The BrainChip Holdings Ltd (ASX: BRN) share price has managed to avoid the selloff and is trading flat at 37 cents in late trade following the release of its third quarter update.

What happened in the third quarter?

During the three months ended 30 September, BrainChip reported cash receipts from customers of just US$10,000. This brings its financial year to date cash receipts to US$22,000.

The company posted a cash outflow from operating activities of US$2.2 million. However, thanks to US$8.45 million from the exercise of options, it ended the period with a cash balance of US$12.2 million.

And as of 26 October, its cash balance had increased to US$20.3 million thanks to proceeds from its put option agreement with LDA Capital, as well as the exercise of employee and investor stock options.

What developments have happened during the quarter?

BrainChip had a busy quarter and entered into several agreements for its Early Access Program (EAP).

This includes with The Ford Motor Company, Valeo, Vorago Technologies, and the National Aeronautics and Space Administration (NASA).

Management notes that the EAP provides engineering samples, evaluation boards, and dedicated support to manufacturers that will evaluate its Akida neuromorphic processor. Fees to participate in the EAP are intended to cover the company’s expenses related to participants individual requirements.

What is the Akida neuromorphic processor?

BrainChip is working on a neuromorphic processor that brings artificial intelligence to the edge.

Management believes its chip is high performance, small, ultra-low power, and enables a wide array of edge capabilities. These include on-chip training, learning and inference.

It explained that the event-based neural network processor is inspired by the spiking nature of the human brain and is implemented in an industry standard digital process.

By mimicking brain processing, BrainChip believes it has pioneered a processing architecture, called Akida, which is both scalable and flexible to address the requirements in edge devices.

Akida has been designed to provide a complete ultra-low power and fast AI Edge Network for vision, audio, olfactory and smart transducer applications. It notes that the reduction in system latency provides faster response and a more power efficient system that it believes can reduce the large carbon footprint of data centres.

More reading

• Douugh and Ioupay were among the most traded shares on the ASX last week
• Brainchip (ASX:BRN) share price jumps on quarterly update
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• 3 unique ASX shares I’d buy and hold forever
• A2 Milk and Mesoblast were among the most traded shares on the ASX last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Fluence Corporation Ltd (ASX: FLC) share price is up 10% in late afternoon trading. That puts the company in the enviable position of being among the biggest gains posted on the All Ordinaries Index (ASX: XAO) today, with the All Ords down 1.8%.

The share price surge comes following today’s update on the company’s Ivory Coast water treatment project. And it will come as welcome news to shareholders who’ve watched the share price slide for much of the year.

With today’s gains, the Fluence share price is down 50% year-to-date. That compares to a 10% loss for the All Ords.

What does Fluence do?

Fluence is involved in the decentralised water, wastewater and reuse treatment markets. Its smart products solutions include Aspira, NIROBO and SUBRE. The company’s range of services range from early stage evaluation to design and delivery through to ongoing support and optimisation of water related assets. Fluence operates in 70 countries, with established operations in North America, South America, the Middle East, Europe and China. It aims to help businesses and communities make the most of their water resources.

Why did the Fluence share price leap higher?

Fluence announced that the Israel Discount Bank had confirmed the final conditions precedent for the 165 million euro (AU$275 million) Ivory Coast water treatment plant. The Ivory Coast finance facility will now begin funding contractual payments to Fluence for the plant.

Fluence plans to start construction immediately. The surface water treatment plant will be capable of treating 150,000 cubic metres of water daily. It will treat contaminated water from Lagune Aghein, the biggest freshwater reserve in Ivory Coast, helping to supply fresh water to Abidjan, the nation’s most populous city.

Commenting on the news, Fluence CEO Henry Charrabe said:

Despite challenging logistics and COVID-19 related delays, we are very pleased to have been able to meet this key milestone to progress the Ivory Coast Project and to officially commence construction. This is an immensely important project for the people of Ivory Coast, and we look forward to now fully mobilising.

More reading

• Why the CV Check (ASX:CV1) share price is edging lower today
• Why the Champion Iron (ASX:CIA) share price is up 6% today
• Why the Evans Dixon (ASX:ED1) share price is up 7% as the All Ords slides
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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With the United States election just a few days away, equities experts are dusting off their crystal balls to work out how Australian investors might take advantage.

A couple of weeks ago, T. Rowe Price Group Inc (NASDAQ: TROW) Australian equities head, Randal Jenneke, presented 3 potential outcomes — and his thoughts on the best shares to hold for each scenario.

Now Betashares Director, Adam O’Connor, has done a similar exercise, coming up with his own 3 possible scenarios and what Aussie investors might do in each.

Scenario 1: blue wave

This is the outcome the polls are suggesting at the moment — Democrat wins in both the White House and Congress.

This would give the centre-left party a clear mandate to reform.

“It’s expected this would include large-scale fiscal spending – with a major focus on clean energy and infrastructure, health care reform, and the possibility of a return to higher corporate taxes and increased corporate regulation,” said O’Connor.

“Though it has been suggested that, with a focus on stimulating the economy and getting Americans back to work post-COVID, any corporate tax reform could be delayed.”

This naturally would make shares related to the clean energy industry or those that are environmentally focused very attractive.

“Biden’s policy agenda… could also accelerate the structural shift towards sustainability and have flow-on effects for Wall Street, with an increased focus on ESG factors,” O’Connor said.

“There could also be tighter regulation on oil and gas exploration and production, particularly for US shale.”

Conversely, the technology industry could suffer from some headwinds.

“There are well-documented concerns from the Democrats around the monopoly power of the tech giants such as Apple, Facebook, Amazon, and Alphabet,” said O’Connor.

“A Biden administration could potentially subject the large digital platforms to greater regulation and take a harder line on antitrust enforcement.”

Scenario 2: shared power

If Biden takes the presidency and the Republicans hold onto the Senate, the Democrats reform agenda would be severely hampered.

“Any change in climate policy would also likely need to be via regulation rather than legislation, while major healthcare reform and tax changes would be difficult to achieve,” O’Connor said.

“On the other hand, policies with bipartisan support such as infrastructure spending would likely be easily implemented.”

In this case, US healthcare stocks could do well.

“The healthcare sector in the U.S. has been trading close to its largest discount to the broader S&P 500 in nearly 30 years as markets have been pricing in an increasing likelihood of a Democratic sweep,” said O’Connor.

“However, under a divided congress any proposed drug price controls are inevitably going to be more difficult to negotiate and are more likely to remain on hold while the government relies on drug manufacturers for a COVID vaccine.”

According to Betashares, in the past 70 years share markets have averaged better returns when the White House and Congress were held by different parties.

“Overall, a divided congress would lead to less policy uncertainty, and combined with a more stable foreign policy and an easing of trade tensions, would potentially be supportive of broad equity valuations.”

Scenario 3: Trump is re-elected

If the status quo remains and the Republicans hold onto both the White House and the Senate, the tech-led bull market has a chance of continuing.

“Trump has always seen the strength of the stock market as a barometer for the success of his administration,” O’Connor said.

“So he appears unlikely to do much to undermine the strength of America’s dominant technology sector.”

The corporate tax cuts he enacted during this first term would survive and the market will not need to price in any climate change-related reforms.

“More than likely Trump will continue to provide support for America’s energy industry.”

Long-term impacts no matter who wins

O’Connor also noted that there are market forces that will prevail regardless of who wins the White House and the Senate.

Recovery out of the COVID-19 recession is a major factor, as is the arrival of a coronavirus vaccine and Federal Reserve policy shifts.

“Structural trends like digitisation and automation could also continue to dictate market leadership, irrespective of who is in the White House,” he said.

More reading

• Here’s what this broker thought of the Afterpay (ASX:APT) Q1 update
• The Clinuvel (ASX:CUV) share price edges down on Q1 update
• Is inflation back in black? Here’s what it means for ASX shares
• Newcrest (ASX:NCM) share price tumbles lower following Q1 update
• The Metalstech (ASX:MTC) share price is flying today. Here’s why.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, 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 its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Alphabet (A shares) and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Facebook and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Afterpay Ltd (ASX: APT) share price has been caught up in the market selloff and is tumbling lower today.

In afternoon trade the payments company’s shares are down 3.5% to $99.33.

Is this a buying opportunity?

While I think this pullback could be a buying opportunity when the dust settles on this latest market volatility, one leading broker believes investors should wait for an even better entry point.

According to a note out of Goldman Sachs, this morning the broker held firm with its neutral rating and lifted its price target to $94.40 following its first quarter update.

Goldman was pleased that Afterpay’s operating momentum appears robust. However, it notes that its customer additions in the United States fell short of its expectations. The broker had forecast US customer numbers of 6.7 million, compared to the 6.5 million that it reported.

It commented: “APT operating momentum appears robust although customer additions in the US of 6.5mn were below GSe 6.7mn. We note, however, the December quarter in the US is seasonally a very strong one and customer addition run-rates were indicated to be accelerating into October.”

Two things the broker was particularly pleased with were the growing frequency of use in the ANZ market and its net transaction profit margin. These were both ahead of its expectations.

What else did Goldman Sachs say?

Goldman Sachs expects Afterpay to continue to execute strongly, however it does have concerns over the impact of increasing competition.

The broker commented: “While APT continues to execute strongly and we anticipate it will have a strong December 2020 quarter, at this stage we remain Neutral rated reflecting the fact we expect competition to intensify particularly in the US market.”

Goldman notes that plenty of institutional funds have been flooding into the industry. 

“A number of APT’s US competitors have recently completed equity raisings. Klarna announced a US$650mn equity funding round in September 2020 and Affirm raised US$500mn in September 2020 in a series G funding round ahead of its launch of a fortnightly instalment product with Shopify. We also note that Paypal has launched its ‘pay in 4’ product for the upcoming holiday season,” it explained.

In light of this, the broker will be holding firm with its neutral rating for the time being.

More reading

• Today was mixed for the ASX 200, ending 0.1% higher
• Why Afterpay, Blackmores, Coles, & Super Retail shares are charging higher
• ASX 200 flat: Afterpay impresses, Coles beats expectations, & HUB24 in a trading halt
• Why Resmed, Coles, Afterpay and one other have made early share price gains
• How ASX shares like Afterpay (ASX:APT) push for explosive growth

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Clinuvel Pharmaceuticals Limited (ASX: CUV) share price has edged lower today following the release of its Q1 results.

At the time of writing, shares in the global biopharma are treading lower at 1.9% to $21.44. It’s no surprise that the S&P/ASX 200 Index (ASX: XJO) is also in negative territory today, falling 1.7% to 5,952 points.

The ASX market sell-off comes as Wall Street experienced its worst day in months, extending its losing streak to four consecutive days.

So, despite the current turmoil in world markets, how did Clinuvel perform for the start of the new financial year?

Performance review

For the period ending 30 September, Clinuvel continued to progress the commercial distribution of its flagship drug, Scenesse. Despite the difficult operating environment, the company further pushed into the United States and Europe.

Cash receipts for the September quarter totalled $12 million, an increase of 22.8% on the prior corresponding period (pcp). This was underpinned by a surge in treatment demand that normally occurs over the summer period. AThis is because exposure to visible and ultraviolet light poses a greater risk to patients with erythropoietic protoporphyria (EPP).

After expenditure on operating activities, Clinuvel recorded a net cash flow of $7.8 million, reflecting controlled growth during COVID-19. First receipts from the commercial distribution of Scenesse in the US were received. In addition, European orders were placed and will be paid later in the calendar year. The majority of cash outflows was from the completion Clinuvel’s new Singaporean research, development & innovation centre.

The company closed the quarter with $72.7 million in cash and equivalents, a 9% increase on the prior period.

Commercial operations

During the pandemic, Clinuvel further expanded its commercial operations in the US and Europe. Research and development activities focused on novel treatments for patients with severe genetic, skin and vascular disorders.

As the majority of expert centres in Europe have prescribed Scenesse, a small number of clinics have either deferred or reduced orders. This was attributed to uncertainty in patient demand around the pandemic.

In the US, company planning has jumped ahead of schedule with 26 speciality centres trained to administer Scenesse. This almost completes the original target to have 30 clinics running by July 2021.

Management commentary

Commenting on the results, Clinuvel CFO Darren Keamy said:

The continued demand for Scenesse from EPP patients in Europe and the USA bolstered the group’s cash receipts in the September quarter.

The further rise in our cash reserves after the payment in the quarter of a third annual dividend as the northern hemisphere winter months approach is welcome in the context of the adverse operating environment and the ability it provides to self-finance the growth of commercial operations and the expansion of our research and development activities.

More reading

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• Why market crashes are useful for buying ASX dividend shares
• The Seek Ltd (ASX:SEK) share price under attack by offshore shorter
• ASX 200 down 1.1%: ANZ cash earnings down 42%, SEEK slammed, HUB24 jumps
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Inflation is not a problem we hear too much about in 2020 – apart from a lack of it. In fact, most of the discussions surrounding inflation have instead been about deflation, or negative inflation.

Inflation, if you didn’t know, refers to the (usually) gradual loss of purchasing power of a currency over time. It’s the reason your grandparents used to talk about a loaf of bread costing 25 cents, or a brand new car costing $5,000. Most economists accept that a small level of inflation is good for the economy. It encourages people to spend their money sooner rather than later. It also encourages credit (borrowing money) since a loan loses its ‘real’ value over time with inflation.

Inflation used to be an ever-present threat to economic growth that governments and central banks watched like a hawk (and raised interest rates if it got too high). Under conventional economic theory, inflation is usually pushed higher in times of strong economic growth, and falls off the perch in times of sluggish growth or recession. But over the past 10 years or so, economists have stopped talking about inflation and started to talk about the lack of it. This has only been exacerbated as a result of the coronavirus pandemic. Since the pandemic began, the entire world has been plunged into recession. Inflation in Australia actually went negative (i.e. deflation) for the first time since 1998 in 2020.

Inflation is back in black

But according to reporting in the Australian Financial Review (AFR) this week, inflation is back in black and let loose from the noose.

According to the AFR, Australia recorded the biggest quarterly rise in inflation since 2006 in the quarter ending 30 September, increasing 1.6%. That pushes the annual headline inflation rate to 0.7%, up from the -0.3% that was running in the previous quarter.

The fall that inflation took in the quarter ending 30 June was apparently the biggest quarterly fall since the Australian Bureau of Statistics began recording inflation way back in 1948.

What do higher prices mean for ASX shares?

Whilst this news looks good for the economy, there are a couple of caveats to mention. Firstly, as the AFR notes, childcare costs were a significant component of the positive quarterly inflation number at 0.9%. Childcare was temporarily made universally free by the federal government earlier in the year. However, this policy expired on 13 July. Further, the oil price spent the quarter recovering from historic lows (including a short period of negative oil prices). This would have fed into petrol and transportation price rises over the quarter as well.

Even so, all things considered, an inflation rate of 1.6% for the quarter is good news. It indicates that the Australian economy is in recovery mode (even if it is mild at this stage). And that, in turn, is good news for the ASX shares that operate within it.

More reading

• The Clinuvel (ASX:CUV) share price edges down on Q1 update
• Newcrest (ASX:NCM) share price tumbles lower following Q1 update
• The Metalstech (ASX:MTC) share price is flying today. Here’s why.
• 2 ASX 200 shares poised to rocket when the world reopens
• Jumbo (ASX:JIN) share price drops lower following Q1 update

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Newcrest Mining Limited (ASX: NCM) share price has taken a tumble on Thursday.

In afternoon trade the gold miner’s shares are down a sizeable 4.5% to $29.21.

Why is the Newcrest share price dropping lower?

The Newcrest share price has come under pressure today following a pullback in the gold price which has offset the release of a first quarter update that was in line with expectations.

For the three months ended 30 September, Newcrest achieved group gold production of 503,089 ounces and copper production of 34,763 tonnes. While this was down notably quarter on quarter because of major planned maintenance, it still puts the company on track to achieve its full year guidance.

This production was achieved with a group all-in sustaining cost (AISC) of US$980 per ounce, up 11.5% from the prior quarter.

Nevertheless, thanks to a similar increase in its average realised gold price to US$1,837 per ounce, the company delivered an AISC margin of 46% or US$847 per ounce.

What were the drivers of this result?

The Cadia operation delivered gold production of 196,504 ounces and copper production of 25,329 tonnes. This was achieved with a record low AISC of just US$113 per ounce.

Management commented: “Cadia’s AISC of $113 per ounce is its lowest on record, primarily driven by a higher realised copper price and timing of sustaining capital expenditure. These benefits were partially offset by lower gold production, an increase in operating costs associated with the planned shutdowns, the impact on operating costs from the strengthening of the Australian dollar against the US dollar and lower copper sales volumes.”

Over at its Lihir operation, Newcrest recorded gold production of 177,337 ounces at an AISC of US$1,283 per ounce. “Gold production of 177koz was 14% lower than the prior period primarily due to lower throughput, grade and recovery,” management explained.

The company’s Telfer operation reported gold production of 86,452 ounces and copper production of 2,384 tonnes. This was achieved with a notably higher AISC of US$1,797 per ounce. Management advised that this was due to the impact of lower gold production, an increase in site operating costs, and foreign exchange headwinds.

The Red Chris operation reported gold production of 12,636 ounces and copper production of 7,050 tonnes with an AISC of US$2,621 per ounce. This sky high AISC was driven by increased sustaining capital expenditure, higher operating costs, foreign exchange headwinds, and lower copper sales volumes.

Finally, the Fruta del Norte operation contributed gold production of 30,160 ounces for the quarter. Newcrest acquired a 32% equity interest in the operation in April.

Outlook.

Newcrest has held firm with its guidance for FY 2021. It continues to expect gold production of 1,950,000 ounces to 2,150,000 ounces. It has also retained its copper guidance of 135,000 to 155,000 tonnes for the year.

Newcrest Managing Director and Chief Executive Officer, Sandeep Biswas, commented “Consistent with prior years we executed a number of planned shutdown events across our operations in the September quarter, which is reflected in our production and All-In Sustaining Cost per ounce.”

“We expect production to be higher in the December quarter and the Company is on track to meet its FY21 production guidance. Our world-class Cadia asset continues to impress, reporting its lowest ever quarterly All-In Sustaining Cost of $113 per ounce, equating to an AISC margin of $1,724 per ounce for the quarter.”

“This showcases the strength of Newcrest’s unique technical capability as one of the few mining companies globally able to do block cave mining, which underpins Cadia’s performance,” he concluded.

More reading

• 5 things to watch on the ASX 200 on Thursday
• How did ASX gold shares perform in the last quarter? 
• ASX 200 Weekly Wrap: ASX snaps winning streak… just
• 5 things to watch on the ASX 200 on Monday
• Why the Iluka (ASX:ILU) share price nearly halved today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Metalstech Ltd (ASX: MTC) share price is storming higher today as the company released its quarterly report. Shares in the gold miner are up 10% at the time of writing to a price of 16 cents. However, the company has traded as high as 19.5 cents this morning.

The news comes as the company announced high grade gold deposits at the Sturec gold mine.

Quarterly report

Metalstech made some solid steps in the first quarter of the financial year in what has been a transformative period for the company.

Despite the coronavirus pandemic, the company has added considerable value to its Sturec Mine in Slovakia. During the quarter, the company delivered a maiden 1.069 million ounces of solid gold and 8.214 million ounces of silver. In order to continue its positive results, the company also secured an extension to its underground mining licence.

With impressive exploration results, Metalstech took the opportunity to raise capital. The miner successfully raised $3.3 million through institutional investors. The funds raised will be used on underground railway development and to bankroll future exploration.

In terms of the company’s cash flows, there was no income to speak off. As such Metalstech announced a net loss of $367,000 for the quarter. However, with the addition of the capital raise, Metalstech cash position increased to a total of $2.9 million.

Sturec gold discovery

The discovery of high grade deposits at Sturec underlines the company position that exploration is key to its future. It also ratifies the decision to invest in its underground mining licence.

The gold was intersected at 252m, and is estimated to be an extension of the Schramen Vein which was the main vein for historical production.

About the Metalstech share price

The micro-cap miner is a resource exploration company currently focused on its Sturec gold mine in Slovakia. It is also listed on the Paris Stock Exchange and owns a mine in Canada.

The Metalstech share price has been on a strong positive run so far this year. Since the start of the year, its shares have risen from a price of 4 cents to 16 cents today. That’s a 300% increase in just 10 months.

More reading

• Newcrest (ASX:NCM) share price tumbles lower following Q1 update
• 2 ASX 200 shares poised to rocket when the world reopens
• Jumbo (ASX:JIN) share price drops lower following Q1 update
• Xplore Wealth share price surged to a 2-year high today on M&A fever
• Aldoro Resources (ASX:ARN) share price soars 137% on project update

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 world isn’t quite ready to reopen yet. In fact, it’s currently heading in the other direction.

The northern winter hasn’t really got rolling and already the coronavirus is spreading across much of the north at a truly pandemic rate.

While dreadful, a second mass outbreak during the cooler months shouldn’t come as a surprise. After all, this is when people spend more time together in close proximity indoors. And even outdoors, the virus lingers longer on surfaces at winter temperatures.

I’ve been cautioning my family in the United States and in the Netherlands to brace for this second winter wave for months. Not that there’s a whole lot they can do. Other than ensure an ample supply of hand sanitiser, facemasks and, well, toilet paper.

Although this second wave isn’t entirely unexpected, the rate at which it’s spreading has caught Europe’s leaders off guard.

In a televised speech, French President, Emmanuel Macron, stated:

The virus is circulating at a speed that not even the most pessimistic forecasts had anticipated. Like all our neighbours, we are submerged by the sudden acceleration of the virus. We are all in the same position: overrun by a second wave which we know will be harder, more deadly than the first.

In an effort to slow the spread, France and Germany have reintroduced strict lockdown conditions. France’s measures are almost as extreme as the stage 4 lockdowns Victorians endured, except that French schools will remain open.

Understandably, the daily news of mounting infection numbers – and uplifting speeches like Macron’s – have put already jittery share markets even more on edge.

And the latest news on the renewed lockdowns in Germany and France – Europe’s two biggest economies – prodded many investors to hit the sell button.

A sea of red

All the major European and American indexes sold off yesterday (overnight Aussie time).

In the US, the tech-heavy NASDAQ-100 (NASDAQ: NDX) led the way down, losing 3.9%.

In Europe, that undesired honour went to Germany’s DAX PERFORMANCE-INDEX (DB: DAX), which closed the day down 4.2%.

Not surprisingly then, the S&P/ASX 200 Index (ASX: XJO) is losing ground today too, down 1.4% in early afternoon trading. Geographically, we may be a remote, island nation with extremely low COVID numbers. But when it comes to most of the shares on the ASX, what happens in the rest of the world matters.

And nowhere is this more true than in the energy sector.

ASX 200 energy shares pummelled

Already suffering from a global supply glut, the onset of the pandemic absolutely smashed the price of crude oil.

Brent crude, the global benchmark, had been tracking steadily higher since early October 2019. That was largely due to the success of OPEC+ (which includes Russia) in cutting excess output fuelled by record US production.

As recently as 6 January, Brent was trading for US$68.91 (AU$97.75) per barrel. By 21 April, it was down to US$19.33 per barrel. Buoyed by global government stimulus, low interest rates, and optimism that the virus could be held in check, Brent was trading for US$43.16 only last Tuesday 20 October.

At time of writing it’s down to US$39.28.

ASX 200 energy shares, already the target of activist investors, have seen their values pummelled.

Woodside Petroleum Limited (ASX: WPL) is Australia’s largest independent dedicated oil and gas company. Down 1.3% in intraday trading, year to date the Woodside share price is down 49%.

Santos Ltd (ASX: STO), Australia’s second largest oil and gas company, is down 4.0% at time of writing. Year to date, the Santos share price is down 41%.

And US listed energy giant, Exxon Mobil Corporation (NYSE: XOM) has fared even worse. The Exxon share price slipped 3.8% yesterday, putting its shares down 55% year to date.

And most analysts are pointing the finger of blame (or one finger, in either case) directly at COVID.

Andrew Lebow, a senior partner at Commodity Research Group, observed (as quoted by Bloomberg):

This is more of a reaction to concerns over the coronavirus and potential for further restrictions and lockdowns than the crude build. Seemingly things are getting worse by the day.

Oil in the streets

Contrarian investor, Baron Rothschild famously said, “The time to buy is when there’s blood in the streets.” 

In the case of the leading ASX 200 energy shares, and Exxon if you’re comfortable with buying international shares, that time looks nigh. 

Oil, along with the Santos and Woodside share prices, could well slide further if the pandemic lockdowns in Europe persist or even spread.

But once the world does get past this virus, I expect the demand for oil will rebound to pre-pandemic levels. This could see the share prices of companies like Exxon, Santos and Woodside rebound just as strongly.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• Why Afterpay, LiveTiles, PointsBet, & Santos shares are tumbling lower
• 5 things to watch on the ASX 200 on Tuesday
• The Santos (ASX:STO) share price is up 3% on positive sentiment

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Jumbo Interactive Ltd (ASX: JIN) share price is trading lower on Thursday following the release of its first quarter update.

At the time of writing, the online lottery ticket seller’s shares are down 2.5% to $11.12.

How did Jumbo perform in the first quarter?

Despite what its share price decline might indicate, Jumbo has been a relatively positive performer during the first quarter. This was despite the company facing a sizeable decline in large jackpots.

According to the release, Jumbo has recorded a 36% increase in sales from jackpots under $15 million over the last 12 months. This helped to partially offset a reduction in large jackpots to 8 from 13 and a peak jackpot of $80 million compared to $150 million in the prior corresponding period.

This ultimately led to Jumbo reporting consolidated total transaction value (TTV) of $108 million and consolidated revenue of $22.3 million for the quarter. This was down 6% from $115 million and down 2% from $22.8 million, respectively, compared to the prior corresponding period.

Jumbo’s revenue was boosted by an 80 basis points increase in its revenue/TTV margin from 19.8% to 20.6%.

Jumbo’s CEO, Mike Veverka, was pleased with the company’s performance given the challenging trading conditions.

He commented: “In the opening quarter, when large jackpots were down 38% on the pcp and the peak jackpot reached $80m compared to the record $150m jackpot a year ago, I am pleased to announce a significant improvement in Jumbo’s underlying performance, including in our key lotteries business, where like-for-like sales increased by between 26% and 64%.”

“This contributed to a group revenue result which was down just 2% on the pcp and demonstrates our superior ability to continue to deliver engaging and entertaining experiences to our customers,” he added.

Management notes that its performance was driven by stay-at-home restrictions driving customers online, a growing contribution from the Powered By Jumbo SaaS business, and improved data analytics. The latter is enhancing its customer engagement.

Outlook.

No guidance was given for the remainder of the first half or the full year. However, Mr Veverka remains positive on the future.

“I am proud of the commitment and performance of our whole team in this challenging environment. We look to the future with the confidence that we have a resilient business in strong financial shape, allowing us to sustainably grow our customer base as we continue to invest in our existing businesses and capitalise on our options for growth.” the CEO concluded.

More reading

• These ASX growth shares could be great options in October
• 3 ASX shares to watch closely
• Top brokers name 3 ASX shares to buy next week
• Insiders have been buying Jumbo (ASX:JIN) and this ASX share
• These ASX dividend shares could be stars of the future

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Jumbo (ASX:JIN) share price drops lower following Q1 update appeared first on Motley Fool Australia.

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