It’s 2022, COVID-19 restrictions are continuously easing across Australia and around the world, and the travel sector appears to be regaining some lost ground lost. That’s surely good news for the Flight Centre Travel Group Ltd (ASX: FLT) share price, right?

Well, that depends on who you ask.

Flight Centre shares have dumped 19.31% so far this year to trade at $15.03 at the time of writing.

That’s more than 50% lower than they were trading prior to the pandemic. Though, the stock has lifted around 70% from its March 2020 low.

Comparatively, the S&P/ASX 200 Index (ASX: XJO) has slipped 10% so far this year and around 5% since COVID-19 took markets by storm.

So, what might the future hold for Flight Centre shares? Let’s take a look.

Could Flight Centre shares offer 30% upside?

While most brokers remain neutral on Flight Centre shares, many are tipping a notable upside for the stock.

But before we get to the bulls, let’s check in with the company’s short position.

Flight Centre has been the market’s most shorted stock for the whole of 2022 so far. Nearly 15.6% of its shares were in the hands of short sellers at last count. That means plenty of market participants believe the travel share will slip further.

Yet, Morgans, for one, is relatively optimistic on the ASX 200 travel giant. Though, the broker has noted several risk factors facing the company.

It has a hold rating and an $18.25 price target on the stock, my Fool colleague James reports.

On the company’s financial year 2022 results, Morgans senior analyst Belinda Moore said the broker expects Flight Centre to post “a strong recovery” this fiscal year.

However, its changing business model, execution, and reduced front-end airline commissions were flagged as having the potential to weigh on earnings.

Meanwhile, Flight Centre hasn’t provided guidance for financial year 2023, blaming an uncertain outlook for the industry’s post-COVID recovery.

Though, it did return to an underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) profit late in financial year 2022.

Goldman Sachs is more hopeful for the Flight Centre share price.

It has tipped the stock to lift 30% to $19.60. The broker also expects the company to return to dividends next financial year.

The post Flight Centre shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

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More reading

• Did ASX travel shares do well in September?
• Here are the 10 most shorted ASX shares
• These were the worst performers on the ASX 200 in September
• The Flight Centre share price has dumped 20% in September. What went wrong?
• Could dividends be back on the cards for Flight Centre shares soon?

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 Goldman Sachs. The Motley Fool Australia has recommended Flight Centre Travel 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 Pilbara Minerals Ltd (ASX: PLS) share price was enjoying another strong run today, up 2.9% in late morning trade, before heading sharply the other direction. Shares are currently down 3.13%.

This comes amid a wider run higher for the markets, buoyed by yesterday’s rather dovish RBA rate decision.

That’s today’s price action.

But what really impressed us is that the Pilbara Minerals share price leapt a stellar 24.9% in September, classically billed as the worst month of the year for equity markets.

How did the Pilbara Minerals share price rocket higher in September?

September did indeed live up to its poor reputation for most share investors.

From the closing bell on 31 August through to the end of trading on 30 September, the S&P/ASX 200 Index (ASX: XJO) fell a hefty 7.3%. The already battered tech sector fell even harder. The S&P/ASX All Technology Index (ASX: XTX) shed 11.5% over the month.

But the Pilbara Minerals share price went decidedly in the other direction.

The ASX lithium stock only released one price-sensitive announcement in September. After market close on the 20th, the company reported it had scored another increase in the price (up 10% month on month) for lithia content at its latest battery material exchange (BMX) auction.

The Pilbara Minerals share price hit another new all-time high on the news.

What’s supporting ASX lithium shares more broadly?

More broadly, the miner also benefited from continued strong demand and prices for lithium across the globe.

As you’re likely aware, the global EV market is booming. As the Australian Industry, Science & Resources Department’s recent quarterly Resources and Energy Report spelled out, 75% of the world’s lithium production goes into rechargeable batteries. And EV sales are forecast to grow by some 900% over the next 10 years.

With supply still struggling to catch up to demand, the department also sees lithium prices shooting higher next year.

According to the report, lithium hydroxide prices are expected “to lift from US$17,370 a tonne in 2021 to US$38,575 a tonne in 2022 and US$51,510 in 2023, and moderate to US$37,650 by 2024”.

A 34% forecast increase in lithium prices next year compared to this year would certainly offer some healthy tailwinds for the Pilbara Minerals share price, now up 173% over the past 12 months.

The post How did the Pilbara Minerals share price surge 25% during the ‘worst month of the year’? appeared first on The Motley Fool Australia.

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More reading

• These were the best-performing ASX 200 shares in the first quarter of FY23
• Here are the top 10 ASX 200 shares today
• Government tips Aussie lithium exports to surge 180%. Which ASX shares are in on the action?
• Why are ASX 200 lithium stocks having such a stellar run on Tuesday?
• Why is the Pilbara Minerals share price surging 7% on Tuesday?

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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Michael Genovese for Nine’s Late News on Tuesday night to discuss the RBA’s latest rates decision, and why they’re tapering increases.

[youtube https://www.youtube.com/watch?v=jSscJ6kcyX0?feature=oembed&w=500&h=281]

The post RBA increases rates again… but by less than expected. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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More reading

• ‘Significance cannot be understated’: Why this ASX lithium share is surging on Wednesday
• Why Bitcoin and Ethereum are rising today
• Go home, ASX. You’re drunk…
• Link share price jumps 7% on new buyout offer
• If I’d invested $1,000 in Allkem shares at the start of 2022, here’s what I’d have now

Motley Fool contributor Scott Phillips 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 Latin Resources Ltd (ASX: LRS) share price is having a strong day.

At one stage today, the lithium explorer’s shares were up as much as 19% to 12.5 cents.

In late morning trade, the Latin Resources share price has pulled back but remains up 5% to 11 cents.

Why is the Latin Resources share price charging higher?

The catalyst for the rise in the Latin Resources share price today has been the release of results from a drilling program at the Colina Lithium prospect of the Salinas Lithium Project in Brazil.

According to the release, the company has made a discovery of a new lithium mineralised zone, some 500m west of the Colina prospect.

Assay results have confirmed multiple high-grade lithium bearing pegmatites at the prospect. In fact, these results have returned the prospect’s highest-grade intersection to date and confirmed the continuity of grade at depth and along strike.

Significant results

Management appears excited by the news, particularly the results from hole SADD033, which it feels “cannot be understated.”

Latin Resources’ exploration manager, Tony Greenaway, was delighted with the results and appears positive on the future of the Colina prospect. He commented:

The significance of these latest results from hole SADD033 cannot be understated. They confirm that we have a second zone of high-grade lithium bearing pegmatite only 500m to the west of the main Colina resource drilling. This new zone is open in all directions including along strike to the north and south, up-dip to the mapped outcrop which drew us to this area and extending at depth to the east beneath Colina.

Colina West has the potential to add considerable resources to the Company’s maiden JORC Mineral Resource Estimate, which is on track to be delivered in December this year and proves the exceptional prospectivity of the wider project area to the west where the Company has mapped even more outcropping pegmatites that are yet to be drilled.

Now that the drilling needed for the maiden inferred mineral resource estimate for Colina is completed, we can let loose with drilling at Colina West, with the aim of potentially incorporating this second area into the PEA and other studies that the Company has underway.

The post ‘Significance cannot be understated’: Why this ASX lithium share is surging on Wednesday appeared first on The Motley Fool Australia.

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More reading

• 3 ASX mining shares going bananas today
• How are ASX lithium shares faring amid Wednesday’s carnage?
• Are Yamaha and Toyota about to upend the ASX lithium share party?
• Investors are obsessed with ASX lithium shares, but what about this other critical battery metal?
• Vulcan Energy share price is one of the worst ASX lithium performers so far this year. Why?

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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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

Several cryptocurrencies rallied Tuesday morning based on buyers’ hopes that the Federal Reserve, which has been aggressively raising interest rates this year, could ease back a bit from its hawkish monetary policy.

As of 10 a.m. ET, the price of the world’s largest cryptocurrency by market cap, Bitcoin (CRYPTO: BTC), was up by 4.8% over the previous 24 hours, hovering around $20,000. The world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH), was 4.2% higher, and the price of XRP (CRYPTO: XRP) was up 6.8%.

So what

Investors have the Reserve Bank of Australia to thank for sending stocks and cryptos higher Tuesday morning after it raised its benchmark rate by 25 basis points (0.25 percentage points) when most experts had expected a 50-basis-point hike. Philip Lowe, governor of the Reserve Bank of Australia, attributed the smaller move to the fact that policymakers have already hiked rates “substantially in a short period of time.”

Furthermore, Lowe and his colleagues are starting to get concerned about the economic outlook and how these rate hikes will affect consumers once their full impact is realized.

“One source of uncertainty is the outlook for the global economy, which has deteriorated recently. Another is how household spending in Australia responds to the tighter financial conditions,” Lowe said in a statement. “Higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments.”

Fast-rising interest rates have been a massive headwind for crypto and most other risky assets, and have prompted huge declines in their valuations. The U.S. Dollar Index, which tracks the U.S. dollar against other currencies, has also fallen in recent days. That’s another positive for crypto because Bitcoin tends to have an inverse relationship with the dollar.

Despite the news out of Australia, the Federal Reserve is still expected to implement two more big rate hikes before the year ends, although it is possible that plan will change as new data on inflation comes in.

In other news, XRP, the cryptocurrency developed by the founders of Ripple Labs, continues to make gains as it barrels toward what looks to be a favorable outcome in a nearly two-year legal battle that could soon be coming to a conclusion.

The Securities and Exchange Commission (SEC) sued Ripple Labs in 2020 for not registering XRP as a security when it raised funds in 2013, and for not providing enough transparency to investors. But it seems like the SEC is starting to back off. Last month, both Ripple and the SEC submitted filings asking the U.S. District Court for the Southern District of New York to make a summary judgment on the case.

Recently, Judge Analisa Torres ruled that the SEC needs to release documents from a former director, who may have previously written in a speech that he does not believe Ethereum is a security — a piece of evidence that Ripple believes is vital to its case.

Furthermore, SEC Chairman Gary Gensler said at a recent conference that he thinks Bitcoin and Ethereum should be regulated by the Commodities Futures Trading Commission, which crypto advocates would prefer to them being regulated by the SEC.

Now what

While I am not convinced that the Reserve Bank of Australia’s smaller-than-expected rate hike means the U.S. Federal Reserve will ease up in its war on inflation, I’m hopeful that we’ll see a more positive inflation report on Oct. 13, which could help the narrative.

Still, I’ve been impressed with Bitcoin’s ability to hang around the $20,000 level, and I ultimately think Bitcoin and Ethereum will prove to be good long-term buys. I also think XRP is headed toward victory in its nearly two-year-long legal battle, which bodes well for that token. 

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

The post Why Bitcoin and Ethereum are rising today appeared first on The Motley Fool Australia.

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More reading

• Why did the Bitcoin price outperform the NASDAQ in September?
• Is now the time to buy Ethereum after The Merge?
• One of the smartest investors says buy the dip on Bitcoin
• Why buying Bitcoin might be the best investment right now: broker
• Here’s what one billionaire thinks about crypto right now

Bram Berkowitz has positions in Bitcoin, Ethereum, and XRP. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.  

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

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Go home, ASX. You’re drunk.

Frankly, I could have written that at many points in the last 6, 12 or even 18 months as shares ducked and weaved – lower – and been correct.

But I’m a shares guy. And people assume if I’m taking exception to share price falls, I’m just talking my book, or cheering for my side, or whatever.

I hope most of my readers know I’m a straight-shooter, but if you’re new around here, I wouldn’t blame you for thinking I could be as conflicted as the next guy or girl.

So… I waited until a day like yesterday (and, probably today) to say it: Go home, ASX. You’re drunk.

Not literally, of course (though maybe there should be random breath testing on trading floors after lunch!)

But metaphorically.

A jump of 3.7%, like we saw on the ASX yesterday, is… not rational. 

(This chart was done before the market closed… and it went higher after that!)

Sure, some of you are thinking ‘don’t question it, Phillips. Just take the money!’, and I can’t blame you.

But if we cast an uncritical eye on the gains, we can get ourselves in all sorts of trouble.

We can become the sort of people who take credit for the good times, but blame others for the bad.

We can become people who think the only good outcomes are the ones we agree with, and everything else is a conspiracy.

You get the idea.

So while I’m always happy to see my portfolio grow in size (and doubly after the last 12 months or so of falling share prices, especially for growth companies), I want to keep balanced – and to help you do the same.

So, let’s put a 3.7% gain in perspective.

Over the last 30 years, the ASX has gained an average of 9.0% per year.

In other words, in a single day, the ASX jumped by 41% of an average year’s return.

(And when you consider that dividends are a large chunk of that 9% return, yesterday’s jump probably represents well more than half of an average year’s capital gain!)

Does it seem logical to you that such a one-day gain would make sense, in the cold light of day?

Me either.

And yes, falls of a similar magnitude are usually overdone, too!

Days like these have only one rationale: emotion.

Sometimes irrational exuberance.

Other times, irrational fear.

But irrational, in either case.

Because remember, a share price is – should be – the sum total of all future per-share cash flows, earned by a company, totalled up (and then discounted because $1 today is worth more than $1 in 20 years time, thanks to inflation and other things).

So, when JB Hi-Fi Limited (ASX: JBH)’s shares jumped 6% yesterday, that implies that the total future cash flows of that business are going to be 6% higher.

Not tomorrow. Not next week, next month or next year.

Forever.

Now, forever is a long time.

So let’s wind it back a little.

Last year, JB earned $5.50 per share in cash flow, according to CommSec.

Let’s say it grows at a modest 5% per year, from here, over the next 10 years.

I’ll save you the maths and just tell you that (without discounting it back) that’s $96 over the next decade.

Does anyone really think that between 10am and 4pm yesterday, that jumped to $102?

That somehow, something happened yesterday that’ll send 6% more people into one of their stores?

Yes, yes, the RBA raised by less than expected.

But the market was already up 2% by then.

And do you really reckon that anyone who placed a trade for JB Hi-Fi’s shares yesterday can accurately predict what’s going to happen to interest rates over the next 9 years and 11 months?

Me either.

So, yeah. A 3.7% move in a single day is almost always silly.

And it tells you more about the emotion of the market, than with the fundamentals of a business.

By all means, enjoy the good days. And bear with the bad days.

But don’t fall into the trap of letting them tell you anything about the quality or valuation of those businesses!

Fool on!

The post Go home, ASX. You’re drunk… appeared first on The Motley Fool Australia.

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More reading

• Link share price jumps 7% on new buyout offer
• If I’d invested $1,000 in Allkem shares at the start of 2022, here’s what I’d have now
• Have falling ASX 200 share prices spooked the RBA?
• Why Amazon stock popped Tuesday
• Why the Life360 share price is up 17% in two days and could keep rising

Motley Fool contributor Scott Phillips 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 JB Hi-Fi 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 Link Administration Holdings Ltd (ASX: LNK) share price is racing higher on Wednesday.

In morning trade, the administration services company’s shares are up 7% to $3.12.

Why is the Link share price racing higher?

The Link share price is on the rise today after the company responded to speculation that it has received another proposal from Dye & Durham.

According to the release, on this occasion, Dye & Durham wasn’t targeting the whole business. Instead, it has set its sights on the Corporate Markets business and parts of the BCM business.

The suitor made a confidential non-binding, conditional, and indicative proposal of $1.1 billion in cash and on a cash and debt free basis. This follows a proposal from Dye & Durham last week to acquire Link’s Corporate Markets business for A$950 million.

The release explains that the proposal was subject to due diligence, negotiation of transaction documentation, and regulatory approvals. However, unfortunately for Dye & Durham, Link wasn’t biting with this proposal or the previous one and rejected them both.

Another new offer

This morning, Dye & Durham returned the table yet again with an improved offer, which remains under consideration.

A further confidential non-binding, conditional and indicative proposal has been made to acquire Link’s Corporate Markets business and all of the BCM business for total cash consideration of $1.27 billion on a cash and debt free basis.

The Link board advised that it will consider Dye & Durham’s third proposal, including obtaining advice from its financial, legal and tax advisers, and will provide shareholders with an update during the next week.

Third time lucky for Dye & Durham? Time will tell.

The post Link share price jumps 7% on new buyout offer appeared first on The Motley Fool Australia.

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More reading

• Here’s how ASX tech shares fared in September
• These were the 5 worst-performing ASX All Ords shares in September
• These were the worst performers on the ASX 200 in September
• Why Bubs, Iress, Link, and Polynovo shares are dropping today
• 5 things to watch on the ASX 200 on Thursday

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

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The Allkem Ltd (ASX: AKE) share price has been up, down, and back up again in 2022.

But those who invested in the lithium producer at the start of the year have so far come out on top. Though, they might have experienced a few restless nights during that time.

At its lowest point of 2022, Allkem shares had plunged 23% year to date. Luckily, that dip has since corrected itself. Indeed, the stock surged to a new record high of $16.08 in mid-September.

But are Allkem shares a good investment?

No pain, no gain

Let’s imagine that I had invested $1,000 in Allkem shares on the first trading day of this year. That likely would have seen me walk away with 89 shares, having paid $11.20 apiece.

So far, my pretend investment has been a good one. Those 89 shares would have been worth approximately $1,290 at Tuesday’s close.

That’s a better result than if that same $1,000 had tracked the S&P/ASX 200 Index (ASX: XJO). The index has dumped 10.5% so far this year, meaning my initial investment would be worth just $895 today.

However, at the Allkem share price’s February trough, my 89 shares would have been valued at around $770 – a notably disappointing short-term investment.

It’s also worth noting that the company isn’t a dividend payer. Thus, investors haven’t received a portion of its profits to add to their investment’s returns.

So, with my imagined investment having flourished this year, albeit with some notable rough patches, would now be a good time to buy into the stock in reality?

Could Allkem shares offer more upside still?

It hasn’t only been the Allkem share price posting a strong performance in 2022. The company has also been on a roll.

It revealed record earnings in August, bringing in a US$605 million gross profit for financial year 2022. And more great things are expected for the company’s future.

The lithium company plans to triple its production by 2026. On top of that, the Australian government expects lithium prices will surge in the near future amid increasing demand, as my Fool colleague Bernd reports.

Thus, on paper, the future looks remarkably bright for the Allkem share price. And I’m not alone in thinking so.

Allkem is broker Wilsons’ preferred lithium buy. The expert likes the company’s geographic diversity and its position as one of the world’s major producers, The Motley Fool Australia’s James reports.

Meanwhile, Macquarie reportedly has an outperform rating and a $21 price target on the stock, representing a potential 44% upside on its previous close. And Bell Potter is said to be even more bullish, tipping Allkem shares to gain 49% to reach $21.58.

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

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More reading

• Here are the top 10 ASX 200 shares today
• Government tips Aussie lithium exports to surge 180%. Which ASX shares are in on the action?
• Why Allkem, Evolution, Paradigm, and Sayona Mining shares are zooming higher
• Why are ASX 200 lithium stocks having such a stellar run on Tuesday?
• Here are the big ASX lithium share winners and losers on Friday

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 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 S&P/ASX 200 Index (ASX: XJO) is off to another cracking start today, up 1.8% in early trade.

This comes after blasting 3.8% higher yesterday.

If you were following the market moves, you’ll have seen the ASX 200 was already posting one of its best days in years yesterday heading into the afternoon.

Then, at 2:30pm AEDT, the Reserve Bank of Australia (RBA) gave the markets a huge boost. Rather than announcing a 0.50% interest rate hike, as most analysts had forecast, the RBA took a dovish turn and lifted rates by a more modest 0.25%.

In response, the ASX 200 gained another 1.1% by the closing bell.

Which begs the question…

Did September’s ASX 200 plunge spook the RBA?

The last two trading days have offered a welcome reprieve from what investors endured in September, when the ASX 200 dropped 7.3% over the month.

The fall was largely driven by fears that aggressive tightening from the RBA and other leading global central banks would lead Australia and other major economies into a recession.

And recessions, as you’re surely aware, don’t tend to be good news for equity markets.

So, is the RBA trying to engineer a soft landing for the economy and the ASX 200?

Here’s what the experts are saying.

What the experts are saying

Vanguard’s senior economist Alexis Gray points to the delicate trade-off the RBA is trying to balance.

According to Gray (quoted by The Australian Financial Review):

The RBA chose to slow the pace of rate hikes, acknowledging the bank’s desire to return inflation to target while keeping the economy on an even keel. This hints at the inherent trade-off the RBA now faces to tame inflation without knocking the economy into recession.

Meantime, Mutual Limited’s chief investment officer Scott Rundell said, “The cash rate is now back around neutral and given the risks of stalling growth, or worse, the bank seems comfortable with smaller rate hikes going forward.”

And Peter Esho, an economist at Wealthi, added:

What we’ve seen today is the RBA sending a message that it’s raising rates in a sensible way. Inflation is not the only problem. There is also a growing sense that financial stability is important.

If the RBA can indeed instil a sense of financial stability amongst skittish investors, the ASX 200 could shake off all the gloomy talk of an impending bear market.

Of course, by slowing the pace of rate hikes this month, the RBA may be setting the market up for more tightening in 2023.

Kicking the can down the road?

ANZ Head of Australian Economics David Plank believes ASX 200 investors should be prepared for some more interest rate hikes next year.

According to Plank (courtesy of The Australian):

We remain of the view, however, that the cash rate will need to move into clearly restrictive territory of more than 3% to ensure inflation does return to target. The slower pace of rate hikes now points to the tightening cycle extending into 2023.

Rate hikes into 2023 could throw up some fresh headwinds for ASX 200 investors.

But for now, investor sentiment has taken a decidedly bullish turn.

The post Have falling ASX 200 share prices spooked the RBA? appeared first on The Motley Fool Australia.

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More reading

• Why Amazon stock popped Tuesday
• Why the Life360 share price is up 17% in two days and could keep rising
• Here’s why the Block share price is jumping 9% today
• Fortescue share price higher on green hydrogen update
• Guess how much directors have been spending on AGL shares so far this week

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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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 (NASDAQ: AMZN) climbed higher on Tuesday morning, as much as 6.1%. As of market close in the US, the stock was up 4.5%.

The broader markets rallied Tuesday, which no doubt added fuel to its rise, but another catalyst that helped send the e-commerce giant higher was some bullish commentary by an analyst.

So what

Despite the challenges wrought by current macroeconomic conditions, JPMorgan analyst Doug Anmuth noted “increasing interest in select names” across the internet group, as the recent market plunge has resulted in a number of compelling stock buys. One such opportunity is Amazon which remains his “best idea” in the sector. 

Even with the macro backdrop, unfavorable exchange rates, and the overall underperformance of internet-related stocks, the analyst expects Amazon to deliver acceleration of its year-over-year revenue growth, margin expansion, and slower capital spending. These will combine to drive “significant” free cash flow growth into next year.

In an unrelated note, Bank of America analyst Justin Post lowered his price targets on both Meta Platforms and Alphabet, citing increasing pressure from Amazon, as the company becomes a growing force in digital advertising. 

Now what

Both analysts make good points. Investors had largely written off any future growth by Amazon, following the company’s significant e-commerce gains during the pandemic. However, Amazon CFO Brian Olsavsky said during the second-quarter earnings call that the company had lapped this high-growth period, which should lead to easier comps and higher year-over-year growth rates going forward. 

Additionally, Amazon is quickly becoming a powerhouse in digital advertising, as its ad revenue grew roughly 21% year over year during the trailing-12-month period, accelerating even as Alphabet’s ad growth slowed and Meta’s declined. 

Finally, Amazon is selling for a song, at roughly two times next year’s sales, near the company’s cheapest valuation in more than seven years.

Given Amazon’s dominant position in e-commerce and cloud computing, growing prominence in digital advertising, and bargain-basement price tag, Amazon stock is a clear buy.

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

The post Why Amazon stock popped Tuesday appeared first on The Motley Fool Australia.

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• 2 top Warren Buffett stocks to buy right now
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet (A shares), Amazon, and Meta Platforms, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, JPMorgan Chase, and Meta Platforms, Inc. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Meta Platforms, Inc. 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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