBITDA of US$60.8m in 2023 and US$69.0m in 2024 but, again, there is very little visibility on what the results will be in these years. Our forecasts in 2023 and 2024 do assume a rebound in digital advertising and customer spend but the timing and extent of this turnaround is uncertain.

The post The Appen share price is down 20% in a month. Is it going lower? appeared first on The Motley Fool Australia.

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More reading

• Why A2 Milk, Appen, Boral, and REA shares are dropping today
• Why Appen, Imugene, OZ Minerals, and Paradigm shares are charging higher
• Why is the Appen share price jumping 10% on Monday?
• Worried about how ASX 200 tech shares might perform this earnings season? Here’s what to watch
• Why is the Appen share price charging 6% higher?

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 Appen Ltd. 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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Earlier today, BHP Group Ltd (ASX: BHP) released its full year results and declared another huge dividend. This is being underpinned by the record free cash flow the mining giant generated during the last 12 months.

In light of this, investors may be wondering if the free cash flow that Pilbara Minerals Ltd (ASX: PLS) is generating thanks to sky high lithium prices will be sufficient for it to pay a dividend along with BHP in FY 2022.

Will there be a Pilbara Minerals dividend in FY 2022?

Unfortunately, after scouring a range of broker notes, I’ve not found a single analyst tipping a Pilbara Minerals dividend in FY 2022.

Though, that doesn’t necessarily mean that one isn’t coming. Analysts are often wrong with their estimates. For example, the market was not expecting Telstra Corporation Ltd (ASX: TLS) to increase its dividend last week but it did. And guessing a maiden dividend is perhaps even harder.

So when will there be one?

According to a recent note out of Credit Suisse, its analysts are expecting the dividend payments to commence in FY 2023. And it certainly could be worth the wait if the broker is on the money with its forecasts.

The note reveals that Credit Suisse is forecasting a 29 cents per share dividend that financial year. Based on the current Pilbara Minerals share price of $3.17, this will mean a yield of 9.1% for investors.

In FY 2024, the broker is expecting the lithium miner’s dividend to ease a touch. Its analysts are forecasting a 21 cents per share dividend for that financial year. This will be a dividend yield of 6.6% for investors.

All in all, based on the above, Pilbara Minerals could soon be considered a dividend share. And a high yielding one at that!

The post Will Pilbara Minerals shares pay a dividend in 2022? appeared first on The Motley Fool Australia.

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More reading

• Why is the Liontown share price leaping 5% on Monday?
• Top brokers name 3 ASX shares to buy next week
• Up 30% in a month, can the Pilbara Minerals share price keep rising?
• Brokers name 3 ASX shares to buy today
• Up 52% since June, can the Pilbara Minerals share price extend gains?

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 Macquarie Group Ltd (ASX: MQG) share price has risen by 14.4% since 17 June 2022. That compares to a rise of almost 10% in the S&P/ASX 200 Index (ASX: XJO).

Macquarie is a global investment bank, generating income and profit from across the world.

The Macquarie share price has still fallen by 13.5% over 2022 to date, indicating it may not be impervious to the effects of strong inflation and rising interest rates.

Macquarie shares hit a 2022 low in mid-June but they have been steadily rising since. That low came as investors were getting used to central banks, such as the Reserve Bank of Australia (RBA), ramping up interest rates at a rapid rate.

But, with the Macquarie share price rising over the past couple of months, is there still an opportunity for it to hit $200 in 2022?

Brokers are mostly optimistic on the Macquarie share price

Experts have had their chance to review Macquarie’s FY23 first quarter update.

The investment bank said that it experienced “favourable trading conditions” with the FY23 first quarter operating group contribution “up” year over year, though conditions did “soften” during the quarter.

Broker Morgan Stanley said it thinks that the first quarter, which was expected to be down, demonstrated enough that FY23 will meet or beat forecasts for this financial year. Morgan Stanley has a price target of $218, which implies a rise of almost 20%. The rating is ‘overweight’.

The broker Ord Minnett has a price target of $202 on the investment bank, with a potential rise of around 10%. It also said the first quarter was stronger than expected. Ord Minnett’s rating is ‘buy’.

Meantime, UBS has a price target on Macquarie of $200. It also thought the first quarter was better than expected. Its rating is ‘neutral’.

However, while Citi is also ‘neutral’ on the investment bank, the price target is just $172. That implies a possible drop of 6%. It’s concerned about interest rates going up.

A price target is where the broker thinks the share price will be in 12 months. These price targets were given in July, but it’s certainly possible that the Macquarie share price could hit these numbers before the end of 2022.

What next?

Macquarie is expecting to report its FY23 half-year result on 28 October 2022.

Referring to the outlook, Macquarie said in its FY23 first quarter update that it will “continue to maintain a cautious stance, with a conservative approach to capital, funding, and liquidity that positions us well to respond to the current environment”.

It also said:

Macquarie remains well-positioned to deliver superior performance in the medium-term. This is due to our deep expertise in major markets, strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions, an ongoing program to identify cost-saving initiatives and efficiency, a strong and conversative balance sheet and a proven risk management framework and culture.

Macquarie share price snapshot

Over the last month, Macquarie shares have gone up more than 5%.

The post Can the Macquarie share price get back over $200 this year? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Are Coles shares an ASX buy ahead of the company’s earnings next week?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Shopping Centres Australasia share price slips on FY22 results
• Endeavour share price outperforms on Tuesday to smash new, all-time high

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

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The Sayona Mining Ltd (ASX: SYA) share price closed 1.79% lower on Tuesday at 27.5 cents.

That remains midway between its 12-month low of 11 cents per share that it hit in late February and the high of 39 cents per share it reached in mid-April.

Following that April high, the Sayona Mining share price proceeded to drop to 12 cents per share in late June before recovering to its current price.

It’s safe to say Sayona Mining shares have been on a rollercoaster ride this year. So what’s going on with this ASX lithium stock?

What’s been happening lately?

Of course, much of the share price movement is likely influenced by the price of lithium. Additionally, a prediction by Goldman Sachs at the start of June that demand for lithium would fall in the future sparked a sell-off in lithium shares that continued for much of the month.

However, Sayona’s strong recovery towards the end of the month could be attributed to a couple of discoveries. On 23 June, Sayona announced the discovery of lithium targets at the Mt Edon project in Western Australia.

On 27 June, the company revealed multiple new spodumene pegmatites had been identified at its Moblan Lithium Project in Quebec, Canada. The Sayona share price jumped 12% on the news.

The following day Sayona shares soared by another 25% on the back of plans to restart the company’s North American Lithium (NAL) operation.

The NAL restart meant Sayona Mining could resume the production of spodumene concentrate in the first quarter of FY23. This allows Sayona Mining to become the first North American local supplier of lithium concentrates.

In late July, Sayona Mining released an update for the quarter ended June 2022, which was met with optimism. However, Sayona remains unprofitable, as my Foolish colleague Zach Bristow pointed out.

More recently, Sayona Mining agreed with existing shareholder, Acuity Capital, to increase the size of its At-the-Market Subscription Agreement (ATM).

Originally, the ATM provided Sayona Mining with up to $50 million of standby equity capital with an expiry date of 31 July 2023. This has been revised to a limit of $200 million and an extended expiry date of 31 July 2025.

Subsequent to this extension, Sayona Mining has agreed to issue an additional 155 million shares at nil consideration to increase Acuity Capital’s total security holding to 250 million shares.

While this bolsters the financial base for Sayona Mining, it also means dilution of existing shareholders.

Sayona Mining share price snapshot

Year to date, the Sayona Mining share price has risen by almost 100%. It is also up 96% over the past month.

That is in stark contrast to the S&P/ASX 200 Index (ASX: XJO), which is down 6% year to date and up 6% over the past month.

Sayona Mining has a market capitalisation of $2.3 billion based on its current share price.

The post Why is the Sayona Mining share price so volatile? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX lithium shares having such a cracking start to the week?
• Why is the Lake Resources share price up so much more than other ASX lithium shares today?
• Why has the Sayona Mining share price rocketed almost 100% in a month?
• Why is the Sayona Mining share price surging 15% on Monday?
• Why Appen, Centuria Industrial, NRW, and Sayona Mining shares are pushing higher

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. Motley Fool contributor Raymond Jang has no position in any of the stocks mentioned.

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Lynas Rare Earths Ltd (ASX: LYC) shares are known for many things. For one, Lynas is by far the largest pureplay rare earths company on the ASX, with a market capitalisation of close to $9 billion.

The strategic importance of the company has led to renewed interest in Lynas and its future-facing rare earths operations over the past few years.

Back in March, we covered how Lynas could stand to benefit from the efforts of both the United States and Australian governments to shore up supply chains of critical minerals like rare earths.

But Lynas is also famous for its stellar share price run in recent months and years. Back in early 2020, you could buy one Lynas share for just $1.20. Today, the company has closed at $9.95 a share after hitting an all-time record high of $11.59 back in April.

Lynas shares: where are the dividends?

But one thing Lynas is not known for is its dividends. Unlike many ASX 200 shares, Lynas has never paid a dividend. Back in February, we looked at why this is the case. It’s not from a lack of profits for one. That’s the usual primary suspect for a lack of dividends on the ASX.

As we covered back then, Lynas brought in $235.3 million in earnings before interest taxes, depreciation and amortisation (EBITDA) over the 2021 financial year. That works out to be around 18.08 cents in earnings per share (EPS). 

Now Lynas is a company that is still investing heavily in future growth. Despite the positive earnings of FY21, Lynas still went to investors for a $425 million capital raising. It earmarked these funds for its Kalgoorlie Rare Earths Processing plant, as well as upgrades for its Lynas Malaysia plant.

Because Lynas is investing so heavily in its future capabilities, its management has probably come to the conclusion that paying out a dividend (which nets no returns for a company) is not a wise use of capital at this time.

Now perhaps the picture will change when Lynas reports its FY22 numbers on Friday next week (26 August). If Lynas reporters even higher earnings for FY22, it’s possible (although perhaps unlikely) that a dividend could be declared. But we shall have to wait and see.

The post Will Lynas shares pay a dividend in 2022? appeared first on The Motley Fool Australia.

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More reading

• Why Lynas shares and one other ASX 200 rare earths miner are in this expert’s ‘core basket’
• Why has the Lynas share price surged 22% in the last 3 weeks?
• Here are the top 10 ASX 200 shares today
• Why BWP, Lynas, Pilbara Minerals, and Pinnacle shares are charging higher
• ‘Essential foundation for success’: Lynas share price leaps on $500 million expansion

Motley Fool contributor Sebastian Bowen 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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S&P/ASX 200 Index (ASX: XJO) shares pushed through another day of big earnings news as the index lifted for a third consecutive day. It closed Tuesday’s session 0.58% higher at 7,105.4 points, marking a new nine-week high.

The S&P/ASX 200 Materials Index (ASX: XMJ) led the way today, gaining 1.7%. Its top-performing constituent was BHP Group Ltd (ASX: BHP) after the iron ore giant posted a US$21.3 billion underlying attributable profit and a US$1.75 final dividend.

The sector’s strong performance was made more impressive by the struggling iron ore price. Iron ore futures slipped 2.8% overnight to reach US$106.79 a tonne. Meanwhile, some base metal prices fell as much as 4.5% and gold futures slumped 1% to US$1,798.1 an ounce.

The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) and the S&P/ASX 200 Health Care Index (ASX: XHJ) also outperformed, each gaining 1%.

It wasn’t all sunshine on the market today, however. The S&P/ASX 200 Energy Index (ASX: XEJ) slumped 1%. The Beach Energy Ltd (ASX: BPT) share price struggled for a second consecutive day to close down 3.95%. This is seemingly spurred by the company’s full-year results released yesterday.

All in all, nine of the ASX 200’s 11 sectors lifted on Tuesday. But which ASX share was the index’s top performer? Keep reading to find out.

Top 10 ASX 200 shares countdown

Tuesday’s best-performing ASX 200 share was Life360 Inc (ASX: 360). The tech company released its first-half results this morning, revealing its revenue had more than doubled year over year. Find out more about what Life360 has been up to here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
Life360 Inc (ASX: 360)	$5.80	5.45%
Pointsbet Holdings Ltd (ASX: PBH)	$3.90	5.41%
Event Hospitality and Entertainment Ltd (ASX: EVT)	$15.35	5.07%
BHP Group Ltd (ASX: BHP)	$40.51	4.09%
Altium Ltd (ASX: ALU)	$31.73	3.66%
Amcor CDI (ASX: AMC)	$18.45	2.79%
NIB Holdings Limited (ASX: NHF)	$7.12	2.45%
Aurizon Holdings Ltd (ASX: AZJ)	$3.99	2.31%
Endeavour Group Ltd (ASX: EDV)	$8.16	2.26%
Clinuvel Pharmaceuticals Limited (ASX: CUV)	$20.05	1.98%

Our top 10 ASX 200 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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• Why has the Panoramic Resources share price surged 40% in a month?
• Are Coles shares an ASX buy ahead of the company’s earnings next week?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why BHP, Life360, Tassal, and Temple & Webster shares are charging higher
• Shopping Centres Australasia share price slips on FY22 results

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 Altium, Life360, Inc., and Pointsbet Holdings Ltd. The Motley Fool Australia has positions in and has recommended Amcor Limited. The Motley Fool Australia has recommended Aurizon Holdings Limited, NIB Holdings Limited, and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The iShares S&P 500 ETF (ASX: IVV) has been a solid performer for investors over the last month, it has risen by 7%. That’s a stronger performance than the 6.2% return for the S&P/ASX 200 Index (ASX: XJO).

As some investors may be aware, the performance of an exchange-traded fund (ETF) is dictated by the underlying holdings.

If, collectively, the value of the businesses that an ETF owns go up, then this benefits the ETF’s value.

The same can happen going downwards as well. When the group of shares that the ETF owns go down in value, then this would hurt the value of the ETF.

The S&P 500 represents a portfolio of around 500 businesses.

What shares are in the iShares S&P 500 ETF?

These are some of the biggest holdings in the S&P 500 ETF on 12 August 2022:

Apple (7.3%)

Microsoft (6%)

Alphabet (3.9%)

Amazon (3.5%)

Tesla (2.1%)

Berkshire Hathaway (1.5%)

UnitedHealth (1.4%)

Nvidia (1.3%)

Johnson & Johnson (1.2%)

Of course, there are hundreds of other names like Costco, Disney and McDonalds.

How did those names perform?

Let’s have a look at how some of the biggest positions have performed over the past month, as these are the ones that would have the biggest influence on the overall iShares S&P 500 ETF performance.

Over the last month, Apple shares are up 17.75%, Microsoft shares are up 15.4%, Alphabet shares are up 12%, Amazon shares are up 25.9% and Tesla shares are up 28.6%.

These numbers indicate that the biggest shares actually performed much better than the overall S&P 500 index – it was other index constituents that didn’t do as well. For example, over the past month, the Johnson & Johnson share price is down 4.7%.

Why are the technology shares rising?

To truly know the answer to that question, you’d need to ask the buyers and sellers of those shares of the past month why they transacted at the price they did. This could explain what has happened to the iShares S&P 500 ETF.

There has been a lot of volatility in 2022. Investors have been trying to get to grips with inflation and rising interest rates. Central banks are increasing interest rates to try to bring inflation under control.

Warren Buffett once said this about interest rates:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

But, some iShares S&P 500 ETF investors may be thinking that interest rates may not need to go as high as previously expected. Monthly inflation in the US may have peaked after the latest figure was lower than the previous month. But, the next question is not ‘how high’ inflation goes, but ‘how long’ elevated inflation remains. Time will tell.

The post Here’s why the iShares S&P 500 ETF (IVV) has climbed 7% in a month appeared first on The Motley Fool Australia.

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• 3 top ETFs for ASX investors to buy next week
• 2 quality ETFs for ASX investors to buy next week
• 3 things I love about the iShares S&P 500 ETF right now
• I rate these top ASX growth shares as buys in August
• 3 wonderful ETFs for ASX investors to buy today

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Costco Wholesale, Microsoft, Nvidia, Tesla, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and UnitedHealth Group and has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Nvidia, Walt Disney, and iShares Trust – iShares Core S&P 500 ETF. 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 Bitcoin (CRYPTO: BTC) price is trading right about where it was this time last week.

Meanwhile, Ethereum (CRYPTO: ETH), the world’s number two crypto, remains up 5% over the week.

We say ‘remains’ up because both tokens have lost ground over the past 24 hours.

The Bitcoin price is down 4% while Ethereum is down 6%.

Still, Ethereum has gained an impressive 36% over the last month compared to a price gain of 11% for BTC.

So why has Ethereum been outperforming?

Ethereum outpaces Bitcoin price gains as Merge approaches

The answer to Ethereum’s outperformance looks to be the upcoming Merge.

This will see the Ethereum blockchain transition from proof of work (POW) to proof of stake (POS). Once complete, the POW protocol will require a lot less computing power, cutting costs, increasing efficiency, and producing far less carbon emissions.

While the Merge has been underway for well over a year now, it may finally go from the final testing stages to live use by the middle of next month.

Commenting on how this transition has helped Ethereum rally faster than the Bitcoin price, eToro’s market analyst and crypto expert Simon Peters said:

In terms of how the market is reacting there is now obvious evidence that it is becoming more actively sensitive to developments on The Merge. The [Ethereum]price has been on an upward trajectory and has reacted positively to developments as investors buy into the token ahead of the change.

But there is a more fundamental long-term potential here. The POS change will alter the economics of the token. While other blockchains already use POS, none have the sheer scale and variety of uses compared to Ethereum.

Will it last?

The Ethereum and Bitcoin price have both fallen over the past day. Is the Merge party over?

Addressing the retrace, Matt Maley, chief market strategist at Miller Tabak & Co, said there may be some profit taking going on. He noted investors may be cautious with some worrying economic data coming out of China.

Maley said (quoted by Bloomberg), “We have to realise that the crypto market is still speculative. I think it’s normal and healthy, digesting the recent gains, especially in Ethereum.”

Looking ahead, Alkesh Shah, global crypto strategist at Bank of America, cautioned of potential further corrections ahead for risk assets, which would likely see the Ethereum and Bitcoin prices fall.

“Our view is that risks related to rising rates, inflation and a mild recession are likely discounted,” he said. “But the potential for a hard recession … may result in growth underperformance and another risk asset correction, including crypto/digital assets.”

The post This is why Ethereum has been outpacing the Bitcoin price gains. Will it last? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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 Panoramic Resources Ltd (ASX: PAN) share price has taken off over the past month, up almost 42%.

In today’s session, the small-cap nickel and gold explorer once again closed higher, up 6.25% to 25.5 cents.

The company’s wild run of late includes two separate share price spikes over the past four weeks.

Let’s examine.

What’s pushing the Panoramic Resources share price?

The first share price surge occurred on 1 August. That’s when Panoramic Resources reported further positive drilling results at its Savannah Nickel Project in Western Australia.

The company reported “mineralisation thicknesses continue to be significantly better than predicted”.

In its statement, the company said:

Results from the first two drill fans above the 900 Fault have the potential to significantly increase the Savannah Mineral Resource in this area of the mine and support the development of a second mining front to support mining operations at Savannah North.

On the same day, Panoramic delivered a presentation at the Diggers & Dealers Mining Forum.

Investors bid up the Panoramic Resources share price to 22 cents that day, a 10% gain.

How BHP’s offer to buy Oz Minerals helped Panoramic

The biggest news out of the resources space this month is the takeover offer made by BHP Group Ltd (ASX: BHP) to OZ Minerals Limited (ASX: OZL).

OZ Minerals is a significant player in the copper and nickel segments. BHP offered to buy OZ Minerals for $25 per share, which was a 32% premium on the share price at the time.

BHP is the biggest company on the ASX, with a whopping market cap of $197 billion. To put that into perspective, it single-handedly accounts for 11% of the value of the ASX 200.

When a company of this significance offers a premium price to buy you out, you must have something it seriously wants. And in the case of OZ Minerals, that’s copper and nickel.

These two minerals are expected to play a large role in the decarbonisation era, and the takeover attempt reinforced their importance. This had a flow-on effect to many smaller ASX mining shares. It benefitted Panoramic Resources because the company derives most of its revenue from nickel mining activities.

Oz Minerals announced the rejected offer on 8 August, sparking massive media and investor attention.

Since then, the Panoramic Resources share price has ascended 20%.

The future of nickel and electric vehicles

Rising demand for nickel has also helped the Panoramic Resources share price trajectory of late.

The price of the commodity has increased by 6.5% over the past month, according to Trading Economics.

Nickel is now one of the world’s most in-demand metals, according to reporting on abc.net.au.

Right now, nickel is primarily used to make stainless steel. But it’s also needed in the lithium-ion batteries that make electric vehicles (EVs) run. In fact, those batteries need more nickel than lithium to function.

The article cited a CSIRO report that shows “about five times as much nickel (48,006 kilotonnes) will be needed to meet global demand by 2050 as lithium (8,990 kilotonnes)”.

The article quoted Jessica Farrell, who is the president of the BHP Nickel West operations:

If we look out to 2030, we see a 60% increase in electric vehicles and then out to 2040 we see that going up another 30%, to 90%.

So, we see an incredibly good trajectory for demand — and that’s globally.

We’ll also see that transition locally, I think, a lot faster than we expect.

Panoramic Resources share price snapshot

The Panoramic share price is up 48% over the past 12 months and down 14% year to date.

The post Why has the Panoramic Resources share price surged 40% in a month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has positions in BHP Billiton Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Northern Star Resources Ltd (ASX: NST) share price has continued to tread higher in the past month.

At the end of market trade on 15 July, shares in the gold miner finished the day at $6.75 apiece.

Fast forward a month, and the share has closed at $8.11, up 20% over the period.

Let’s take a look at what’s causing Northern Star shares to regain their shine lately.

What’s happened to the Northern Star share price?

A rebound in confidence across the market appears to be leading the Northern Star share price higher since mid-July.

The S&P/ASX 200 Resources (ASX: XJR) sector closed 1.17% higher to 5,442.4 points today and is up 13% in a month.

In July, the ASX experienced strong volatility as concerns mounted over the gloomy outlook of the world economy amid inflationary pressures.

However, this has all been put to bed for now as the latest consumer price index data out of the US indicated inflation was cooling off.

With that being said, the market has been nudging higher as it’s likely that the US Federal Reserve will lay off its aggressive monetary tightening policy.

This is particularly important for the price of gold, as lower interest rates mean higher gold prices.

Investors tend to shift away from low-performing asset classes such as government bonds when the market is brimming with confidence.

In effect, stronger demand for gold leads to higher prices for it which, in turn, affects Northern Star’s earnings.

At the time of writing, the price of the yellow metal is hovering around US$1,780 per ounce, up 4% in the past 30 days.

What do the brokers think?

Late week, a couple of brokers weighed in with their thoughts regarding the Northern Star share price.

According to ANZ Share Investing, UBS cut its price target by 2% to $9.80 for the gold miner’s shares.

On the other hand, JPMorgan raised its rating by 5.6% to $9.50 per share.

Based on today’s price, this represents an upside of 20.8% and 17%, respectively.

Both brokers believe Northern Star shares are significantly undervalued given the current economic environment.

Northern Star is scheduled to report its FY22 results on Wednesday 24 August.

The post Why has the Northern Star share price climbed 20% in a month? appeared first on The Motley Fool Australia.

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More reading

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• Is the Northern Star share price on the way back up?
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• How are ASX 200 gold shares reacting to the RBA rate hike?

Motley Fool contributor Aaron Teboneras has positions in Northern Star Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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