How does $1,400 of passive income each year sound? Think of the weekend getaways, wining and dining, and extra time with family that could provide. It would even protect hard-earned cash from Australia’s current 6.9% inflation rate.

And all it would take is $20,000 invested in S&P/ASX 200 Index (ASX: XJO) shares with a 7% dividend yield.

Though, achieving such a yield might be easier said than done.

Here’s how I would invest $20,000 in ASX 200 shares if I were aiming to receive a 7% dividend yield.

How I’d find ASX 200 shares to provide a 7% dividend yield

Of course, the first step to building a portfolio capable of providing a 7% yield is stock picking.

I would likely seek out five to 10 shares to invest between $2,000 and $4,000 into, thereby diversifying my portfolio and reducing potential risks.

That’s particularly important, as past performance doesn’t guarantee future performance. A dividend giant today may well be relatively average in 12 months’ time – just ask Fortescue Metals Group Limited (ASX: FMG).

Perhaps surprisingly, I wouldn’t even consider a company’s yield when seeking stocks to buy.

My ultimate goal is to achieve a 7% yield, not just today but also over the years to come.

Thus, I would focus on finding quality companies I like as long-term investments. Personally, I believe a quality business is one offering both a strong balance sheet and competitive advantages over its peers.

Having found a few such businesses, I would consider if they’re trading at a good price. If they are, then I would look at their dividend yield.

A game of averages

Fortunately, to achieve a 7% yield across five to 10 ASX 200 shares, I could buy various stocks with various yields.

Rio Tinto Limited (ASX: RIO), for instance, offers an 8% dividend at the time of writing. Meanwhile, Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are trading with a 6% yield.

Together, they could see an investor realising a 7% yield that may be better protected against a downturn in either the banking or materials sector.

Finally, I wouldn’t necessarily ‘set and forget’ my new dividend-paying portfolio.

While passive income is, indeed, passive, it might need tweaking from time to time to continue providing my targeted income stream.

Keeping an eye on my investments and rebalancing my portfolio as needed will likely allow me to continue reaping my targeted 7% yield.

The post Here’s how I’d invest $20,000 in ASX 200 shares for a 7% dividend yield appeared first on The Motley Fool Australia.

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More reading

• Why did ASX 200 iron ore shares like BHP have such a cracking Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Brokers name 3 ASX shares to buy today
• Why Beach, Chalice Mining, Nitro, and Rio Tinto shares are rising today

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 good news for income investors is that there are a number of quality ASX dividend shares to choose from on the ASX 200 index.

Two that have been tipped as strong buys are listed below. Here’s what analysts are saying about them:

Elders Ltd (ASX: ELD)

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

Goldman Sachs currently has a conviction buy rating and $18.40 price target on the agribusiness company’s shares.

Its analysts believe that recent share price weakness has been unwarranted and has created a buying opportunity for investors. It commented:

We view the share price reaction […] as unwarranted. The fundamentals of this company remain unchanged, and strong in our view. The Australia agricultural environment is structurally strong and ELD is uniquely placed to benefit as a highly diversified Agribusiness with broad geographic and segment exposure. Farmer balance sheets and industry data are showing strong intentions for investment and expanded production in the context of a tightening global agricultural market.

In respect to dividends, the broker is expecting fully franked dividends per share of 53 cents in FY 2023 and 57 cents in FY 2024. Based on the current Elders share price of $9.99, this will mean yields of 5.3% and 5.7%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share that has been named as a strong buy is banking giant Westpac.

The banking giant has been included on Morgans’ best ideas list with an add rating and $25.80 price target. This compares to the latest Westpac share price of $23.44.

Morgans likes Australia’s oldest bank due to its business transformation initiatives. It commented:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

As for dividends, the broker is forecasting fully franked dividends per share of 153 cents in FY 2023 and 159 cents in FY 2024. Based on the current Westpac share price, this will mean yields of 6.5% and 6.8%, respectively.

The post Earn passive income with these strong ASX 200 dividend shares: brokers appeared first on The Motley Fool Australia.

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More reading

• After sliding into the red last month, what’s the outlook for the Westpac share price in December?
• 3 passive income ASX 200 dividend shares that can help make you richer
• Morgans names 2 more of the best ASX shares to buy in December
• 5 things to watch on the ASX 200 on Tuesday
• Will the RBA raise rates again next week? Here’s what Westpac expects

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Elders and Westpac Banking. 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 Liontown Resources Ltd (ASX: LTR) share price closed just 0.28% lower at $1.79 on Friday after recovering late from a low of $1.72 in early afternoon trade.

Its fellow ASX lithium shares also closed in the red following forecasts from top broker Goldman Sachs that lithium commodity prices will go materially lower from the second half of 2023. But not before they also gained some last-minute ground for investors in the closing moments of Friday trading.

After the dust settled, the Allkem Ltd (ASX: AKE) share price clocked in to register a drop of 1.43% to $13.10. The Core Lithium Ltd (ASX: CXO) share price finished down 0.42% at $1.18. Pilbara Minerals Ltd (ASX: PLS) shares were 0.22% lower at $4.47.

What did Goldman say about the Liontown share price?

According to The Australian, Goldman Sachs cut its 12-month share price target on Liontown to $1.65.

It also initiated coverage on Core Lithium and slapped it with a sell rating and a $1 price target.

In a note, Goldman said:

We see Core Lithium as having run ahead of fundamentals, Liontown looks relatively less expensive.

Which ASX lithium shares does Goldman recommend?

Goldman also initiated coverage on Allkem, giving it a buy rating and nominating it “our preferred lithium exposure”. Goldman has a 12-month price target of $15.20 on Allkem shares.

It commented:

With the pricing backdrop, we prefer low cost producers with quality resources to underpin growth optionality and vertical integration over developers.

With optionality across the Americas and Australia on the largest lithium resource in our coverage growing equity LCE production >4x by FY27E, and at a discount to peers at 1.02x NAV (peer average 1.3x), Allkem is our preferred lithium exposure.

Goldman also likes Mineral Resources Limited (ASX: MIN), with a share price target of $94. Although it’s a diversified mining company, Mineral Resources is a global top-five lithium producer. 

Liontown looks good to Macquarie

Liontown also has its fans among brokers.

As my colleague James reported recently, Macquarie sees big value in the Liontown share price.

Last month, the broker retained its outperform rating and lifted its share price target to $3.40.

That’s more than double the target given by Goldman Sachs this week.

The Liontown share price slipped 14.59% this week.

The post Down 14% this week, are Liontown shares now ‘relatively less expensive’? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 lithium shares taking another beating on Friday?
• Why are ASX 200 lithium shares taking a lashing today?
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why did the Sayona Mining share price have a tough run today?

Motley Fool contributor Bronwyn Allen has positions in Allkem, Core Lithium, and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Iron ore shares including BHP had a top run on the market on Friday.

• BHP Group Ltd (ASX: BHP) shares rose 2.7%
• Rio Tinto Limited (ASX: RIO) shares jumped 2.32%
• Fortescue Metals Group Limited (ASX: FMG) shares lifted 2.84%

For perspective, the S&P/ASX 200 Index (ASX: XJO) climbed 0.52% on Friday.

Why did iron ore shares lift?

BHP, Rio Tinto and Fortescue are all major iron ore producers.

The iron ore China Futures contract has risen 1.2% to US$110.35 on the Singapore Exchange at last look.

Iron ore prices and other base metals lifted amid optimism about China’s reopening. China has relaxed restrictions on quarantine and domestic travel.

China is the largest iron ore importer in the world. Iron ore is used to make steel.

News out of the world’s largest iron ore producer Vale SA (NYSE: VALE) also appeared to impact iron ore prices. ANZ economist Kishti Sen said in a research note this morning:

Iron ore also gained amid the positive developments in the property sector. This was aided by supply side issues. Vale doesn’t expect to get production back to the level it was at prior to the 2019 dam disaster. This year’s output will be around 310 mt. It also lowered its 2023 guidance from 325 mt to the same as this year.

As my Foolish colleague Bernd reported today, Citi is predicting the iron ore price could hit US$150 per tonne. Analysts said:

We believe iron ore prices could rally towards $US150 a tonne if China rolls out meaningful credit easing in the next three [to] six months.

However, ANZ commodity strategists Daniel Hynes and Soni Kumari, in a research report yesterday, have a different price outlook. Analysts are tipping iron ore prices to “remain in the range of US$100/t”. The analysts said:

The latest measures announced by the Chinese government to support property lending could provide short-term support for the market.

However, a sustained improvement in property sales will be required for steel demand to rise next year. Poor profit margins and winter output curbs continue to weigh on steel productionthrough winter, and subsequently iron ore demand.

Share price snapshot

The BHP share price has risen 32.65% in the last year.

Rio shares have lifted 22.3% in the past 52 weeks.

Fortescue shares have climbed 17.21% in the past year.

The post Why did ASX 200 iron ore shares like BHP have such a cracking Friday appeared first on The Motley Fool Australia.

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More reading

• The difference between uncertainty and risk’: 5 ASX shares this fundie is backing for 2023
• Will Fortescue’s green hydrogen plans really pay off for shareholders?
• Brokers name 3 ASX shares to buy today
• Why Beach, Chalice Mining, Nitro, and Rio Tinto shares are rising today
• Forecast for ASX 200 iron ore shares in 2023: bull vs bear

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

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Is the economic worm turning?

So, the RBA put rates up, again, this week. Making it the 8th consecutive month, the one of the fastest rates of increase on record, and the highest official cash rate in a decade.

They’ve now added 3% to the official cash rate since May.

And, if their most recent statement is anything to go by, they’re not done yet. No guarantees, and they have committed to future decisions being ‘data dependent’, but that’s their expectation.

Me?

I think it was the right thing to do. Inflation remains far too high, and the RBA is (rightly) determined to take excess demand out of the economy. Rates aren’t the only way to do that, by the way, but they’re the traditional option, and the only one at the Reserve’s disposal (the others would require government action).

But I also think they’d be very happy that there’s no scheduled meeting in January. It gives them the opportunity for a ‘Clayton’s pause’ – the pause you have when you’re not having a pause (kids, ask your parents about the non-alcoholic Clayton’s – those were the days when you couldn’t sell a non-alcoholic gin for $60 and have people fall over themselves to buy it!)

No meeting in January means it’ll be at least two months until the next rate rise – giving the RBA ample time to see what their 2022 handiwork has achieved without actually having to make a call.

And economically? It kinda feels like the worm is starting to turn. Retail sales were down for October (but Black Friday sales in November might tell a different story) and corporate profits were down 12% in the last quarter.

Now, GDP is still positive. And unemployment remains low. But the ‘full steam ahead’ vibe of a couple of months ago now seems to be squarely in the rear vision mirror. We’ll see.

For whom the bank branch bell tolls

Speaking of slowdowns, some sobering numbers out this week suggest that Australian bank branch numbers have shrunk by almost one-third over the past five years, and by 300-odd in the last 12 months alone.

That’s… a lot.

For all of the talk about the end of certain industries – think printed newspapers – it’s possible that banks’ branch networks might get there first.

Oh, there might be a few branches in big population centres for those things that just can’t be done digitally, but that’ll be it.

And I don’t think it’ll be far away.

Banks are looking to cut costs. ANZ this week launched a ‘digital mortgage’ that it says will be suitable for up to 30% of us by 2024. And we’re just not using bank branches anymore.

Truly, were it not for the social and political pressure, I’d imagine we could have maybe 25% – 50% fewer branches already. But a slowing economy and market pressures will make the banks bite the bullet at some point relatively soon.

Be careful of hindsight bias

The RBA is getting grief. Again.

This time, it’s because Governor Lowe ‘ignored a warning not to give calendar-based forecasts’ (i.e. rates won’t go up until 2024).

Now, I’ve said before that he shouldn’t have done it. It’s unnecessary, and only exposes you to the very criticism he’s getting now.

But the current brouhaha is because he was apparently ‘warned’ in an ‘internal report’ not to do it.

See… he was told, but he didn’t listen!

To which I say… spare me!

Why? Well, let me explain.

Investors have their own version of this problem: the usual suspects who predict a market crash every year.

Eventually… they’ll be right.

Then they’ll say they told us so.

But were they? And were they right, or just lucky?

One more example?

Let’s say I write a report about every Motley Fool recommendation, and I send it to the boss. ‘This recommendation could go badly because…’.

Then, if it does, I trumpet my prescience. And if I’m wrong? Well, I say nothing, of course.

Heads I win. Tails I don’t lose.

But back to the RBA.

Maybe, somewhere, someone warned Governor Lowe not to increase rates in May, because inflation would be transitory. He (rightly) ignored that theoretical warning.

And so it goes. Someone is always telling you what to do. Every so often they’ll be right.

But that doesn’t mean the RBA should react to every ‘warning’ it gets. Someone has to tally the risks and the potential rewards, then make a call.

And sometimes they’ll be wrong.

It says nothing good about our ability for critical thinking and sober judgement if we expect perfection or crucify those who make mistakes.

Because the former is impossible, and the latter is unavoidable. Believing anything else is a fantasy-land… and eventually that leads to politicians of no conviction who just pander to us.

Oh…

Quick takes

Overblown: We obsess over CEO pay as if it matters. How’s that for an inflammatory statement! No, there’s no justification for anyone to be paid $21 million a year, but how much does it actually matter to the performance of our investments? They’re probably not worth that 8-figure salary, but it usually won’t impact the bottom line. Far more important is whether they’re the right people to run the company, and will create value for shareholders. Don’t get sucked into the reality TV soap opera – focus on they impact they do (or don’t) make,

Underappreciated: Back during the GFC, Apple continued to sell more and more iPhones. The ‘original’ BNPL player, Flexigroup, grew strongly. Why? In the former case, it was relatively early in the adoption of smartphones. In the latter, Flexigroup was signing up more and more retailers, even as total retail sales flatlined. Large, mature businesses often have little choice but to float up and down with the tide. Small, growing companies that are finding new audiences don’t (necessarily) suffer the same challenges. Worth thinking about in 2023.

Fascinating: Maybe I should say ‘fascinating’, in quotation marks. Lobby groups are going to lobby, and the ongoing review of the RBA is no different. It’s probably a good thing to have those lobby groups present their views, to aid the national debate, but just a reminder that none of them are truly trying to present or promote a balanced policy. Business wants changes that are good for business. The Unions want ‘full employment’ as part of an updated mandate. The Australian Council of Social Service wants more inflation. Again, all worthy inputs. Just remember they’re closer to football fans cheering on their team, rather than the referee in the middle who needs to make the calls.

Where I’ve been looking: I’ve regularly said that one of the great things about the Betashares Nasdaq 100 ETF (ASX: NDQ), available on the ASX (and in which I own units) is that the index is dominated by companies who are at the forefront of ‘creating the future’. That’s as true as it ever was, but I think we can find disruptive innovators here on the ASX, too. It doesn’t need to be out on the ‘bleeding edge’, but l’m looking for tomorrow’s winners.

Quote: “I skate to where the puck is going to be, not where it has been.” – Ice hockey great, Wayne Gretzky

Fool on!

The post Is the economic worm turning? appeared first on The Motley Fool Australia.

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More reading

• The difference between uncertainty and risk’: 5 ASX shares this fundie is backing for 2023
• Here are the top 10 ASX 200 shares today
• The Zip share price has halved since late July. What went so wrong?
• What’s driving ASX 200 gold shares to outperform this week?
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Scott Phillips has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 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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One fund manager has chosen five ASX shares that could help investors profit through an uncertain environment in 2023.

SG Hiscock portfolio manager Hamish Tagdell shared his stock picks this week in the Australian Financial Review.

Amid a backdrop of soaring inflation and rising interest rates, Tagdell made the following comments about his thesis for these shares:

One of our greatest learnings through COVID and the last number of years is understanding the difference between uncertainty and risk. Uncertainty means change, which also brings about ingenuity, entrepreneurship, and opportunity.

So let’s take a look at which shares he believes could deliver solid returns in the future.

Fundie buys up ASX energy shares

Woodside Energy Group Ltd (ASX: WDS) was one of Tagdell’s top picks. The world’s possibly lengthy transition from fossil fuels to renewables was cited as a catalyst for hydrocarbons such as gas, which Woodside produces in spades.

Tagdell said:

We’ve liked it [Woodside] for a while because we think gas is an important transition fuel in the decarbonisation debate. We think being able to do the energy transition in a reliable way is important.

Earlier this year, Wilsons equity strategist Rob Crookston mirrored Tagdell’s sentiment that natural gas will become a key commodity in the coming decades. Crookston stated that gas will end up replacing coal as the second most important energy material by 2030.

Bullish on Woodside and BHP Merger

Tagdell noted the strength of Woodside after it merged its oil and gas business with BHP Group Ltd (ASX: BHP) earlier this year.

BHP itself also earned a spot in Tagdell’s portfolio as one of his prominent holdings.

My Fool colleague Tristian noted that the merger confers several benefits that the fundie could be feeling bullish about. One of these benefits included unlocking a possible US$400 million in operational synergies.

Another part of this strength comes from his view that gas will continue to be in hot demand and that it has room for additional growth potential, as Tagdell noted:

Woodside has a strong position, post the BHP deal – it’s very well capitalised. In terms of balance sheet, it’s got good growth options through Scarborough and the West Australian developments it’s looking at. And that’s in a world where I think there’s clearly an increased demand for gas.

Tagdell deepened his position of investing in natural gas producers and cited another ASX energy share as a top portfolio pick: Cooper Energy Ltd (ASX: COE).

What else is the fundie buying?

Tagdell praised Chorus Ltd (ASX: CNU), saying it laid the foundation to generate a healthy amount of free cash flow, some of which could be diverted back to shareholders in the form of bigger dividends. He also believes that Chorus’s shares can be fetched at a discount as they are presently undervalued.

These comments come amid Chorus’s strong performance in FY22. Its top and bottom lines expanded, and it issued a final unfranked dividend of 35 cents per share.

Tagdell said:

[Chorus is] moving from investment to operating mode, and we expect a strong increase in free cash flow. That should enable them to start paying attractive dividends and on our valuation it’s trading on an eight to nine per cent free cash flow yield, or an EV to EBITDA multiple about eight times at the moment.

Qube Holdings Ltd (ASX: QUB) was the fund manager’s final pick. He cited Qube’s undervalued share price and future growth prospects as being strong reasons why the share was added to his portfolios.

Over the last 12 months or so, I think [Qube] delivered 25 per cent underlying earnings growth and is expected to post strong earnings growth into 2023.

And that’s a result of its privileged asset position. We think it’s underappreciated at the moment, trading on an attractive valuation with attractive growth over the next 12 to 18 months.

The post The difference between uncertainty and risk’: 5 ASX shares this fundie is backing for 2023 appeared first on The Motley Fool Australia.

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More reading

• Forecast for ASX 200 iron ore shares in 2023: bull vs bear
• Top broker says the BHP share price has peaked
• Own BHP shares? Here’s what China’s reopening could bring for 2023
• 5 things to watch on the ASX 200 on Friday
• 3 high-yielding ASX dividend shares that have surged more than 50% this year

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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The S&P/ASX 200 Index (ASX: XJO) ended a disappointing week on a high today. It lifted 0.53% to close at 7,213.2 points on Friday. That marks a 1.21% week-on-week loss.

Leading today’s gains was the S&P/ASX 200 Materials Index (ASX: XMJ). It rose 1.9% on the back of commodity prices.

Gold futures lifted 0.2% overnight to US$1,801.50 an ounce and iron ore futures improved 2.2% to US$109.49 a tonne. Meanwhile, copper added 0.6% amid Goldman Sachs’ bullishness.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) also recovered 1% following a dire four-session-long losing streak that saw it dump 5.7%.

On the other side of the coin, the S&P/ASX 200 Utilities Index (ASX: XUJ) fell 0.8%, weighed down by the APA Group (ASX: APA) share price.

All in all, seven of the ASX 200’s 11 sectors closed higher today. But which share outperformed all others? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s top-performing share was Champion Iron Ltd (ASX: CIA). It gained 5.15% today.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
Champion Iron Ltd (ASX: CIA)	$7.35	5.15%
Sandfire Resources Ltd (ASX: SFR)	$5.67	4.81%
BrainChip Holdings Ltd (ASX: BRN)	$0.64	4.07%
Megaport Ltd (ASX: MP1)	$6.46	4.03%
Karoon Energy Ltd (ASX: KAR)	$2.14	3.88%
Block Inc (ASX: SQ2)	$93.84	3.84%
Chalice Mining Ltd (ASX: CHN)	$6.54	3.81%
Blackmores Ltd (ASX: BKL)	$72.80	3.25%
Minerals Resources Limited (ASX: MIN)	$90.50	3.1%
Aurizon Holdings Ltd (ASX: AZJ)	$3.80	2.98%

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

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

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why Beach, Chalice Mining, Nitro, and Rio Tinto shares are rising today
• Dividend darling becomes disappointment: What happened to Fortescue shares?
• 3 top ASX 200 dividend shares I think are bargain buys right now
• I’d aim for $1 million, buying just 10 cheap ASX shares

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 Megaport. The Motley Fool Australia has positions in and has recommended Apa Group. The Motley Fool Australia has recommended Aurizon, Blackmores, and Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: ZIP) share price has cut in half since late July, however, in recent weeks it has bounced back.

Zip shares have fallen nearly 54% from $1.52 at market close on 28 July to the current share price of 70 cents.

Let’s take a look at what has been going on with the Zip share price.

What’s happening?

Zip shares have had a rough trot overall since July. However, in the past month, the Zip share price has climbed 9%.

Zip had a dramatic fall of 30% between market close on 28 July and 1 August despite no price-sensitive news from the company. US Federal Reserve data showing the economy had shrunk by 0.9% in the second quarter appeared to impact buy now pay later (BNPL) shares including Zip.

Some investors also may have been profit-taking after the Zip share price soared by more than 200% between 1 July and 28 July.

The Zip share price then fell a further 15% in August. My Foolish colleague Cathryn noted at the time this appeared to be driven by investor sentiment. Zip announced financial results on 25 August.

Zip delivered a $1.1 billion loss from ordinary activities after income tax. This was despite record revenue, up 57%, and record transaction volume.

Following these results, UBS tipped the Zip share price to halve. Analysts placed a sell rating on Zip with a 45 cent price target. Analysts said:

In FY23, managing cash burn and demonstrating a clear path to profitability will be crucial for Zip. Whilst Zip have announced a range of initiatives designed to reduce cash burn, quantifying their precise impact remains difficult; in our view material uncertainty remains.

Zip shares fell a further 37.5% between market close on 31 August and 17 October.

Zip lifts

Zip shares have climbed 16% since market close on 17 October and today.

The company’s CEO Larry Diamond predicted Zip could be the “next CBA” in an interview with the Australian Financial Review in late October. He said:

We still believe, in this market, we can be the next CBA. Why not? We have the right leadership, the best technology, and the best people. We are committed to the long term.

On 20 October, Zip shares climbed on the back of a quarterly update. Zip advised group quarterly revenue had lifted 19% year on year, while transaction volume had soared 15%.

Meanwhile, early in November, Diamond provided optimism Zip can achieve positive cash EBITDA by the first half of 2024. He said:

We expect to see the US exiting FY23 cash EBTDA positive and to neutralise the cash burn from our rest of world footprint during the second half of FY23.

We are on track to deliver positive cash EBTDA as a group in the first half of financial year 2024.

News also emerged in October that Diamond had moved to the USA, where he sees a “significant opportunity” for Zip. He said:

There is still a significant opportunity for fintech in the US, as US banks are asleep at the wheel.

Zip share price snapshot

The Zip share price has descended 86% in the last year and nearly 84% year to date.

Zip has a market capitalisation of about $494 million at the current time.

The post The Zip share price has halved since late July. What went so wrong? appeared first on The Motley Fool Australia.

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More reading

• Why did the Zip share price surge 21% in November?
• Could increased BNPL regulation be a positive for Zip shares?
• Zip share price charges higher as BNPL regulation looms large
• Boom! Why has the Zip share price soared 31% in a week?
• 3 ASX All Ordinaries shares having a cracker session on Thursday

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 Zip Co. 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) gold shares are in the green today and also solidly up for the week.

The gold stocks have benefited from a boost in the gold price.

Gold edged 0.3% higher overnight, currently trading for US$1,794.81 per troy ounce. That puts the yellow metal up 1.5% since Monday’s opening bell.

While the ASX 200 is down 1.5% since trading commenced on Monday, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller gold shares outside of the ASX 200 – has gained 0.4%.

But the big gold producers have done much better. Here’s how their shares have moved this week:

• Northern Star Resources Ltd (ASX: NST) shares are up 1.1%
• Newcrest Mining Ltd (ASX: NCM) shares are up 1.7%

• Evolution Mining Ltd (ASX: EVN) shares are up 4.2%

What’s been happening in the world of gold?

With no price-sensitive news out from the ASX 200 gold shares this week, investors look to have rewarded them for the lift in gold prices, and a potentially solid outlook for the yellow metal heading into 2023.

That solid outlook is supported by a surge in bullion demand from global central banks.

As we reported on 24 November, the World Gold Council “revealed that the third quarter of 2022 saw global central banks buying bullion at the fastest rate ever, loading up on gold worth some $20 billion”.

The biggest identified buyers at the time were the central banks of Turkey, Qatar, and Uzbekistan.

But only some 25% of the gold splurge buying was publicly reported at the time.

This saw market watchers, including Justin McQueen, senior market analyst at Capital.com, speculate that China’s central bank may have been behind some of the surge in demand.

“The rationale is that China would look to reduce their exposure to the US dollar and therefore has been stockpiling on gold,” McQueen said.

He added that central banks “excessively accumulating” gold “does provide an undercurrent of support for the precious metal”. That, in turn, would help support ASX 200 gold shares.

Indeed, the China speculation has now proven to be a fact.

As Bloomberg reports, the People’s Bank of China raised its bullion holdings by 32 tonnes in November. It was the first time China reported increasing its gold reserves in more than three years.

With 1,980 tonnes of bullion reserves, the PBoC has the sixth-largest holding in the world.

According to Giovanni Staunovo, an analyst at UBS Group AG, “Gold holdings in China as part of the total reserves are still very low, so there is probably room for further purchases down the road.”

Nicky Shiels, head of strategy at MKS PAMP SA, added, “As deglobalisation accelerates, the non-G-10 nations are expected to ‘re-commoditise’ and ramp up gold holdings.”

That too could offer some tailwinds for ASX 200 gold shares in 2023.

How have these ASX 200 gold shares performed over the year?

Over the past 12 months, the Newcrest Mining share price is down 9%; Northern Star shares are up 20%; and the Evolution Mining share price has lost 25%.

You can see the past year’s price action for the ASX 200 gold shares below.

The post What’s driving ASX 200 gold shares to outperform this week? appeared first on The Motley Fool Australia.

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More reading

• I’d aim for $1 million, buying just 10 cheap ASX shares
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• The Newcrest share price has rocketed 35% since late September. What’s going on?
• Why Air New Zealand, Chalice, Evolution, and Origin shares are rising today

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

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Finally, a day of green ink for the S&P/ASX 200 Index (ASX: XJO)!

After a torrid week of mostly down days, the ASX 200 looks set to snap out of its recent slump and post a positive return this Friday. At the time of writing, the ASX 200 has added a healthy 0.58%, putting the index at just over 7,215 points.

So let’s now dig a little deeper into these end-of-week moves and check out the shares that are presently at the top of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Friday

Downer EDI Ltd (ASX: DOW)

After its inaugural appearance for the week yesterday, engineering services company Downer again makes the ASX 200’s most traded shares at this point of today’s session. So far this Friday, a hefty 13.54 million Downer shares have been traded on the ASX boards.

Unfortunately for investors, this looks like a consequence of the depressing announcement Downer made yesterday.

The company fronted up to investors admitting that it had overstated $30-40 million worth of earnings. The Downer share price fell more than 20% on this news yesterday, and is down another 4% so far today to $3.66 a share.

Pilbara Minerals Ltd (ASX: PLS)

Next up we have ASX 200 lithium leader Pilbara Minerals. This session has had a sizeable 23.61 million Pilbara shares trade hands as it currently stands. There hasn’t been much in the way of news or announcements out of Pilbara recently.

So this high volume is probably a byproduct of the share price falls that Pilbara is continuing to endure. Pilbara shares have been volatile today, breaking even several times over the session.

At present, the company has lost 0.78% and is down to $4.45 a share, but has traded between $4.38 and $4.54 today.

Core Lithium Ltd (ASX: CXO)

Our third, final and most traded ASX 200 share today is none other than Pilbara’s fellow lithium stock Core Lithium.

This Friday has had a whopping 44.82 million Core shares bought and sold at this point. This could be a consequence of the dim outlook ASX broker Goldman Sachs came out with for Core this week.

As we covered at the time, Goldman has slapped a sell rating on Core Lithium, with a $1 per share price target. Core Lithium shares are down another 2.12% today, which puts its losses for the week at more than 15%. Ouch.

The post Here are the 3 most heavily traded ASX 200 shares on Friday appeared first on The Motley Fool Australia.

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More reading

• Why Bigtincan, Core Lithium, Pinnacle, and Warrego shares are dropping today
• Dividend darling becomes disappointment: What happened to Fortescue shares?
• Why are ASX 200 lithium shares taking another beating on Friday?
• 3 top ASX 200 dividend shares I think are bargain buys right now
• Carnage continues for Downer share price on Friday

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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