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On any given trading day, news of at least one ASX small-cap share soaring upwards by more than 20% is likely. In fact, it’s entirely possible to see a small-cap share soar more than 50% in a day.

But are ASX small-cap shares the way to go, or should they be avoided?

Let’s take a look at one expert’s view on the smaller end of the market.

‘You don’t get bargains’: expert

Australia and the wider international markets have been on edge in recent times amid fears of a recession and pending interest rate hikes.

However, in an interview with livewire today, Forager Funds chief investment officer Steve Johnson said, “You don’t get bargains without dysfunctional markets“.

Johnson expressed his view on the market, given US and Australian sentiment in recent times, and noted some concern about small-cap shares. He said:

The smaller you get, the worse the performance has been. On the Russell 2000, an American small companies index, more than 70% of companies have seen their share price go down more than 30% from their peak.

Of those companies with market caps of less than $500 million, that drawdown has been 55%.

These waves of momentum are being driven by a significant percentage of the market that doesn’t care how much profit the business is going to make or how much it’s worth.

Johnson also likened the market to a “casino”. He added:

The rise of retail gambling, the nature of the stock market being more like a casino; I don’t think it’s been more prominent than it has in the past few years.

In today’s news, ASX small-cap share Cardno Limited (ASX: CDD) has soared more than 110% in two days on the back of price-sensitive market news.

Analysts also believe these two small-cap ASX shares, Airtasker Ltd (ASX: ART) and Serko Ltd (ASX: SKO), could have potential.

The post ‘The smaller you get, the worse the performance has been’: Should ASX small-cap shares be avoided right now? appeared first on The Motley Fool Australia.

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More reading

• Guess which little-known ASX share has soared 110% in 2 days
• Experts name 2 exciting small cap ASX shares to buy with huge upside potential
• Why I think these ASX tech shares are buys in August
• Brokers name 3 ASX shares to buy today
• ‘We are benefiting from the inflationary environment’: Airtasker share price rockets 16%

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Serko Ltd. The Motley Fool Australia has recommended Serko 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 Nickel Industries Ltd (ASX: NIC) share price closed lower on Monday amid a significant debt announcement by the mineral exploration company.

Nickel Industries shares finished the day down 1.82% at $1.08 each after hitting an intraday low of $1.052 a share. They opened this morning at $1.10 each.

Let’s check what announcement the company made today.

What happened?

Nickel Industries announced it had raised US$225 million in debt capital for the Oracle Nickel Project acquisition.

The company said it had executed binding agreements for the issuing of USD $225 million worth of senior secured notes. The debt has an interest rate of 10% and will mature in August 2025.

The notes will be issued on the Frankfurt Open Market Exchange.

Part of the proceeds from the notes, along with the company’s cash reserves and future earnings from its existing operations, will be used to satisfy the company’s remaining payment obligations for the project in Indonesia. The agreement was announced in November 2021.

Nickel Industries entered a memorandum of understanding with Shanghai Decent Investment Group Co Ltd to acquire a 70% stake of the Oracle Nickel Project. It’s estimated the project will have a production capacity of 36,000 tonnes of nickel when it’s completed.

When the production of its Angel Nickel and Oracle Nickle production facilities are consolidated, the company expects a nameplate capacity of more than 100,000 tonnes of the base metal.

The Oracle Nickel Project comprises four rotary kiln electric furnaces.

The first rotary line is due to be commissioned in October this year, five months ahead of the scheduled project delivery date, the company said.

Production facilities are situated in Indonesia Morowali Industrial Park, and Halmahera Island, Indonesia. 

Nickel Industries share price snapshot

The Nickel Industries share price slipped 1.37% in a year but has shed almost 25% year to date.

Its 2022 performance is well below that of the benchmark S&P/ ASX 200 Index (ASX: XJO) which has lost 5.7% so far this year.

This coincides with a steady downturn in nickel prices on commodity markets since March this year.

At the company’s current share price, Nickel Industries has a market capitalisation of around $2.9 billion. 

The post Nickel Industries share price slips on $225 million debt capital raise appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Now’s the time to play defense if you have retirement on the horizon
• 4 key traits Warren Buffett uses to pick the best stocks
• Why is the Paradigm Biopharmaceuticals share price up 12% on Monday?

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

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Some key S&P/ASX 200 Index (ASX: XJO) shares have been chosen as opportunities by fund managers.

There has been a whole heap of volatility during the last few months as concerns have grown about inflation and rising interest rates.

Different businesses are being impacted in different ways by these impacts.

But, there are a few names that may actually be able to generate bigger profit in this environment.

The two fund managers – Geoff Wilson from Wilson Asset Management and Dr Philipp Hofflin from Lazard Asset Management – were talking to Livewire Markets and suggested that a recession is likely over the next year and a half.

But, Hofflin pointed out a couple of ASX 200 shares that could be worthwhile to own because they may be able to remain stable:

Coles Group Ltd (ASX: COL)

Coles is one of the largest supermarket businesses in Australia with a market capitalisation of $25 billion according to the ASX.

The supermarket business was one of the picks by Hofflin. He actually picked both supermarket ASX 200 shares, Coles and Woolworths Group Ltd (ASX: WOW), but his preference is Coles.

Why Coles? The given reason was the fact that it has no debt and a “strong” balance sheet, according to the comments reported by Livewire.

Wilson said:

Look at the companies with good balance sheets, low levels of debt and the ones with strong business franchises as these have the potential to prosper, even in difficult times.

Woodside Energy Group Ltd (ASX: WDS)

Energy giant Woodside was another pick by Hofflin.

It was suggested that Woodside could be a good pick if there’s a recession like the mid-70s when inflation was persistent.

Woodside is another ASX 200 share that has a minimal amount of debt after merging with the oil and gas division of BHP Group Ltd (ASX: BHP).

It was also noted that Woodside could be one of the ASX 200 shares to benefit from the energy supply issues.

Energy prices have been elevated since the Russian invasion of Ukraine, which could help revenue, net profit after tax (NPAT) and cash flow.

According to the estimate on CMC Markets, Woodside could pay an annual dividend per share of $3.63 in FY22. That translates into a grossed-up dividend yield of 16.3%. That would be among the largest yields paid in 2022 out of all the ASX 200 shares, aside from a few miners.

The post 2 little-to-no-debt ASX 200 shares to buy in a downturn: fundie appeared first on The Motley Fool Australia.

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More reading

• Why is the Woodside share price having such a strong start to the week?
• Is Coles an underrated ASX 200 dividend share with potential?
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• Sick of high petrol prices? Then buy this ASX share: analyst

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 positions in and has recommended COLESGROUP DEF SET. 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 Redbubble Ltd (ASX: RBL) share price spent a day in the green today following positive news from a prominent broker.

After zipping to an intraday high of $1.335, shares in the e-commerce company closed 16.67% higher at $1.33.

Broker slaps a buy rating on Redbubble shares

Investors were driving up the Redbubble share price higher following an updated broker note.

As reported in the Australian Financial Review, the team at UBS upgraded Redbubble shares to a “buy” rating and lifted the company’s price target by 10% to $1.60 per share.

UBS analysts touched on the attractive opportunity currently presenting Redbubble shares, saying:

Given the extreme level of investor disinterest in the name, combined with a valuation multiple implying further downgrades and a short interest position of over 4%, we think a FY22 result which meets or potentially beats consensus expectations, combined with an improved July sales update will be a positive catalyst for the share price.

UBS added that the company’s sales and margin trends could be better than what the market expects.

The report stated that “channel checks with US print-on-demand peers suggest digital marketing costs have not materially worsened”.

Furthermore, a challenging microenvironment is putting pressure on smaller peers to focus on preserving cash rather than investing in marketing activities.

Nonetheless, UBS believes that Redbubble shares are grossly undervalued at the current price. From where it trades today, this represents an upside of more than 20%.

The company is scheduled to report its full-year results on Wednesday, 17 August.

Redbubble share price snapshot

Despite today’s gains, the Redbubble share price has slumped 60% over the past 12 months.

The company’s shares hit a low of 77.5 cents in June before moving onto an upwards trajectory.

Redbubble commands a market capitalisation of around $366.9 million.

The post Why has the Redbubble share price burst 17% higher on Monday? appeared first on The Motley Fool Australia.

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More reading

• Is it time to buy these 2 beaten-up ASX shares in August?
• Could ASX online retail shares be getting a boost out of inflation?
• 3 ASX 300 retail shares majorly cashing in on Thursday

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended REDBUBBLE FPO. 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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It was a wobbly day on the market for the S&P/ASX 200 Index (ASX: XJO) as energy shares led the way. The index closed 0.07% higher at 7,020.60 points on Monday.

A slight lift among embattled global oil prices likely helped the S&P/ASX 200 Energy Index (ASX: XEJ) record an 1.85% gain today.

The Brent crude oil price lifted 0.8% after the ASX closed on Friday to trade at US$94.92 a barrel – representing a weekly loss of 13.7%. Meanwhile, the US Nymex crude price rose 0.5% to US$89.01 a barrel – a 9.7% week-on-week drop.

S&P/ASX 200 Materials Index (ASX: XMJ) shares also outperformed today, lifting 1.8% after OZ Minerals Limited (ASX: OZL) rejected an $8.3 billion takeover bid presented by BHP Group Ltd (ASX: BHP).

Meanwhile, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) recorded the worst fall, dumping 1.9% today.

Four of the ASX 200’s 11 sectors were trading in the green as of the market’s close.

But which shares started the week out on the best foot? Keep reading to find out.  

Top 10 ASX 200 shares countdown

Perhaps unsurprisingly, today’s best performing ASX 200 share was copper miner and takeover target OZ Minerals. The stock leapt 35% on Monday. Read more on what’s been driving the material stock upwards here.

Today’s biggest gains were made by these ASX shares:

ASX-listed company	Share price	Price change
OZ Minerals Limited (ASX: OZL)	$25.59	35.25%
Lake Resources NL (ASX: LKE)	$1.075	15.59%
Imugene Limited (ASX: IMU)	$0.285	9.62%
Block Inc (ASX: SQ2)	$126.83	7.21%
Liontown Resources Limited (ASX: LTR)	$1.61	6.98%
Beach Energy Ltd (ASX: BPT)	$1.845	6.65%
Sandfire Resources Ltd (ASX: SFR)	$4.85	6.36%
Core Lithium Ltd (ASX: CXO)	$1.36	5.84%
De Grey Mining Limited (ASX: DEG)	$1.015	5.73%
Pointsbet Holdings Ltd (ASX: PBH)	$3.54	5.67%

Our top 10 ASX 200 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

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

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More reading

• Leading brokers name 3 ASX shares to buy today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why is the Lake Resources share price leaping 11% today?
• Why Appen, Imugene, OZ Minerals, and Paradigm shares are charging higher
• Now’s the time to play defense if you have retirement on the horizon

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 Block, Inc. and Pointsbet Holdings Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Pointsbet Holdings 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 CSL Limited (ASX: CSL) share price has climbed 3% in the past month, but could it go higher?

CSL shares fell 0.37% today to $295.64. In comparison, the S&P/ASX 200 Index (ASX: XJO) leapt 0.07% on Monday.

So what is the outlook for the CSL share price?

Could the CSL share price jump higher?

CSL is a global biotech giant working on vaccines and plasma products to treat diseases.

Recently, Wilson Asset Management experts have recommended shareholders buy CSL shares, as my Foolish colleague Tony reported.

Analyst Anna Milne highlighted the company’s Behring business has been “under earning for a number of years” and is “really starting to hit it’s strap”.

Further, Milne pushed the company’s plasma and vaccine advantages and how that would help the company. Commenting on CSL’s Seqirus influenza business, she said:

Seqiris is the vaccine business… it’s been a pretty horrendous flu season Down Under and we think that’ll probably translate to the same in the northern hemisphere.

In addition, Milne commented on the company’s Vifor Pharma acquisition:

The Vifor transaction, which has been delayed, but management is still very confident that it’s going to close and we’re really excited about the pipeline of drugs there.

So CSL’s a buy.

On 2 August, CSL revealed to the market it has received all the regulatory clearance required to finalise the acquisition of Vifor Pharma.

Completion of this acquisition is due tomorrow, on 9 August.

CSL is due to report earnings in FY22 on Wednesday next week.

CSL share price snapshot

The CSL share price has slipped 0.78% in the past year, while it has gained climbed 1.7% year to date. For perspective, the ASX 200 has shed nearly 7% in a year.

CSL has a market capitalisation of more than $142 billion based on the current share price.

The post ‘Excited about the pipeline’: Why Wilson says the CSL share price is in the buy zone right now appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 200 shares to buy for a post-COVID resurgence: experts
• Up 8% in July, is there more upside in the CSL share price this earnings season?
• Why Citi just became even more bullish on the CSL share price
• What’s going on with the CSL share price on Tuesday?
• 5 things to do during ASX results season

Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL 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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This Monday gave investors a very mild day of gains overall on the ASX boards. As of market close, the All Ordinaries Index (ASX: XAO) put on 0.11% today to finish at 7,258.2 points. This comes despite spending the morning mostly in the red. But it was a different story for one ASX tech share.

The MOQ Ltd (ASX: MOQ) share price was on fire today. MOQ shares ended up rising an eye-catching 40% at 7 cents each after closing at 5 cents per share last week.

MOQ is an ASX tech share that works to “develop, build and acquire complementary cloud-focused technology businesses”.

So what might have sent this ASX tech share up by such a large number today?

ASX tech share MOQ in bidding war

Well, it seems that this share price rise has been sparked by a takeover offer. According to an ASX release from this morning, MOQ has received an offer to acquire 100% of its shares for a price of 6.6 cents each.

Originally, MOQ identified the company making the offer only as a “third party”. But it subsequently released an announcement that revealed the suitor as Brennan VDI Pty Ltd.

But this is not the first time MOQ has received interest from a potential buyer. Back in June, the company announced that it had received another takeover offer, this time from Atturra Holdings Pty Ltd. This bid was initially floated at 5 cents per share. But MOQ announced just last week that it had been raised to 6 cents.

So it seems we now have a bidding war going on for MOQ shares.

With the reception of the Brennan bid of 7 cents, MOQ has declared this bid a ‘superior proposal’ and has given Attura until Thursday 11 August to “match or offer more favourable terms to” this new bid from Brennan.

So we shall have to see what happens next. But no doubt MOQ’s shareholders would probably be pleased with the enormous gains we have seen today from this ASX tech share.

The post Guess which ASX tech share just soared 40% on takeover news appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• ‘Excited about the pipeline’: Why Wilson says the CSL share price is in the buy zone right now
• The 1 reason Amazon shares may not be a buy right now
• Leading brokers name 3 ASX shares to buy today
• Could this key metric signal more bad news for the Bitcoin price?

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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.

Amazon.com (NASDAQ: AMZN) just had a great quarter, and its stock is rising as a result. Although shares are still down 16% year to date, Wall Street expects the e-commerce giant to keep growing because its business model seems to show resilience even during recessionary times. 

Yet, as good as business was for Amazon, there are warning signs too that should give investors pause. Maybe now isn’t the best time to buy its stock.

E-commerce slows as cloud services soar

Amazon’s growth rate is slowing. While revenue of $121 billion was up 7.2% year over year, that was actually down sequentially and represents its slowest growth in 20 years. It also lost $2 billion in the period, with both domestic and international retail showing operating losses.

The core retail business continues to face a number of headwinds right now, including rampant inflation, energy costs that remain historically high, elevated transportation costs, and rising labor costs. 

While much of Amazon’s net loss can be blamed on the continued downward spiral of electric truck maker Rivian Automotive Inc. (NASDAQ: RIVN) in which Amazon has a big investment and caused a $3.9 billion pre-tax valuation loss, those macroeconomic inputs are also impacting Amazon’s margins. 

But what’s keeping the e-commerce company’s financial position looking better than it otherwise would is the cloud services business, Amazon Web Services (AWS), which showed solid, double-digit growth of 33% in the quarter. AWS revenue hit $19.7 billion, generating operating income of $5.7 billion, also up 36%.

Trimming the fat and then some

And that may be masking a deeper issue. Amazon shed almost 100,000 workers in the quarter, or about 6% of its workforce, and they are the largest cuts it has made in a single quarter. 

CFO Brian Olsavsky said they added employees in the first quarter due to the omicron variant of the coronavirus, but they essentially became redundant afterward. It was able to get rid of most of those let go through normal attrition, and Amazon still has over 188,000 more workers than it did last year. He also said Amazon would likely increase staffing levels for the holidays again.

Still, after years of operating as a job-creation machine, the growth trajectory has suddenly come to an end. The reduction also likely helped Amazon save on labor costs in the quarter, something it struggled with during the so-called Great Resignation when people left their jobs and never returned to the market.

In last year’s fourth quarter, for example, Amazon took a $4 billion charge mostly because of labor costs, and though Olsavsky said last quarter the company needed to improve efficiency while it increased staffing, it instead reduced employment levels.

The reduction comes as many other tech companies are also slashing their payrolls, including Microsoft (NASDAQ:MSFT) and Shopify (NYSE: SHOP), while Alphabet (NASDAQ:GOOGL) and Meta Platforms Inc. (NASDAQ:META) have eased back on hiring. 

Clouds on the horizon

Amazon’s payroll cuts likely helped improve its financial picture for the period, but it hints that the recessionary winds blowing may not be so transient. If we enter a protracted period of economic contraction, Amazon may see e-commerce growth slow as consumers find it difficult to keep spending.

Amazon.com is no longer necessarily the place to find the best price on goods, though admittedly that may not have been the prime attraction for its service in a while. Breadth of product and delivery speed has been a bigger value.

In a recession, though, that might not be the case, and despite its cloud services’ increasingly essential to the overall businesses as time progresses, online retail may hamper performance. The underlying message of the job cuts just might mean this is not the time to buy Amazon stock.

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

The post The 1 reason Amazon shares may not be a buy right now appeared first on The Motley Fool Australia.

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More reading

• Everyone is talking about this stock. Is it a good long-term option?
• Should investors pounce on Amazon stock during the Nasdaq tech sell-off?
• How did the BetaShares Metaverse ETF perform on its ASX debut?
• 5 tech stocks sending the Nasdaq higher on Wednesday
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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 Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Motley Fool contributor Rich Duprey 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 Alphabet (A shares), Alphabet (C shares), Amazon, Meta Platforms, Inc., Microsoft, and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. 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.

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

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Block Inc (ASX: SQ2)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and US$125 (A$180) price target on this payments company’s shares. This follows the release of Block’s quarterly update last week. Credit Suisse was pleased with what it saw and believes that if the Cash App business continues its strong growth it could underpin a rerating of the company’s shares. The Block share price is trading at $126.67 today.

Nearmap Ltd (ASX: NEA)

A note out of Citi reveals that its analysts have retained their buy rating and $1.90 price target on this aerial imagery company’s shares. Citi has been looking at Nearmap’s new Hypercamera 3 platform. The broker expects it to help the company extend its leadership in the aerial imagery market as a vertically integrated player. It highlights that the platform has the ability to drive higher revenue growth through new premium products and reduce capture costs via higher altitude operations. The Nearmap share price is fetching $1.47 on Monday.

Santos Ltd (ASX: STO)

Analysts at Macquarie have retained their outperform rating and $10.00 price target on this energy producer’s shares. The broker is expecting a strong result from Santos later this month. In addition, it suspects the company could reward shareholders with a greater than expected interim dividend thanks to its strong cash flow. The Santos share price is trading at $7.04 this afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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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 Nearmap Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nearmap 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 Bitcoin (CRYPTO: BTC) price dipped over the weekend, falling as low as US$22,911 after trading for as high as US$23,467 on Friday.

The world’s top crypto has regained some of the weekend’s losses, up just over 1% since this time yesterday. One BTC currently trades for US$23,331.

Bitcoin price pressured by strong US labour report

The Bitcoin price came under selling pressure following the release of July’s job report by the United States Labor Department.

That report showed the world’s biggest economy added 528,000 jobs last month, far exceeding consensus estimates of 250,000 new jobs.

In June, the US added 398,000 new jobs.

The jobs growth saw the US unemployment rate fall to 3.5% in July, compared to expectations of 3.6%. This brings the US unemployment rate back to the half-century highs it was at in the months immediately before the pandemic shuttered much of the world in early 2020.

Why is this good news bad?

Strong employment growth in the US is, of course, largely a good thing.

However, the strength saw the Bitcoin price retrace alongside other risk assets, with the tech-heavy NASDAQ closing 0.5% lower on Friday.

That’s because investors have been hoping recent interest rate rises by the US Federal Reserve and other global central banks, including the RBA, would already show some impact on tamping down inflation.

But the US jobs report stoked fears that the Fed will need to continue on its tightening path for some time yet before taking a more dovish approach, which would broadly benefit growth shares and cryptos.

Discussing the hit to the Bitcoin price, markets analyst at Oanda Craig Erlam said (courtesy of Bloomberg):

That was not a good jobs report for risk assets. That could worsen any slump further down the road, which is why we’re seeing risk assets sinking and Bitcoin is very much among them. It’s still a little higher on the day, but it’s given back a fair bit of its earlier gains.

Head of research at Valkyrie Investments Josh Olszewics said, “The Fed is likely less concerned with recessionary conditions and more focused on their dual mandate of inflation and unemployment.”

Adding that the Fed is “likely to continue with successive rate hikes”, Olszewicz said this will impact the demand for alternative assets.

And that, as we know, will throw up headwinds for the Bitcoin price.

The post Could this key metric signal more bad news for the Bitcoin price? appeared first on The Motley Fool Australia.

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More reading

• Is it smart to use dollar cost averaging to buy Bitcoin?
• Bitcoin price dips in August after soaring 22% in July. What’s going on?
• Bitcoin price dips. Is Ethereum on track to dethrone the top crypto?
• Why El Salvador is doubling down on Bitcoin despite the 2022 price crash
• The Bitcoin price is leaping 10% higher today. What’s going on?

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 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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