The Fortescue Metals Group Limited (ASX: FMG) share price is currently tumbling a substantial 9.18% as the wider ASX share market experiences a major sell-off.

The S&P/ASX 200 Index (ASX: XJO) is down by 4.7% at the time of writing, so Fortescue shares are far from alone in this painful decline.

Looking at some other big names in the resources sector, these are also seeing some significant drops. The BHP Group Ltd (ASX: BHP) share price is currently sliding 5.9% and Rio Tinto Limited (ASX: RIO) shares are losing 5.6%. So, while all three big Aussie miners are well in the red on Tuesday, Fortescue shares are faring the worst by some margin.

What’s going on?

Volatility has increased across global share markets amid concerns over how far central banks may need to go to bring inflation under control.

In the US, the latest monthly reading for inflation for May showed a year-on-year rise of 8.6%. For the month of May alone, the US inflation figure was 1%.

According to reporting by various media, including Bloomberg, plenty of traders now believe the US Federal Reserve will increase the interest rate by 75 basis points this week. Even if the Fed doesn’t go quite that far, an increase of 50 basis points is now being widely predicted.

On top of that, there are market concerns that the strength of inflation and the likely response by central banks is leading to a higher chance of recession.

All of these factors are wreaking havoc on global markets and, in turn, sending the Fortescue share price plummeting.

Bloomberg reported on comments by Quill Intelligence chief strategist Danielle DiMartino Booth:

The idea that there is some Goldilocks outcome in the cards or soft landing is a mockery.

While tightening into a recession is no easy task, the Federal Reserve must indicate a willingness to raise interest rates by more than a half-percentage point at upcoming meetings if inflation continues to surprise to the upside.

Furthermore, falling iron ore prices amid fears over Chinese lockdowns are likely also dragging on Fortescue’s shares today.

Fortescue share price snapshot

Despite Tuesday’s heavy decline, Fortescue shares have managed to eke out a gain of just over 1% so far in 2022. This compares to a fall of around 11% for the ASX 200.

The post Fortescue share price sinks 9% amid painful market sell-off appeared first on The Motley Fool Australia.

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More reading

• Why Block, Evolution, Fortescue, and Magellan shares are sinking today
• Why are ASX 200 mining shares tumbling on Friday?
• Fortescue share price sinks: Broker warns that it could fall a further 34%
• Here’s why the Fortescue share price is 8% higher so far in June
• Is now the time to load up on Fortescue shares?

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

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ASX dividend shares that are expected to pay sizeable dividends could be attractive investment options if they’re good value today.

Who decides if they’re good value? That’s for each ASX investor to work out themselves. Meantime, brokers look at loads of businesses and rate whether they are buys or not.

Share price movements can change the attractiveness of a business in the eyes of experts.

With that in mind, here are two ASX dividend shares that are currently rated buys.

Lynch Group Holdings Ltd (ASX: LGL)

Lynch describes itself as Australia’s leading vertically-integrated wholesaler and grower of flowers and potted plants.

Broker Ord Minnett says it’s a buy with a price target of $3.30. That’s a possible rise of about 50%.

The broker noted a recent update from Lynch, which included commentary regarding elevated costs of energy and logistics.

The company said that in Australia, revenue continues to “trend well” with a growth rate of at least 6% expected in the second half of FY22. It’s actively engaging on pricing and range settings with customers to maximise value and manage the margin.

Costs have increased faster than the business has been able to recover through range and price management, with these adjustments typically lagging costs by between three to six months.

The China business was experiencing “strong” market conditions until the recent COVID-19 lockdowns.

Ord Minnett thinks the Lynch grossed-up dividend yield is going to be 7.9% in FY22 and 10.5% in FY23. The existing dividend policy is to pay out at least 50% of annual underlying net profit after tax (NPAT)

The ASX dividend share is expecting an easing of freight rates to reflect the increased airfreight capacity in the first half of FY23.

Rio Tinto Limited (ASX: RIO)

Rio Tinto is one of the largest mining businesses in the world. Its main earnings generator is iron ore, but there are other commodities that it has exposure to including bauxite, aluminium, copper, lithium, and titanium dioxide slag.

Broker Macquarie rates Rio Tinto shares as a buy with a price target of $135. That’s a possible rise of about 15% for this ASX dividend share.

There are expectations that Rio Tinto will pay a grossed-up dividend yield of 15.8% in FY22 and 10.9% in FY23.

Rio Tinto doesn’t have much control over the prices of the commodities it produces. However, it is in charge of production. In the first quarter of 2022, it saw a 15% quarter-on-quarter reduction in iron ore production. Aluminium and copper production were also down quarter-on-quarter.

Macquarie recognises that the current commodity prices are helping Rio Tinto, while copper could be a good growth avenue for the business with the Oyu Tolgoi project.

The post 2 ASX dividend shares to buy this month: experts appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
• Rio Tinto share price lifts amid ‘important’ renewable energy step
• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto share price gains lag BHP despite green steel deal
• Own Rio Tinto shares? Here’s why the miner is being sued by this Russian aluminium producer

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 Bitcoin (CRYPTO: BTC) price is in freefall, down 16% since this time yesterday.

At the time of writing the world’s top crypto by market cap is trading for US$22,187 (AU$31,737). You need to go back to December 2020 to find the crypto trading any lower.

With the latest falls factored in, the Bitcoin price is now down 53% this year and down 68% from its 10 November all-time highs. That’s seen the total market value of the token slide from more than US$1.3 trillion at the peak to US$426 billion today.

Why is the Bitcoin price tumbling?

The Bitcoin price is coming under pressure on two fronts.

The biggest driver looks to be the higher than expected inflation figures released by the United States on Friday.

The world’s largest economy is seeing inflation climb at the fastest rate in four decades. The May figures came in at 8.6%. That’s up from 8.3% in April, dashing hopes that inflation may have peaked. And stoking fears that the US Federal Reserve will pursue aggressive tightening.

The Fed meets this Wednesday (night time for us), and is widely expected to hike rates by another 0.50%. But after the latest inflation data, more analysts are forecasting an outsized 0.75% rate hike.

That’s seen risk assets, like high growth tech shares, come under a new round of selling pressure. The Nasdaq closed down 4.7% yesterday while the S&P/ASX All Technology Index (ASX: XTX) is down 6.7% in morning trade today. (The ASX was closed yesterday for the Queen’s Birthday holiday.)

Cryptos have been trading in line with risk assets all year and the current selloff is no exception. And it’s not just the Bitcoin price dropping hard. Most all of the top cryptos are well into the red today.

What else is pressuring the crypto markets?

Putting additional pressure on the Bitcoin price was news that global crypto lender Celsius Network paused trading over the weekend.

As Bloomberg reports, speculation has been rife that Celsius might not be able to meet the promises it’s made on high yielding returns for some products, which run up to 17%.

Celsius (CRYPTO: CEL) is currently trading for 27 US cents. That’s down 28% over the past 24 hours and down 60% since Friday.

According to Vijay Ayyar, vice president of corporate development Luno:

The Celsius news added fuel to the fire, adding to the uncertainty in the market. There is a lot of pressure on prices as we go into the week of Fed decision coupled with concerns on the protocols offering high-yield products.

And looking ahead, Steven McClurg, co-founder of Valkyrie Investments cautioned that the Bitcoin price and other cryptos could have further to fall.

“The fundamentals to support stabilisation and recovery just aren’t there. Things can and likely will get worse before they get better,” he said.

The post Why is the Bitcoin price crashing 16% today? appeared first on The Motley Fool Australia.

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• Could cryptos be facing an upcoming wave of institutional selling?
• What crypto winter? It’s always sunny with Solana
• Is Bitcoin still worth buying to diversify your ASX share portfolio?
• How has the ASX-listed Betashares CRYP ETF been performing?
• ‘Wherever there’s smoke there’s probably crypto,’ warns Dogecoin founder

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is on course to record a very disappointing decline. The benchmark index is currently down 4.7% to 6,609.6 points.

Here’s what is happening on the ASX 200 today:

ASX 200 crashes

The ASX 200 index is crashing on Tuesday following a selloff on Wall Street overnight. This has been sparked by fears that rising rates to combat decades-high inflation in the United States could stifle economic growth or even lead to a recession. The selling has been across the board, with not a single sector currently trading higher today.

Tech shares sold off

The tech sector has been a sea of red on Tuesday with the likes of Block Inc (ASX: SQ2) and Zip Co Ltd (ASX: ZIP) among the worst performers in the sector. Both payments companies have seen their shares trade over 19% lower at lunch. This has led to the S&P/ASX All Technology Index sinking over 7% to a new 52-week low today.

Pro Medicus’ contract renewals

The Pro Medicus Limited (ASX: PME) share price is sinking with the market despite the healthcare technology company making a positive announcement. Pro Medicus revealed that its Visage Imaging business has signed two key contract renewals with a combined value of $47 million. Both deals are transaction based with committed minimums and have been negotiated at a higher per transaction cost than their original contracts.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Uniti Group Ltd (ASX: UWL) share price with a 0.5% gain on no news. The worst performer has been the Zip share price with a 20% decline. Loss-making tech shares have been hit particularly hard during today’s selloff.

The post ASX 200 midday update: Block and Zip crash amid market selloff appeared first on The Motley Fool Australia.

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• The CBA share price is down 5%. Should investors jump on this?
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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 positions in and has recommended Block, Inc. and Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. and Pro Medicus 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 Core Lithium Ltd (ASX: CXO) share price has slipped 7% in early trade on Tuesday and now rests at $1.17 apiece.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) has slipped 6% into the red towards its lowest level in over a month.

What’s up with the Core Lithium share price?

Investors have sold Core Lithium shares amid a market-wide selloff on Tuesday where the benchmark had slipped 5% at the open.

Before today’s price action the stock had been lumpy after trading in a set of peaks and troughs for the past 3 months.

The upside case was also made by TMF’s Brendon Lau earlier in June as well, citing several drivers in the investment debate.

However, the Core Lithium share price has managed to stay in the green and secure a 99% gain this year to date, outstripping most other ASX shares.

The ASX lithium basket was hit hard in early June following a note from Goldman Sachs outlining its more downbeat view of the sector.

Since the update, it’s been a wobbly ride for the Core Lithium share price, and shares have again trended south as investors sell off ASX shares en masse today.

With numerous shares hitting 52-week lows – in the double digits – the downward pressure is palpable.

Macquarie had given its vote of approval for ASX lithium shares last week, adding its view on concerns plaguing the lithium debate.

It seems the verdict’s out on what’s next in store for the lithium market in the coming years.

Despite the headwinds, Core Lithium remains up more than 360% for the last 12 months.

The post Core Lithium share price slides 7% amid market-wide rout appeared first on The Motley Fool Australia.

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• Which ASX lithium shares are producing and which are not?
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• Why Macquarie still sees ‘material upside’ for ASX lithium shares
• 3 ASX All Ordinaries shares that had a terrific Tuesday
• Core Lithium share price shakes off oversupply concerns to march 8% higher 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 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 Zip Co Ltd (ASX: ZIP) share price has tanked to fresh six-year lows today. But some company insiders may not be surprised by its dramatic fall from grace.

Zip’s CEO and co-founder Larry Diamond was warned eight months ago that there was trouble ahead for the buy now, pay later (BNPL) sector, according to reporting in the Australian Financial Review.

The warning was issued during a meeting at Morgan Stanley. The investment bank believed the BNPL sector was about to be hit by rising interest rates and surging inflation.

Zip’s share price fall won’t surprise some

The prediction looks prescient in today’s environment. Zip shares tumbled 21.42% this morning to 49.5 cents. That’s the lowest the share price has been since 2016.

Diamond reportedly called Zip’s other co-founder in Sydney, Peter Gray, and told him the grim news. He said, “there are some clouds gathering on the horizon”. He also said they needed to shift their thinking from global expansion to self-preservation.

BNPL shares facing multiple challenges

Once a darling ASX share, Zip and its peers are now facing multiple challenges. Central banks around the world, including the Reserve Bank of Australia, are rapidly lifting interest rates and tightening liquidity.

This global trend created four big headaches for ASX BNPL shares in one fell swoop. Rising interest rates mean higher costs of funding for all companies. But it hits BNPL players harder due to their need to fund their interest-free payment offering in a business than generates slim margins.

The second issue is bad debt. As rates rise and the economy inevitably slows, more consumers are at risk of defaulting on payments.

Squeezed from all sides

Meanwhile, even BNPL users in a healthier financial position will likely be tempted to cut back on spending. We are already seeing consumer sentiment take a hit from higher rates and cost of living pressures.

Finally, higher rates are bad news for ASX growth shares. They tend to suffer most as the risk-free rate rises. As we have seen, this derating is most pronounced among ASX tech shares and BNPL shares.

Zip shares aren’t the only ones on the nose

It isn’t only the Zip share price that’s crashed. The Block Inc CDI (ASX: SQ2) share price, Splitit Ltd (ASX: SPT) share price, and Openpay Group Ltd (ASX: OPY) share price have also been pummelled.

The bad news doesn’t end at higher interest rates, either. Growing competition from much larger and better-resourced companies is threatening to overtake these industry pioneers.

National Australia Bank Ltd (ASX: NAB) is the latest ASX big four bank to start offering a BNPL service. Then we have tech giants like Apple Inc (NASDAQ: AAPL) joining the fray.

Last man standing?

The BNPL industry is likely to endure more volatility.

When Afterpay was acquired by Block Inc (NYSE: SQ) in January, Zip became the largest BNPL share on the ASX.

At the time, Zip shares were trading above $3. Today, Zip shares are down 88% year to date.

The post Own Zip shares? CEO warned co-founder 8 months ago, ‘There are some clouds gathering on the horizon’ after Morgan Stanley meeting appeared first on The Motley Fool Australia.

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• These are the 10 most shorted ASX shares
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Motley Fool contributor Brendon Lau has positions in Block, Inc. and National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Block, Inc., and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Apple. 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 Westgold Resources Ltd (ASX: WGX) share price is defying the broader ASX market today.

This comes after the gold miner announced a positive update to its Bryah and Murchison operations.

At the time of writing, Westgold shares are up 3.0% to $1.20 apiece.

In comparison, the All Ordinaries Index (ASX: XAO) is deep in the red by 4.63% to 6,814.2 points. Fears about rising inflation rates and the possibility of an impending recession in the US are dragging global markets down.

What did Westgold announce to the ASX?

Investors are bidding up the Westgold share price amid a sea of red following the release of the company’s gold production numbers.

In today’s statement, Westgold reported that its Bryah and Murchison assets achieved a record month of gold production.

In total, the company achieved an output of 25,100 ounces of gold for the month of May. This represents a 4.7% increase on the 23,969 ounces of gold registered in April.

Furthermore, the Big Bell mine production reached a steady state of production last quarter. In the last two months, production soared by over 95,000 tonnes per month which supported the overall output result.

With a few weeks remaining to finish out the current financial year, Westgold noted that it’s on track to meet its full-year production and cost guidance.

As such, the company is forecasting gold production to come in at 270,000 ounces for FY22. This reflects an improvement on the 245,400 ounces of gold attained in FY21.

All-in sustaining costs (AISC) which include operating costs and sustaining capital expenditure are predicted to be between $1,500 and $1,700 per ounce.

Touching on the result, Westgold managing director Wayne Bramwell said:

The Westgold team has again risen to the challenge and delivered exceptional results from across our operations in May.

Pleasingly Big Bell continues to lift, delivering +95,000 tonnes per month for two consecutive months. With stronger outputs from our Bryah and Murchison mines the company remains on track with full year production and cost guidance.

Westgold share price summary

Despite today’s positive trading update, the Westgold share price has fallen by around 40% in 2022.

When looking further back over the last 12 months, the company’s shares are down by more than 45%.

Westgold shares are currently sitting just above their 52-week low of $1.128 which occurred last Friday.

Based on today’s price, Westgold presides a market capitalisation of roughly $552 million

The post Amid the carnage, guess which ASX All Ordinaries mining share is surging higher appeared first on The Motley Fool Australia.

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• Coinbase Plunges on Crypto and Celsius Fears, but This Is the Real Threat
• The CBA share price is down 5%. Should investors jump on this?
• Zip share price crashes 21% to new multi-year low

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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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.

Shares of Coinbase Global (NASDAQ: COIN) fell sharply on Monday, opening down 21% from their Friday close and trading lower by 14% as of 10:15 a.m. ET. The weekend was a rough one for the cryptocurrency markets, and as the premier exchange for digital asset trading, Coinbase often serves as a barometer of sentiment among investors who trade Bitcoin (CRYPTO: BTC) and other cryptocurrencies.

Indeed, a big drop in cryptocurrency prices was partially to blame for downbeat sentiment among investors, but it wasn’t the whole story. News that some smaller exchanges were taking steps to halt withdrawals raised new fears among crypto investors. Although the chances of a similar step at Coinbase aren’t nearly as high, there is one aspect of what’s happening in the digital asset world today that could have ramifications for the company’s future prospects.

Two key events over the weekend

The first thing hurting Coinbase shares was simply an abrupt move downward in the crypto markets. Bitcoin prices fell from $30,000 as recently as Friday afternoon to $23,500 Monday morning. Prices of Ether (CRYPTO: ETH) took an even harder hit, going from $1,750 to just over $1,200. Many smaller crypto tokens saw similar declines.

Crypto markets have seen steep drops before, but this one brought with it some signs of the stress that companies working in the digital assets space are under right now. The Celsius Network, which is a decentralized finance (DeFi) platform and one of the largest crypto-based lenders, said that it would pause withdrawals from and transfers between accounts. It cited the abrupt shift in market conditions as cause for its action, expressing its intent to honor withdrawal obligations over time.

That was troubling because of the publicity that Celsius had generated in the past. The DeFi platform offered attractive interest rates for crypto deposits, lending them out to generate revenue. Yet skeptics had pointed to loans Celsius had taken with various cryptocurrencies as collateral, suggesting that in extreme market environments, margin calls could cause a cascade effect that would threaten Celsius’ survival and have a ripple effect across the industry.

Later, the much larger crypto exchange Binance announced a more limited move, halting withdrawals of Bitcoin specifically using the Bitcoin network. Unlike Celsius, Binance’s move seemed to be related to a transactional issue rather than due to market conditions.

What Coinbase investors should worry about

Coinbase is a large enough company that it’s far less likely than Celsius to resort to halting withdrawals of assets from its exchange. The reputational hit that would result from such a move would be devastating for Coinbase, and the company knows better than to add fuel to the fire in an environment that’s already averse to crypto-related businesses.

However, Coinbase can’t control negative sentiment in the broader investing community toward crypto, and its long-term business model relies on greater mainstream acceptance of digital assets to foster growth. If investors lose confidence in crypto as a result of the sharp price movements we’ve seen lately, then Coinbase won’t necessarily be able to stem the tide of pessimistic sentiment on its own.

The threat comes at a difficult time for Coinbase in particular, as it’s also going through some controversy with its employee base. After the crypto exchange platform provider rescinded some previously granted job offers and announced a hiring freeze, workers launched a campaign to remove some top executives, citing business failures and poor strategic planning. Coinbase CEO Brian Armstrong suggested in a tweeted response, “Quit and find a company to work at that you believe in.”

Watch Coinbase’s fundamentals

Coinbase will report second-quarter financial results in August, and by then, the impact of what’s happened in the crypto markets on the exchange’s revenue and profits should be clearer. Yet signs of discord within the company are warning signs that point to a potential failure in leadership and corporate culture. Without the support of rank-and-file employees, Armstrong will have a tough time moving forward in the toughest market environment for crypto in years.

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

The post Coinbase Plunges on Crypto and Celsius Fears, but This Is the Real Threat appeared first on The Motley Fool Australia.

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• The CBA share price is down 5%. Should investors jump on this?
• Zip share price crashes 21% to new multi-year low

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Coinbase Global, Inc., and Ethereum. 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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The Commonwealth Bank of Australia (ASX: CBA) share price has dropped quite a bit since the Reserve Bank of Australia’s (RBA) move to increase the Australian interest rate by 50 basis points, or 0.50% in other words. CBA is down around 15% over the last week.

It was a big move by the RBA. It had been two decades since the last time there was an increase that big.

There’s volatility for the ASX share market today and CBA is getting caught up in that. At the time of writing, CBA is down around 5% and so is the S&P/ASX 200 Index (ASX: XJO)

Experts have been looking at CBA shares and considering whether the biggest ASX bank is an opportunity or not. A lower price doesn’t automatically mean that a business is a good idea.

Is the biggest bank in Australia now an opportunity? Or could it drop further?

Broker ratings on the CBA share price

There is a lot of negativity about CBA shares at the moment.

For example, Citi had rated it as a sell. Morgan Stanley and Macquarie had similar ratings of ‘underweight’ and ‘underperform’. The Morgans rating is ‘reduce’.

With the CBA share price down 5% in early trading, it has now reached the pessimistic price targets of most of the brokers I mentioned, which was around $90. Prior to today, those $90 price targets were suggesting decliens.

Morgans thinks that there could be a further decline to come with a price target of $77. That would be a decline of around 15% over the next year.

The experts recognise that the increase in the interest rate can help the net interest margins (NIMs) of CBA.

However, there is a view from some of these experts that there’s danger – higher interest rates could lead to higher bad debts and reduce the attractiveness of the dividend yields of banks.

Banks have been talking about how net interest margins have been under pressure for some time because of competition, low-margin fixed interest products and so on. Time will tell whether a higher NIM can offset some of the worries that brokers are pointing to.

What’s the valuation now?

A cheaper valuation can make an investment more attractive, so it’ll be interesting to see if any brokers change their ratings now that CBA has materially dropped.

Using Morgans’ estimates, the CBA share price is now valued at 17x FY22’s estimated earnings and slightly under 17x FY23’s estimated earnings.

But, Morgans is expecting a growing dividend from the big bank. The estimated grossed-up dividend yield is 5.7% in FY22 and 6.25% in FY23.

While the profit estimates from the other brokers are somewhat similar, Citi is expecting a much bigger dividend. The FY22 grossed-up dividend yield is projected to be 6.2% and the FY23 yield could be 7.4%.

CBA share price snapshot

While CBA shares have dropped 15% over the past week, it only registers an 8.5% drop in the last six months. It’s also back to where it was just before the COVID-19 crash in 2020.

The post The CBA share price is down 5%. Should investors jump on this? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 slumps 5% following Wall Street sell-off
• 5 things to watch on the ASX 200 on Tuesday
• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• Here’s the CBA dividend forecast through to 2024
• These were the worst performing ASX 200 shares last week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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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Things just go from bad to worse for the Zip Co Ltd (ASX: ZIP) share price.

On Tuesday morning, the buy now pay later provider’s shares dropped 21% to a new multi-year low of 49.5 cents.

This latest decline means the Zip share price has now lost almost 90% of its value in 2022.

Why is the Zip share price sinking again?

The weakness in the Zip share price has been driven by a broad market selloff which has been felt hardest in the tech sector.

For example, the S&P ASX All Technology index is down 7% at the time of writing. This compares to a 5% decline from the ASX 200 index.

This has been sparked by concerns that central banks could increase interest rates quicker than expected and stifle economic growth.

It isn’t just Zip that is sinking. Block Inc (ASX: SQ2) shares are down 17% and Sezzle Ltd (ASX: SZL) shares are down 13%.

Based on the current Zip share price and its ~688 million shares outstanding, the buy now pay later provider now has a market capitalisation of just over $340 million.

It’s been a very long time since the company’s valuation was as low as that and a far cry from its $4 billion+ market cap around a year ago.

The post Zip share price crashes 21% to new multi-year low appeared first on The Motley Fool Australia.

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More reading

• Wall Street tumbles into bear market. What does that mean for ASX 200 shares?
• Waiting to start investing in ASX shares? Today could be a brilliant time to do it
• These were the worst performing ASX 200 shares last week
• ASX 200 has its worst week in two years
• Zip share price hits multi-year low as Assistant Treasurer flags BNPL regulation

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 Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, 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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