Category: Stock Market

The Core Lithium Ltd (ASX: CXO) share price is taking off on Thursday despite the company’s silence.

Indeed, the stock recovered all it lost in June’s lithium sell-off earlier this week before hitting a four-month high earlier today.

The Core Lithium share price is trading at $1.515 at the time of writing, 4.84% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is gaining 0.8% right now while the S&P/ASX 200 Materials Index (ASX: XMJ is up 1.5%.

Let’s take a look at what’s been going on with the ASX lithium share lately.

What’s driving the Core Lithium share price higher?

Core Lithium’s stock is leaping upwards for a seventh consecutive session despite no news having been released by the company.

Though, it’s not alone in its gains. The materials sector is being led by ASX lithium shares.

The Lake Resources N.L. (ASX: LKE) share price is out in front with a 12.5% gain. Meanwhile, Pilbara Minerals Ltd (ASX: PLS) and Liontown Resources Limited (ASX: LTR) share prices are up 4.7% and 4% respectively.

Core Lithium’s shares are also rising amid reports out of China. The nation just recorded its best ever month for electric vehicle sales – a segment that’s expected to grow 84% in 2022, my Fool colleague Bernd reports.   

Of course, greater demand for electric vehicles means more demand for batteries, which in turn should lead to greater demand for lithium. As per the law of supply and demand, that would likely bolster lithium producers’ bottom lines.

The Core Lithium share price is currently 140% higher than it was at the start of 2022. Though, it’s trading 9.5% lower than its record high of $1.675, reached in April.

The post Why is the Core Lithium share price rocketing 5% today? appeared first on The Motley Fool Australia.

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More reading

• Why is the Lake Resources share price up so much more than other ASX lithium shares today?
• What this new Chinese record could mean for Core Lithium shares
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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

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If you own Telstra Corporation Ltd (ASX: TLS) shares, then you will no doubt be keen to hear what is happening with the telco giant’s dividend following its full year results release this morning.

Well, I have some good news for you.

What’s happening with the Telstra dividend?

Let’s start at the beginning. This morning Telstra released its full year results and revealed a 4.7% drop in revenue to $22,045 million but an 8.4% increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $7,256 million

The latter was driven by a particularly strong result from its key mobile business, which reported EBITDA growth of 21.2% or $700 million over the prior corresponding period.

Pleasingly, management expects this strong form to continue and has guided to underlying EBITDA of $7.8 billion to $8.0 billion in FY 2023. This will mean year over year growth of 7.5% to 10%.

This strong form and its positive outlook have allowed the company’s board to surprise the market with its first increase to the Telstra dividend in seven years.

Surprise dividend increase

Telstra will be paying shareholders a final fully franked dividend of 8.5 cents per share, which is up from 8 cents per share in the prior corresponding. This comprises a final ordinary dividend of 7.5 cents per share and a final special dividend of 1 cent per share.

Shares will trade ex-dividend for this on 24 August, with the payment expected to be made almost a month later on 22 September.

This final dividend took Telstra’s total dividend for FY 2022 to a fully franked 16.5 cents per share. This includes 13.5 cents ordinary and 3 cents special, representing a total dividend payout of $1,919 million.

Commenting on the dividend payment, Telstra’s outgoing CEO Andy Penn said:

This represents the first increase in the total Telstra dividend since 2015 and recognises the confidence of the Board following the success of our T22 strategy, the ambition in our T25 strategy of high-teens EPS growth from FY21 – FY25, the strength of our balance sheet and the recognition by the Board of the importance of the dividend to shareholders.

Where next for its dividend?

As you might have noticed above, the Telstra dividend comprises an ordinary dividend and a special dividend. The latter relates to payments from the NBN for infrastructure access and the disconnection and migration of customers during the rollout.

However, with the rollout now complete, this result marks the end of the NBN one-off related special dividend.

But the good news is that the team at Goldman Sachs doesn’t expect this to lead to dividend cuts. Its analysts are forecasting a 17 cents per share dividend in FY 2023 and then an 18 cents per share dividend in FY 2024.

All in all, today could mark the beginning of a series of increases to the Telstra dividend over the remainder of the 2020s.

The post Everything you need to know about the latest Telstra dividend appeared first on The Motley Fool Australia.

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More reading

• Telstra share price higher on earnings beat and surprise dividend increase
• Telstra share price on watch amid strong FY22 result and surprise dividend increase
• 5 things to watch on the ASX 200 on Thursday
• Here’s the Telstra dividend forecast through to 2024
• ‘Exciting’ ASX 200 dividend share expected to deliver material returns: expert

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.

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The AMP Ltd (ASX: AMP) share price has been on a rollercoaster ride today but is currently back in the red.

Its wobbly trade comes after the financial services provider announced a $1.1 billion capital return despite its profits tumbling 24.5% last half, as The Motley Fool Australia reported earlier.

After opening nearly 4% higher, AMP’s stock plunged to a low of $1.12 ­­– representing a 4% fall.

It lifted again to trade at $1.185 — almost 2% higher than its previous close — but has since slumped again and is currently down 0.69% at $1.157.

Let’s take a closer look at today’s news from the embattled financial services company.

AMP share price falls on $1.1b capital return

The AMP share price is in the red after the company announced a $1.1 billion capital return.

The return will kick off with an on-market buyback worth $350 million.

The other $750 million is expected to be returned to shareholders through a combination of capital return, special dividend, or more buybacks in financial year 2023. Such activities are subject to regulatory and shareholder approval.

AMP reported just $117 million of underlying after-tax profit in the first half. That’s a 24.5% drop from that of the prior corresponding period.

It also confirmed it won’t be offering an interim dividend.

AMP Bank’s profits fell 45% last half while its net interest margin (NIM) slipped to 1.32%.

The company’s Australian Wealth Management division’s assets under management (AUM) also dropped to $126.3 billion, mostly due to negative market returns.  

AMP CEO Alexis George said the lower profits reflected “a more challenging environment”, but noted it was also due to the company’s actions to deliver competitive offers and set itself up for longer-term success.

The AMP share price is currently 17% higher than it was at the start of 2022. For comparison, the S&P/ASX 200 Index (ASX: XJO) has fallen 7% in that time.

The post AMP share price slides as $1.1b pledged to investors appeared first on The Motley Fool Australia.

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More reading

• AMP share price in focus amid falling profits and $1.1b capital return
• Are AMP shareholders heading for a $1 billion pay day?
• Here are the top 10 ASX 200 shares today
• Up 13% in July, can the AMP share price maintain its momentum?
• Here’s the good news about bear markets

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

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The Fortescue Metals Group Limited (ASX: FMG) share price is rangebound today. At the time of writing, the share trades less than 1% in the green at $18.97.

Whilst various commodity stocks have flown to new heights in 2022, Fortescue has languished and now rests more than 1% in the red this year to date.

Chief to the struggles has been the price of iron ore. It too has incurred a difficult trot in 2022. Zooming out, it’s currently trading down 33% over the past 12 months as well.

Is the Fortescue share price heating back up?

Given the share’s sensitivity to the price of iron ore, as it is a price taker on the product, it really depends on what’s in store for that market next.

And, as seen in the chart below, it hasn’t been a great year for iron ore, or for the Fortescue share price for that matter.

Most of the issue has centred around demand and supply for the product, as it typically does. However, this time, there’s a little more at play.

“Prices for iron ore cargoes…bottomed around US$110 per tonne, not fat from a seven-month low of US$100 amid lingering worries about a potential global recession, China’s property crisis, steel production cuts, and recently US-China tensions over Taiwan,” Trading Economics noted.

“Weak global demand will help turn the iron ore market to a significant surplus over the second half of 2022, which, in turn, poses a significant downside risk for prices,” it added.

Meanwhile, the majority of brokers covering Fortescue now rate it as a sell, according to Refinitiv Eikon data.

Exactly 11 out of 19 analysts urge to sell Fortescue, whereas 7 brokers say to hold. Just 1 broker, Barclay Pearce Capital advocates to buy the stock.

The consensus price target from this list is $16.57, suggesting there could be more downside to come for Fortescue if the brokers have it right.

Meanwhile, time will tell in which direction the Fortescue share price will head next. It is down 15% in the past 12 months.

The post Still down in 2022, is the Fortescue share price now on the road to recovery? appeared first on The Motley Fool Australia.

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More reading

• Are Fortescue shares a buy for income or are they a dividend trap?
• AGL share price down amid Fortescue Future Industries hydrogen hub news
• What’s driving the Fortescue share price to an 8-week high today?
• The iron ore price has slumped 10% in 5 days. Here’s how ASX 200 mining shares have responded.
• Up 5% in a month, is the current Fortescue share price a buy or a sell?

Motley Fool contributor Zach Bristow 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 Adore Beauty Group Ltd (ASX: ABY) share price is having a rollercoaster Wednesday morning.

This follows the company’s late afternoon release yesterday that its CEO Tennealle O’Shannessy has resigned.

At the time of writing, shares in the online beauty retailer are down 1.47% at $1.345. Earlier, the share price rose as much as 8.43% to an intraday high of $1.48.

For context, the All Ordinaries (ASX: XAO) is 0.96% higher to 7,308.5 points on the back of Wall Street’s overnight gains.

Adore Beauty commences search to replace CEO

Despite the shock update, Adore Beauty advised it has time to conduct a global search for the replacement of its CEO.

O’Shannessy is slated to depart the company in February 2023 and head over to ASX-listed IDP Education Ltd (ASX: IEL).

Over there, she’ll take on the reins as CEO and managing director of the language testing and student placement company.

In the interim, O’Shannessy will offer her support to ensure a smooth transition when the new Adore Beauty CEO commences.

Chair of the Adore Beauty Board Marina Go said:

…I would like to thank Tennealle for her outstanding leadership and contribution during a particularly challenging couple of years. As CEO, Tennealle has done an excellent job delivering Adore Beauty’s financial and operational successes, including exceeding all prospectus forecasts, and leaves the business well-positioned for future growth.

Looking towards the future, Go added:

The foundations of our long-term growth strategy are now in place with our mobile app, loyalty program, and first ‘owned brand’ all launched and scaling strongly in a market benefitting from the structural shift to e-commerce, which has seen us increase our active customer base by 90% in two years.

About the Adore Beauty share price

After hitting an all-time low of 97.5 cents on 12 July, the Adore Beauty share price has accelerated by 50%.

It appears bargain hunters swooped in as inflation begins to cool down and confidence is being regained across the ASX.

At today’s price, Adore Beauty has a market capitalisation of approximately $126.60 million.

The post Adore Beauty share price volatile following CEO resignation appeared first on The Motley Fool Australia.

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More reading

• Why I think it’s time to load up on these 2 ASX shares
• Why is the Adore Beauty share price up 22% this week?
• Analysts name 3 exciting small cap ASX shares with major upside potential
• Up 16%: The Adore Beauty share price is soaring higher

Motley Fool contributor Aaron Teboneras 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 Idp Education Pty Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia has recommended Adore Beauty 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 Lake Resources NL (ASX: LKE) share price is screaming 12.5% higher today as ASX lithium shares continue on a roll this week. The Lake Resources share price is currently $1.485.

Lake Resources isn’t the only ASX lithium share riding high today.

Shares in Sayona Mining Ltd (ASX: SYA) are up 9.4% at the time of writing. The Core Lithium Ltd (ASX: CXO) share price is up 4.8%, Allkem Ltd (ASX: AKE) shares are rising 2.6%, while the Pilbara Minerals Ltd (ASX: PLS) share price is climbing 4.4%.

Why is the Lake Resources share price so hot?

Today’s gains for the Lake Resources share price follow a stellar day for the lithium producer yesterday.

As my colleague Sebastian reported, Lake Resources was one of the most highly traded ASX shares of the day, with 38.87 million traded at the time of publication. That’s well above its 90-day average of 26 million. Its share price also ended the day 6.4% higher.

As fellow Fool Zach also reported yesterday, the price of lithium is a factor in the Lake Resources share price being up 85% over the past month as of Wednesday. Prices for the battery metal still command a premium and are up more than 406% year over year.

But there’s also been a surge in demand for lithium recently after Shanghai in China came out of weeks of COVID-19 lockdown. The reopening saw a 63% increase in electric vehicle (EV) sales during June.

Lake Resources also got the biggest boost among ASX lithium shares on Tuesday when the United States Senate passed a US$437 billion spending bill including US$347 billion in climate and energy spending. The bill also removed per-manufacturer limits for the US$7,500 tax credit for new EVs.

As Electrek reported, the EV credit will be renewed from January 2023 and run for 10 years.

But of course, these developments benefit every ASX lithium share. So what is the unique element pushing the Lake Resources share price above its peers?

Short-selling positions closing

There have been no price-sensitive announcements out of Lake Resources since its quarterly report on 29 July.

But the Lake Resources share price was sold off during June and July on the back of a short-seller attack.

As my Fool friend Aaron reports, it seems investors are now closing their positions after Lake Resources became one of the most heavily shorted ASX shares.

Short-selling is a trading strategy where investors try to profit from a fall in the share price. The investor borrows then sells the shares, and buys them back later at a lower price for a profit.

The post Why is the Lake Resources share price up so much more than other ASX lithium shares today? appeared first on The Motley Fool Australia.

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More reading

• Why has the Sayona Mining share price rocketed almost 100% in a month?
• What this new Chinese record could mean for Core Lithium shares
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Up 85% in a month, Lake Resources share price extends gains on Wednesday

Motley Fool contributor Bronwyn Allen has positions in Allkem 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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Two of the market’s favourite talking points are dividends and lithium stocks, but do the pair ever converge into one ASX share?

Well, investors rejoice, there are a few stocks operating in the lithium segment that offer regular payouts.

Let’s take a look at why most lithium stocks don’t offer dividends and the few that do.

Why don’t more ASX lithium shares pay dividends?

Investors may have noticed that most ASX lithium shares don’t pay dividends. And there’s a good reason for that.

Dividends typically represent a portion of the company’s profits being paid back to shareholders. Unfortunately, most lithium companies listed on the Australian bouse haven’t yet turned a profit.

Major names like Core Lithium Ltd (ASX: CXO), Lake Resources N.L. (ASX: LKE), and Liontown Resources Limited (ASX: LTR) are still in exploration or development phases – a far cry from bringing in notable amounts of cash.

Of course, certain lithium stocks have previously paid dividends. Neometals Ltd (ASX: NMT), for example, has offered five special cash dividends in its history, with the latest handed out in early 2020.

On top of that, one broker tips Allkem Ltd (ASX: AKE) will offer its maiden dividend in financial year 2023, as my Fool colleague James reports.

But a middle ground between investing in lithium and snapping up dividend shares already exists on the ASX.

Some S&P/ASX 200 Index (ASX: XJO) companies are both regular dividend payers and involved with the battery-making material.

3 ASX lithium shares that pay dividends

Mineral Resources Limited (ASX: MIN)

Mineral Resources might not be the first stock to come to mind when shopping for ASX lithium shares.

While most of the company’s business is in providing mining services, it also operates two hard rock lithium mines in the Pilbara region.

Mineral Resources currently offers a 3% dividend yield.

Rio Tinto Limited (ASX: RIO)

ASX 200 materials giant Rio Tinto is also involved with lithium.

It’s sourcing lithium from mining waste rock in California. The company is also battling to get its Jadar lithium project – located in Serbia – off the ground.

Rio Tinto shares are trading with a whopping 10.9% dividend yield right now.  

Wesfarmers Ltd (ASX: WES)

The final ASX lithium share offering dividends might come as a surprise. ASX 200 retail-focused conglomerate Wesfarmers does indeed have a finger in the lithium pie.

It made a final investment decision to develop the Mt Holland lithium project in 2021.

Wesfarmers’ dividend yield currently sits at 3.6%.

The post Do any ASX lithium shares pay dividends? appeared first on The Motley Fool Australia.

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More reading

• Why is the Rio Tinto share price sinking today?
• ASX 200 better buy: Wesfarmers or Woolworths?
• 2 excellent ASX dividend shares experts rate as buys
• What’s impacting ASX 200 retail shares today?
• Time is running out to secure the Rio Tinto dividend. Here’s what you need to do

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 positions in and has recommended Wesfarmers 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 has been running hot recently after a major company announcement last week.

Shares in Sayona Mining are trading up 8.3% at 29 cents apiece at the time of writing – a surge of 96.6% in this month alone. 

The lithium company’s share performance far exceeds that of the S&P/ASX 200 Materials Index (ASX: XMJ), which is up 4.07% for the same period.

Let’s look into why investors are bullish on this stock.

What happened last week?

The Sayona Mining share price is riding high after the company announced on Thursday it was restarting its North American Lithium (NAL) operation. Production of its first spodumene concentrate is due to begin in the first quarter of 2023. 

Investors are likely hoping this new development will put Sayona Mining on a course toward operational profitability. As my Fool colleague Zach Bristow pointed out, it’s only profitable when certain accounting measures are applied.

The predicted fall in the price of lithium carbonate and spodumene concentrate are headwinds for Sayona Mining’s sentiment, as well as its operational profitability when production gets off the ground.

As reported by my colleague James Mickleboro, Goldman Sachs expects the price of lithium carbonate to fall to US$11,500 past 2025, down from the average expected forecast of US$46,640 for this year.

Over the long run, the price of spodumene concentrate is expected to fall as much as US$800. This is down from an average forecast of US$3,679 for this year.

The Sayona Mining share price has been in overextended territory since Monday, so a downwards correction by bears towards its mean price of $0.158 may be on the cards.

Sayona Mining share price snapshot

The Sayona Mining share price is up 89.29% year to date. Shares in the company are significantly out-performing the S&P/ASX 200 Index (ASX: XJO), which has contracted 7.87% this year.

Sayona Mining’s market capitalisation is $2.3 billion, based on the current share price.

The post Why has the Sayona Mining share price rocketed almost 100% in a month? appeared first on The Motley Fool Australia.

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More reading

• Why is the Sayona Mining share price surging 15% on Monday?
• Why Appen, Centuria Industrial, NRW, and Sayona Mining shares are pushing higher
• Sayona share price lights up on ‘rapid progress’ toward production
• Up 33% in July, why did the Sayona share price have such a stellar month?
• Is ASX lithium company Sayona Mining profitable?

Motley Fool contributor Matthew Farley 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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History is dotted with examples of how new technologies have unseated industry leaders, and ASX lithium shares might be next to face- this risk.

The Graphene Manufacturing Group Ltd (CVE: GMG) claims its batteries are better than its lithium-ion competitors.

The Brisbane company, which is listed on the TSX Venture exchange in Canada, says its graphene aluminium-ion batteries can charge 70 times faster and are longer lasting, reported the Australian Financial Review.

Graphene vs. lithium batteries

The new batteries are also believed to be kinder to the environment than the lithium-based incumbents, which use rare earths. The mining and processing of rare earths has created controversy due to the amount of pollution generated.

Graphene Manufacturing Group’s founder and managing director Craig Nicol says that his battery is almost net zero. He also pointed out that his battery is less prone to fires compared to the lithium powered ones.

Are ASX lithium shares facing a graphene shock?

ASX lithium shares are market darlings due to surging demand for electric vehicles that are powered by lithium-ion batteries. But sentiment could turn against the sector if graphene aluminium-ion batteries prove to be a better substitute.

So far investors seem unperturbed. The Allkem Ltd (ASX: AKE) share price, Pilbara Minerals Ltd (ASX: PLS) share price and IGO Ltd (ASX: IGO) share price are sitting on 20% plus gains each over the past year.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has slumped around 8% into the red. Lithium, nickel and copper are regarded as the metals of the future due to the global electrification trend.

The snubbed $8.3 billion bid for OZ Minerals Limited (ASX: OZL) by BHP Group Ltd (ASX: BHP) will further bolster sentiment towards battery metal miners, like ASX lithium shares.

What’s powering GMG’s batteries  

The Graphene Manufacturing Group (GMG) has an informal partnership with Rio Tinto Limited (ASX: RIO). GMG will integrate some of its energy-saving products into Rio Tinto’s operations, while the mining giant will supply GMG with aluminium needed to manufacture the batteries.

GMG developed a way to extract graphene from gas as opposed to the more costly way of extracting it from graphite. The company also has the exclusive licence from the University of Queensland for technology used in battery cathodes.

The technology uses nanotechnology to insert aluminium ions inside GMG’s graphene platelets, reported the AFR. This allows GMG to make a denser battery that holds more charge.

Time to sell your ASX lithium shares?

Graphene is a form of carbon consisting of a single layer of atoms arranged in a two-dimensional honeycomb lattice nanostructure.

While it’s too early to say if this material can displace lithium, which is ubiquitously used in almost all batteries, investors in ASX lithium shares should keep a close eye on this development.

The post What is graphene and could it threaten the future of ASX lithium shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Allkem Limited, BHP Billiton Limited, Independence Group NL, OZ Minerals Limited, and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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

What happened

Shares of Amazon.com (NASDAQ: AMZN) climbed 3.5% on Wednesday after a closely watched price index indicated that inflation was moderating. 

So what

The consumer price index (CPI) increased 8.5% year over year in July. That was better than the 8.7% rise economists expected and a notable improvement from the 9.1% year-over-year increase in June. 

The CPI measures the prices Americans pay for a wide array of goods and services. The index is widely used by investors, businesses, and government officials to monitor inflation levels.

The moderation in CPI growth was largely due to lower energy prices. Gasoline prices declined by 7.7% in July, which helped to offset higher food and housing costs.

Investors took the news as a signal that inflation might have already peaked. That could allow the Federal Reserve to pull back on its plan to raise interest rates, which many analysts feared could drive the economy into a recession.

With these risks now likely reduced, investors bid up stocks. The S&P 500 Index (SP: .INX) and Nasdaq Composite (NASDAQ: .IXIC) indexes both climbed more than 2% on Wednesday.

Now what

The positive CPI news was particularly bullish for Amazon. The e-commerce giant has seen its shipping and delivery costs soar due to higher gas and diesel prices. Should energy prices continue to fall, Amazon’s profit margins should rebound.

A lower probability of a recession also benefits Amazon. Consumers tend to spend less on discretionary items during economic downturns. But if the economy were to continue to grow at a decent clip, consumer confidence and discretionary spending would likely rise. And that would no doubt lead to higher sales for the online retail titan.

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

The post Why the Amazon share price rose today appeared first on The Motley Fool Australia.

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More reading

• The 1 reason Amazon shares may not be a buy right now
• Should investors pounce on Amazon stock during the Nasdaq tech sell-off?
• Amazon stock shrugged off bad news: Here’s what that means for investors
• Amazon share price surges 13% after hours on revenue beat
• The genius move Amazon shareholders have been hoping for

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Joe Tenebruso has the following options: long January 2024 $100 calls on Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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