Category: Stock Market

Travel shares on the S&P/ASX 200 Index (ASX: XJO) are jumping today amid news that will make it easier for tourists to travel to Australia.

Qantas Airways Limited (ASX: QAN), Webjet Limited (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT) shares are all rising today.

Webjet shares are rising 2.08% today, Flight Centre shares are leaping 2.18% and Qantas shares are up 2.25%.

So what could be impacting ASX 200 travel shares today?

ASX 200 travel shares lift

ASX 200 travel shares are lifting amid news that could boost international travel numbers into Australia.

Health Minister Mark Butler announced yesterday that a COVID-19 vaccine will no longer be required for international tourists travelling to Australia. All travellers will also no longer be required to declare their status on arrival to the country. However, masks will still be required on inbound international flights.

Minister Butler said:

The chief medical officer has advised it is no longer necessary for travellers to declare their vaccine status as part of our management of COVID

Home Affairs Minister Clare O’Neil described the news as “great news for families coming home from school holidays”.

Removing these requirements will not only reduce delays in our airports but will encourage more visitors and skilled workers to choose Australia as a destination.

I know anyone who has travelled internationally since the borders have opened will find this as one less thing to worry about – especially as more Australians get back to travelling overseas.

Meanwhile, chaos erupted at Sydney airport on the weekend as Australians embark on school holiday travel, Guardian Australia reported.

Large amounts of people were seen lining up outside the terminal, the publication reported. Union strikes also had an impact on arrivals at airport train stations.

Sydney airport is crazy this morning. Check in is completely packed and bag drop line is out the door and spilling into an undercover area next to the terminal. pic.twitter.com/nJGp0z207r

— Molly Glassey (@GlasseyMolly) July 1, 2022

https://platform.twitter.com/widgets.js

Meanwhile, Adelaide Airport is also forecasting that Friday this week will be the busiest travel day since the onset of COVID-19, Indaily reports. The airport is predicting 30,000 travellers at the airport on Friday.

Share price recap

The Qantas share price has shed 5% in a year, while Webjet shares have jumped nearly 6%. Flight Centre shares have soared 15% in a year.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has lifted 9% in the past year.

The post ASX 200 travel shares leap as Australia scraps COVID-19 vaccine mandates for international arrivals appeared first on The Motley Fool Australia.

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More reading

• How did ASX travel shares perform in June?
• Top brokers name 3 ASX shares to buy next week
• Here’s why I think the Webjet share price could fly higher in 2022
• Why did the Flight Centre share price tumble 15% in June?
• Why did the Qantas share price plunge 19% in June?

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 recommended Flight Centre Travel Group Limited and Webjet 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 Lake Resources N.L. (ASX: LKE) share price has been struggling since the start of April. Despite this, the lithium explorer’s shares have soared in FY22.

Since market open on 1 July 2021, the Lake Resources share price surged from 33 cents to 78.5 cents on 30 June 2022. This represents a 138% gain.

Let’s take a look at how the financial year played out for Lake Resources.

Brilliant start to the financial year

The Lake Resources share price hit a high of $2.45 on 4 April. This was a mammoth 642% explosion on the share price at the start of the financial year.

Lake’s flagship project is Kachi in the Catamarca Province in Argentina. The company has ambitions to become a leading global producer of high-purity lithium.

On 7 July 2021, Lake announced drilling was underway at the Kachi project. The company stated the aim was to double production from the site. In late July, Lake offered eligible shareholders bonus options.

Strong quarterly results on 2 August also provided a boost to the Lake Resources share price. During the quarter, Lake garnered interest from six major banks willing to fund the Kachi project.

In late December, Lake advised drilling supported a doubling of lithium carbonate production to 50,000 tonnes per annum:

Argentina continues to be one of the few locations where lithium production can increase to assist the
significant supply gap to increasing demand.

On 14 February, Lake revealed it would fast-track three lithium projects in Argentina. These are the Olaroz, Cauchari and Paso projects. Lake set a target of 100,000 tonnes of high purity lithium by 2030 from these projects.

Tough few months to end FY22

Lake shares plummeted nearly 68% between market close on 4 April and 30 June. Between close of trading on 16 June and 23 June alone, the company’s share price shed 58%. On 20 June, news emerged that North America managing director Steve Promnitz would step down after setting up “Lake’s dominant position in Argentina”. Stu Crow was appointed executive chair for six months to manage the transition to a new CEO, board, and set up a North American presence. Lake said:

We are now establishing a North American presence to serve our off-take customers, continue to
work with our US-based technology partner, and engage capital markets.

Also potentially impacting Lake shares was a note from Goldman Sachs predicting lithium carbonate and spodumene concentrate prices to decline from 2023. Goldman predicted a long-term average of US$11,500 per tonne for lithium carbonate and US$800 per tonne for spodumene concentrate.

In more positive news, Lake Resources was added to the ASX 200 at the start of June. The company also appointed Citi and JP Morgan to coordinate debt financing for the Kachi project. On 11 April, Lake signed a non-binding agreement with the Ford Motor Company to negotiate lithium offtake for the project.

Lake has a goal of producing 100,000 tonnes per annum of lithium by 2030.

Lake Resources share price recap

At the current share price of 79 cents, the Lake Resources share price has soared 129% in a year. Although it has lost nearly 22% year to date. In the past month, Lake shares have leapt 45%, while they are down almost 2% in a week.

In the past five years, Lake shares have returned a mammoth 1,800% boost to shareholders.

The post Up 138% in a year and 1800% in five years. Why did the Lake Resources share price soar in FY22? appeared first on The Motley Fool Australia.

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More reading

• The Lake Resources share price plummeted 49% in June. Here’s why
• These were the worst performing ASX 200 shares in June
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why have ASX lithium shares had such a lousy month in June?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Goldman Sachs. 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 All Ordinaries Index (ASX: XAO) has broken into the green and trades 1.1% higher in morning trade on Monday.

Indeed, with a new month comes a new set of monthly returns. After some volatility in recent weeks, investors look to embark on a new set of investment conditions in July.

One All Ordinaries share that’s taken off today is Volpara Health Technologies Ltd (ASX: VHT). Its share price is tracing 17.02% higher from the open at 55 cents.

Investors are jumping on the breast-screening software company’s shares following a company announcement of a new contract win.

Indeed, Volpara’s management says revenue from the contract “will be material” to the company.

What did Volpara announce?

Volpara advised it has signed a contract with Radnet Management, Inc. for an initial contract period of 42 months. The contract has a mutual option to extend.

The company says Radnet is the largest provider of outpatient imaging services in the United States with 353 imaging centres and 9,000 employees.

Under the agreement, Radnet will implement the Australian company’s Volpara Analytics and Volpara Risk Pathways software throughout its various sites.

The company’s announcement said:

Planning for the implementation has begun, with go-live projected in 2023.

Management expects that revenue generated under the agreement will be material to the company.

Speaking on the announcement, Volpara’s CEO Teri Thomas was “pleased to partner” with Radnet. She said:

This is a broader partnership than a simple software purchase. We look forward to a deep engagement with Radnet as part of our focus on industry impacts and customer success of ‘elephant-sized’ industry leaders.

In the last 12 months, the Volpara share price has slipped around 57% into the red.

The post This ASX All Ordindaries healthcare share is ripping 17% higher amid a new contract win appeared first on The Motley Fool Australia.

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More reading

• Here’s where I’d invest $3,000 into ASX growth shares today

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 positions in and has recommended VOLPARA FPO NZ. The Motley Fool Australia has positions in and has recommended VOLPARA FPO NZ. 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 Bubs Australia Ltd (ASX: BUB) share price is edging higher today following a market update from the company.

At the time of writing, the infant formula company’s shares are fetching at 64.5 cents apiece, up 4.03%.

Let’s take a look at what management provided to the ASX this morning.

What did Bubs announce?

In its update released to the ASX, Bubs advised it entered into supply agreements with two new retail groups.

This comes ahead of the fourth plane delivery to the United States scheduled on 6 July under the Operation Fly Formula. Management noted that all 90,000 baby formula tins onboard worth $3 million in gross revenue have been presold.

The supply agreements are with a supermarket chain based in Texas, H-E-B Grocery Company, and American supercentre chain, Meijer.

Furthermore, 22 state agencies in the US have authorised Bubs Infant Formula products as suitable under the WIC program.

The WIC program is a special subsidy supplement nutrition program from the United States Government for women, infants and children.

Evidently, this opens the door for Bubs products to hit more retailers across the country.

On another note, management noted that Bubs infant formula products will receive the benefit of tariff concessions under the AUSFTA Agreement.

This comes after the United States and Australian Government held discissions surrounding the correct tariff classification of Bubs Infant Formula products.

Bubs founder and CEO, Kristy Carr commented:

We are grateful for the opportunity to assist parents under the WIC Program. As Bubs continues to replenish retailer shelves with up to six Bubs Infant Formula products, it is comforting that many more American parents will have the opportunity to access our clean nutrition that is and will continue to be available on shelves.

We are thankful to the U.S. and Australian Government for their assistance in helping us understand our tariff obligations. It is great to see that the strong trade relations and reciprocal recognition of food standards between the two countries have reflected in greater market access for our category, particularly during this time of crisis for American families.

Bubs share price summary

Despite a difficult 12 months amid COVID-led channel disruptions, the Bubs share price has gained 40% over the period.

The company’s shares touched a 52-week high of 86 cents on the back of the supply agreement with the United States.

However, since then, its shares have retraced due to market volatility across the ASX which weighed down Bubs shares.

Based on valuation grounds, Bubs commands a market capitalisation of around $379.92 million.

The post Why is the Bubs share price taking off today? appeared first on The Motley Fool Australia.

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More reading

• Best ASX shares to buy in July 2022
• Bubs share price drops despite new Target deal
• Where to find value in growth? Here are 2 ASX shares I’d buy in July
• Why ANZ, Block, Bubs, and PayGroup shares are pushing higher
• Bubs share price up 4% on further US update

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended BUBS AUST FPO. 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 Block Inc (ASX: SQ2) share price has started the week strongly.

In late morning trade, the payments company’s shares are up over 5% to $92.57.

Why is the Block share price charging higher?

Investors have been bidding the Block share price higher today following a rebound in the tech sector.

This follows a solid night of trade for tech stocks on Wall Street on Friday, which saw the company’s NYSE listed shares rise 4%.

The Block share price then edged slightly higher in after hours trade to end the week at US$63.99.

Based on current exchange rates, that would equate to approximately $94.10 for its ASX listed shares, which is a touch ahead of where they trade currently.

It isn’t just Block that is trading higher today in the tech sector. The S&P ASX All Technology index is up 1% at the time of writing thanks to gains from the likes of WiseTech Global Ltd (ASX: WTC) and Xero Limited (ASX: XRO).

However, despite this rise, the S&P ASX All Technology index remains down by a disappointing 37% since the start of the year.

The post Why is the Block share price racing 5% higher? appeared first on The Motley Fool Australia.

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More reading

• Should investors zero in on the Xero share price in July?
• 5 things to watch on the ASX 200 on Monday
• The Xero share price lost 14% last month. Here’s the tea
• What on earth happened to ASX 200 tech shares in June?
• Brokers name 3 ASX shares to buy today

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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.

The stock market just wrapped up its worst first half in more than 50 years. The benchmark S&P 500 index is down 21% so far in 2022, and the tech-heavy Nasdaq Composite index is down by 30%. And many of the most widely held stocks in the market are down by 50% or more this year, especially those of fast-growing businesses.

Amid all the volatility, every investor has the same question: When will things start to get better?

While none of us have a crystal ball that can accurately predict the future, the answer to that question will be directly connected to the issues that have caused the market’s decline so far this year. Let’s lay those out, and consider the potential catalysts that could cause it to rebound — or move even lower — in the second half.

Why has the stock market fallen so steeply this year?

In a nutshell, we’ve had a perfect storm of negative catalysts. Let’s run through some of the biggest.

Inflation: After many central bankers and economists repeatedly assured us that any surges in inflation caused by the pandemic’s secondary effects would be “transitory,” we’ve all come to realize that’s not the case. U.S. inflation is at its highest level since the early 1980s, and the Federal Reserve is aggressively trying to get it back under control. This has led to fears that its fiscal tightening will trigger a recession. 

Rising interest rates: In its inflation-fighting efforts, the Fed has raised benchmark interest rates significantly from their pandemic lows of near zero, and this has driven consumer interest rates upward too. For example, the average rate for a new 30-year mortgage has increased from about 3% at the beginning of the year to just under 6% now. So, not only is inflation making things cost more, but borrowing has become far more expensive.

Declining consumer confidence: When consumers don’t feel confident about the economy, they spend less money. That’s bad for business. And according to the latest report from the Conference Board, consumer confidence is at its lowest level in almost 10 years.

War: Growth stocks had been under pressure since late 2021, but there’s a solid case to be made that the event that triggered the broad market decline was when Russia invaded Ukraine. The short explanation is that markets hate uncertainty, and wars in economically vital regions bring a lot of uncertainty to the table. 

There are other factors in play as well, such as ongoing supply chain disruptions, labor shortages, and wage pressures on businesses, just to name a few.

Catalysts that could move the market in the second half

It’s important to realize the stock market is largely a forward-looking indicator. In other words, the price of stocks doesn’t necessarily reflect the current state of things, but what the market expects the state of things will be. And this is true for individual stocks as well.

Right now, investors expect inflation to run hot for the foreseeable future. The market expects that the Fed will raise the federal funds rate by another 175 basis points or more by the end of this year alone. There’s no end in sight for the war in Ukraine. The market expects consumer spending to decline. And the market is starting to expect a recession to begin in the near future.

So if any of these things turn out better than the market expects, it could lead to a rebound in the second half of 2022. For example, if the data clearly starts to show inflation has peaked and is beginning to decline, it could trigger a market rally. If the Ukraine conflict gets resolved, investors could breathe a sigh of relief. You get the idea.

It’s important to recognize that the opposite is true as well. For example, if U.S. inflation — currently in the 8% to 9% range year over year — spikes into the double-digit percentages, it could result in another downward move for the broad market.

Keep your eye on the long term

The bottom line is that while we know what catalysts would be generally positive or negative for the stock market, we have no idea if and when they will actually happen. So there’s simply no way to predict with any degree of accuracy what the stock market will do for the rest of the year.

This is why we are so steadfast in our advice that long-term investing is the smart way to go. The stock market is down 21% so far this year and it could certainly fall even further if things don’t go well in the near term. But historically speaking, investing during the periods that follow market drops of 20% or more has worked out very well from a long-term perspective. I have absolutely no idea what the stock market will do over the next six months. But I have every confidence that in 20 years, it will be much higher than it is today. 

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

The post Down 21%, is the stock market ready to recover in the back half of 2022? appeared first on The Motley Fool Australia.

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More reading

• Why is the Bubs share price taking off today?
• Why is the Block share price racing 5% higher?
• Why did the Evolution share price freefall 38% in June?
• Why did the BHP share price have such a lousy FY22?
• What’s going on with the Firefinch share price?

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.

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

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A month of volatile trading conditions led the Evolution Mining Ltd (ASX: EVN) share price to sink 38% last month.

At the start of June, the gold miner’s shares picked up from $3.84 but finished at $2.38 on June 30.

Across the sector, the S&P/ASX 200 Resources (ASX: XJR) index declined by roughly 11% over the same time frame.

Nonetheless, the beginning of July has led Evolution shares to trade sideways as investors remain cautious for the time being.

At the time of writing, the mining outfit’s shares are up 4.20% at $2.48.

What impacted Evolution shares in June?

Investors sold off the Evolution share price following concerns about further market falls in 2022 along with a business update.

A downbeat economic outlook impacted by rampant inflation and rate hikes by major central banks weighed on investor sentiment.

This led to consumer confidence dropping to a 16-month low in the United States, whilst GDP contracted 1.6% for the first quarter of 2022.

However, a business update released by the company on June 27 drove Evolution shares to plummet almost 22%.

An expected fall in annual gold production along with higher all-in-sustaining-costs (AISC) will drag down its FY22 guidance.

Subsequently, the price of gold continued to tread lower, fetching just above the psychological US$1,800 barrier.

This means that a decline in the price of the yellow metal translates to a loss of potential revenue for Evolution.

It appears that investors have been turned off by the company’s misfortunes with heavy trading volumes occurring last week.

Evidently, this has put selling pressure on Evolution shares as investors seek better risk/reward opportunities.

Is now the time to buy into the Evolution share price?

The Evolution share price could be trading at attractive levels. As reported by my Foolish colleague, Brendon, UBS upgraded its rating on the miner’s shares to a buy.

The broker believes there is still significant value in Evolution and has put a 12-month price target of $4.05.

Based on the current share price, this represents a 63% upside for investors.

Evolution commands a market capitalisation of approximately $4.55 billion.

The post Why did the Evolution share price freefall 38% in June? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Do Evolution Mining shares pay a dividend?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• These 3 ASX gold mining shares are digging new 52-week lows today
• 5 things to watch on the ASX 200 on Thursday

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 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 BHP Group Ltd (ASX: BHP) share price dropped in FY22. It wasn’t just a small falter either; it was a fall of around 17.5%.

It dropped enough that the total shareholder return — the combined share price and dividend total return — was negative in the mid-single-digits, according to CMC Markets. That’s despite the large dividends the miner paid.

As a resource business, changes in commodity prices can have a significant influence on what investors believe a company can achieve in terms of future revenue, net profit after tax (NPAT), cash flow and dividends. Each of those financial measures can also have a sizeable influence on the BHP share price.

As it turned out, the BHP business underwent quite a few changes during FY22.

Volatile iron ore price

The iron ore price was particularly strong at the start of FY22. At one stage, it was above US$200 per tonne amid strong demand from China, the main buyer of iron ore.

BHP generates a significant portion of its profit from iron ore, so changes in the iron ore price can have a sizeable impact on the profitability of the business.

In the first half of FY22, BHP’s iron division generated almost US$10 billion of the US$15.6 billion continuing operations earnings before interest and tax (EBIT). In FY21, iron ore generated US$24.3 billion of the US$30.3 billion EBIT.

By November 2021, the iron ore price had fallen to below US$100 per tonne. This also saw the BHP share price fall below US$36 briefly.

While the iron ore price is still above US$110 per tonne currently, it has fallen by more than US$20 per tonne over the last month, reducing the potential profit from BHP’s iron division.

Petroleum divested

Investors also have to weigh up what BHP’s profitability will be going forward without the company’s gas and oil segment after BHP divested it to Woodside Energy Group Ltd (ASX: WDS).

The plan was that BHP shareholders would get Woodside shares as payment for the BHP division. At the time of the announcement, it was expected to create a global top 10 energy company by production and the largest energy company listed on the ASX.

This combined company is expected to have “a high margin oil portfolio, long life LNG (liquified natural gas) assets and the financial resilience to help supply the energy needed for global growth and development over the energy transition”.

However, that segment is no longer in the BHP portfolio and not generating the earnings it was when it was part of the BHP business.

Big FY22 dividend expected

FY22 is now over but shareholders will still benefit from the payment of the final dividend adding to the total FY22 dividend, which is expected to be large.

Indeed, CMC Markets suggests BHP could pay a total FY22 dividend of $4.91 per share, equating to a grossed-up dividend yield of 17.5%.

The broker Macquarie isn’t expecting the dividend to be quite as big, however. It’s projecting a grossed-up dividend yield of 15.8% from BHP for FY22.

The post Why did the BHP share price have such a lousy FY22? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Why Argosy Minerals, BHP, Ingenia, and Woodside shares are dropping today
• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop
• These ASX 200 mining shares are digging a deeper hole on Friday
• Why did the BHP share price take a tumble in June?

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 Firefinch Ltd (ASX: FFX) share price won’t be returning to trade on Monday.

This morning the struggling gold miner requested that its suspension continue until the end of July.

What’s going on with the Firefinch share price?

The Firefinch share price was halted and then suspended originally while it prepared to release an update on the operational performance and production guidance of the Morila Gold Project in Mali.

However, with that now released, the company has requested that its suspension continue while it seeks to finalise funding.

Management notes that this funding is being designed to place the company in a more robust and sustainable working capital position. It will also support the capital investment required to take the operations to a long term sustainable and profitable operation of scale.

Operational update

In respect to its operational update, things have not been going well for the company and its Morila Gold Project. The release reveals that gold production during the June quarter was estimated to be 13,300 ounces. This compares to guidance of 17,000 ounces to 20,000 ounces.

Management advised that this has been driven largely by poor equipment availability, which has been exacerbated by the delayed delivery of additional mining equipment. This delay is a result of sanctions imposed on the State of Mali restricting the movement of goods.

Unfortunately, this also means that its production ramp up is behind schedule and its calendar year guidance has been withdrawn.

Costs rising

But it gets worse. Firefinch has experienced significant cost pressures in the last quarter. This has included material increases in diesel prices, the cost of explosives, and other consumables

Management is hoping to offset this by creating a new mine plan to target 8,000 to 9,000 ounces of gold production per month in the short term. The company is also cutting costs by reducing its board and putting capital projects on hold. Combined, this is expected to move the operation to positive operating cashflow.

But in order to achieve its goals, it expects to require funding via a capital raising. Firefinch is currently in the process of determining how much it will require and the structure of this capital raising.

Management commentary

Firefinch’s executive chairman, Dr Alistair Cowden, remains positive on the company’s longer term outlook. He said:

A confluence of events, including cost inflation, ECOWAS sanctions and contractor performance has resulted in underperformance at Morila. The Board has acted decisively to address this with management changes, cost cutting, a pivot in the mining strategy and the acceleration of a new mine plan to inform the way ahead.

I also want to make it clear that the orebody has not underperformed, rather production has not ramped up as fast and as cost effectively as planned. Morila is a world-class gold deposit with extensive operational infrastructure and which has produced over 7.5 million ounces of gold and has a current resource of 2.5 million ounces. This asset, together with our stake in Leo Lithium, provides a solid underpinning to the Company.

The post What’s going on with the Firefinch share price? appeared first on The Motley Fool Australia.

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• Leo Lithium shares hit the ASX this week. Here’s what you need to know
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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 South32 Ltd (ASX: S32) share price tumbled into a bear market last month despite perceptions that miners are better placed to weather economic turmoil.

Runaway inflation, the war in Ukraine, and strong balance sheets should put ASX mining shares in investors’ good books.

But these weren’t enough to save the South32 share price from losing more than 20% in June. This means the diversified miner is officially in a bear market, which is defined as a peak-to-trough drop of 20% or more.

The South32 share price steps into a bear trap

The recent retreat in commodity prices is mainly to blame. Worries of a global economic slowdown, or even a recession, is dragging on metal prices.

This is why Dr Copper dived to its lowest level since February last year. Copper consumption is closely linked to economic activity and is seen as a bellwether for other metals. The red metal has lost around 25% of its value since its high in early March.   

That’s bad news for other industrial metals. The price of nickel shed 3.9% and zinc fell nearly 10% last week, the Australian Financial Review reported.

The South32 share price is sensitive to the weakness. The company produces a range of metals, including copper, zinc, nickel, and alumina, among others.

Conflicting market signals

But herein lies the irony. Markets have been pricing in both higher for longer inflation and weaker commodity prices for some weeks now.

Inflation expectations have been pumped up by soaring input prices – this means commodities. Rising prices are forcing central banks, including ours, to hike interest rates. That, in turn, is putting the broader S&P/ASX 200 Index (ASX: XJO) under pressure.

But if commodity prices weaken, this should theoretically flow through to slowing inflation. If so, markets may be overestimating how far the US Federal Reserve, and its global counterparts, can hike rates.

It’s difficult to see how both the falling prices of the South32 share price (and Dr Copper) and inflation expectations can be right at the same time!

Can bad news be good news for the South32 share price?

As we speak, we might already be seeing some of this inflation expectation unwind. The ASX 200 is gaining ground today following a positive lead from Wall Street on Friday. At the time of writing, it’s up 1.72% in early trade. The rally is fuelled by a retreat in bond yields – a signal that investors are paring bets on where interest rates will peak in the US.

That is not only good news for all risk assets but also ASX miners like South32 because lower rates are good for equities.

Let’s hope the renewed enthusiasm is enough to offset the falls in commodities.

The post South32 crashes into bear market in June as recession fears bite appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in South32 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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