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Sales enablement software developer Bigtincan Holdings Ltd (ASX: BTH) has been one of the standout performers in the ASX tech space over the past 6 months.

In that time, Bigtincan shares have soared over 50% higher (to $1.33, as at the time of writing). The gains have come on the back of the company’s strong recent financial performance, as well as the announcement of a key strategic acquisition.

Company background

Bigtincan’s software platform is designed to support its corporate clients through their entire sales and marketing lifecycle. It helps to deliver and automate many of the processes involved in onboarding and training new staff, engaging with customers, and analysing sales figures (among other things).

Bigtincan operates a software-as-a-service (SaaS) business model, which means it sells subscription-based licenses to its customers. The licenses allow customers to access Bigtincan’s software platform remotely using cloud technology – but must be renewed periodically.

This is why SaaS companies will often talk a lot about “annual recurring revenues” (or ARR for short). These are the revenues expected to be received annually based on the current number of active subscriptions.

The financials

Bigtincan released its FY21 financial results to the market on 26 August. Revenues for the year ended 30 June 2021 were up 42% (to $43.9 million). However, increased operating expenses meant that the company’s net loss increased year on year, from $12.2 million in FY20 to $13.9 million in FY21.

The company explained the increase in operating expenses was due to investments in “growing the business”. This included projects such as increasing the company’s data science capabilities and strengthening its infrastructure to support higher customer numbers.

Brainshark acquisition

But the really big news came a few days prior to the release of the company’s results. That’s when Bigtincan announced that it was acquiring US-based sales coaching software developer Brainshark, Inc. for US$86 million.

Acquisitions are not a new part of Bigtincan’s growth strategy. Earlier this year, it acquired voice analytics company VoiceVibes, Inc., also based in the US.

But the Brainshark acquisition is still a level up for Bigtincan. Brainshark has been around since 1999 and already employs 180 staff. It has more than 900 corporate customers, including international brands like JPMorgan Chase & Co. (NYSE: JPM), PepsiCo, Inc. (NASDAQ: PEP) and Zoom Video Communications Inc (NASDAQ: ZM).

Bigtincan estimated that annual recurring revenues for the combined entities would reach at least $119 million by the end of FY22. By comparison, Bigtincan’s ARR at the end of FY21 was just $53.1 million. No wonder the Bigtincan share price jumped almost 25% higher when the acquisition was announced to the market.

Recent moves in the Bigtincan share price

The Bigtincan share price has trended lower in September. After climbing as high as $1.48 by late August (its highest price since last October), the Bigtincan share price has now slid back around 10%.

The company has also completed a capital raise during this time, with the funds being put towards financing the Brainshark acquisition.

Bigtincan shareholders will now be looking ahead — and hoping the Brainshark acquisition can deliver on its potential.

The post Here’s why the Bigtincan share price has soared 50% higher in the past 6 months appeared first on The Motley Fool Australia.

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Rhys Brock owns shares of BIGTINCAN FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BIGTINCAN FPO and Zoom Video Communications. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX dividend shares could be a useful place to look for ideas to boost investment income.

Some businesses have dividend yields that are more than 5%, which is a lot more than what someone can get from a savings account at the moment.

However, just because a business pays a dividend or distribution, doesn’t necessarily make it a buy for income. But there are analysts out there are on the lookout for opportunities, which may also have high dividend yields.

These are two that are currently rated as buys:

Waypoint REIT Ltd (ASX: WPR)

Waypoint is a business that owns a large portfolio of petrol service stations across Australia’s road networks. Its stated objective is to maximise the long-term income and capital returns from its ownership of the property portfolio.

The business has been busy maximising value for investors. In its half-year result it told investors it had sold 37 non-core assets for a total of $132 million, representing a premium of almost 11% to the prevailing carrying value.

The ASX dividend share is also benefiting from rising asset prices – the gross valuation uplift for the six months to 30 June 2021 was $189.8 million, helping its net tangible assets (NTA) increase 10.4% to $2.75 per security.

Waypoint says that it offers secure rental income with embedded growth, underpinned by long-term leases to quality tenants.

At 30 June 2021, it had a 99.9% occupancy rate, a 10.5 year weighted average lease expiry (WALE) and “strong” organic rental growth unpinned by a weighted average rental review (WARR) of 2.9%. Viva Energy Group Ltd (ASX: VEA) is the key tenant.

In FY21, it’s expecting to grow its distributable earnings per security to a range of between 15.72 cents to 15.8 cents. That’s growth of between 3.75% to 4.25%.

The broker Morgans rates Waypoint REIT as a buy. In FY22 the broker thinks Waypoint will pay a distribution of 16 cents per security, which is a forward yield of 5.9%.

Stockland Corporation Ltd (ASX: SGP)

Stockland is a diversified property business with a few different segments including residential communities, retirement living communities, land lease and commercial property (predominately retail town centres).

It’s currently rated as a buy by Citi. Stockland is expected to pay a FY22 payout of 28 cents per security. That translates to a forward yield of 6%.

The ASX dividend share generated $1.1 billion of statutory profit, though funds from operations (FFO) fell 4.6% to $788 million, or 33.1 cents per security. It also generated $1 billion of operating cashflow.

In FY22, it’s expecting to generate FFO per security in a range of 34.6 cents to 35.6 cents. The distribution per security is forecast to be within a target payout ratio of between 75% to 85% of FFO.

Residential settlements are expected to be around 6,400 lots. The residential operating margin is expected to be around 18%. It’s also expecting land lease communities to deliver 300 settlements in FY22. The business has a $33 billion pipeline of work.

However, Stockland says that current market conditions remain challenging.

The post These 2 ASX dividend shares are rated as buys appeared first on The Motley Fool Australia.

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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 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 Bruce Jackson.

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The Qantas Airways Limited (ASX: QAN) share price is in the green today amid the launch of an ultra-cheap sale ahead of the planned easing of Victoria’s border restrictions.

The 24-hour ‘flash sale’ could see residents of Victoria and New South Wales flying between the 2 states for as little as $20.

The cheap tickets are for flights taking off after 5 November, in line with the Victorian Government’s roadmap out of COVID-19.

Right now, the Qantas share price is $5.44, 1.12% higher than its previous close.

Let’s take a closer look at Qantas’ latest sale.

Qantas share price up amid anticipation of domestic reopening

The Qantas share price is soaring today. At the same time, the airline is offering cheap flights for locked down Aussies.

Jetstar’s 24-hour ‘flash sale’ began at 5 pm last night. It was announced by Qantas just 1 hour before it began.

As part of the flash sale, some Jetstar flights have been reduced to as little as $20 per ticket. Jetstar’s sale covers flights between Melbourne or Avalon and Sydney, Newcastle, or Byron Bay.

Additionally, Qantas’ vaccination rewards program is still providing $20 vouchers to Australians who get jabbed.

Those who get in before 5 pm tonight have a chance of scoring the ultra-cheap Jetstar tickets.

Most of the cheap tickets on offer are for flights taking off between 5 November and mid-December. Those dates coincide with the Victorian Government’s plan to ease border restrictions for fully vaccinated people.

All eyes will be on the Qantas share price if borders between Australia’s 2 most populous states reopen as planned. Though, it seems the company’s carriers are confident that travel between the states is a little more than 6 weeks away.

All-inclusive Qantas flights between the 2 states are also being offered from as little as $99 each way as part of the airline’s 5-day sale.

The post Qantas (ASX:QAN) share price gains amid $20 flights resting on domestic reopening appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

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

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The Kathmandu Holdings Ltd (ASX: KMD) share price is falling this morning despite reporting a 35.9% surge in full-year underlying earnings.

Kathmandu share price slumps as earnings surge 36%

The Kiwi retailer this morning reported its results for the year ended 30 June 2021 (FY21). Some of the key takeaways include:

• Sales up 15.1% on the prior corresponding period (pcp) to $922.8 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) up 35.9% to $113.3 million
• Gross margin up 40 basis points (bps) on pcp to 58.7%
• Underlying net profit after tax (NPAT) up 110.2% on pcp to $66.3 million
• Underlying operating cash flow of $93.3 million

The Kathmandu share price is falling this morning amid a broader market decline, even as the company announced a 3 cents per share final dividend after declining to pay anything in FY20.

What happened in FY21 for Kathmandu?

FY21 was a big year for the Kiwi retailer as it grappled with the knock-on effects of COVID-19. The Kathmandu share price has managed to climb higher in the past 12 months despite the pandemic.

The company reported a 31.3% jump in online sales growth for its Ripcurl brand during the year. That strong performance came in the first full year of operations following the November 2019 acquisition.

Kathmandu launched its Oboz footwear brand in April 2021 and recorded double-digit growth in its forward wholesale order book in FY21. The company also reported the successful relaunch of its flagship Kathmandu in May 2021.

The company also committed to the largest sustainability-linked loan in New Zealand as part of its core environmental, social and governance (ESG) commitment during the year.

What did management say?

CEO and Managing Director Michael Daly said:

We are proud of the results we have been able to produce over the past 12 months in the face of ongoing COVID challenges, delivering strong sales and positioning the business for sustained growth.

While Kathmandu has felt the impacts of COVID related travel restrictions, we were pleased with the early momentum following the brand relaunch in May 2021.

Our refreshed Group strategy ensures we are focused on the things that matter most as we move into FY22 — building global brands focused on active outdoor activities, investing in digital platforms to provide consumers with a truly world class unified commerce experience, operational excellence and sustainability [ESG] leadership.

How has the Kathmandu share price performed recently?

2021 has been a good year for shareholders so far. The Kathmandu share price is up more than 15% year to date including almost 12% in the last month alone.

At the time of writing, Kathmandu shares are trading hands for $1.375, a fall of 3.85% on yesterday’s closing price.

The company has a market capitalisation in excess of NZ$1 billion at the time of writing.

The post Kathmandu (ASX:KMD) share price slumps despite 36% earnings surge appeared first on The Motley Fool Australia.

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• AusNet (ASX:AST) share price to rise after APA (ASX:APA) starts bidding war
• Why this broker downgraded the Domino’s (ASX:DMP) share price
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Motley Fool contributor Ken Hall 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 Bruce Jackson.

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The Bank of Queensland Ltd (ASX: BOQ) share price is starting the day off in the red today. This comes despite the regional bank announcing a reshuffle of its management team.

At the time of writing, Bank of Queensland shares are swapping hands for $9.03, down 1.42%.

Key appointments

In a statement to the ASX, Bank of Queensland advised it has made two new executive appointments to its leadership team.

First, David Watts will become the bank’s new chief risk officer, effective in early 2022.

Bank of Queensland noted Watts brings more than 25 years of senior executive experience in financial services. This includes several appointments as a chief risk officer across leading Australian and New Zealand financial institutions.

Watts comes directly from Australia’s largest general insurer, Insurance Australia Group Ltd (ASX: IAG). He served as chief risk officer there from 2018. Prior to this, he held senior executive roles with National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) for 17 years and 9 years, respectively.

Current chief risk officer Adam McAnalen will remain an executive within the group and will move to a new role. Bank of Queensland said, “the new position will lead key elements of the integration and transformation program”.

Furthermore, the company’s chief product officer Chris Screen will become group executive business banking.

Since joining in 2019, Screen has supported key turnaround programs and was the interim group executive for retail banking. He has extensive business banking experience and has held executive roles at Westpac, St. George, and NAB.

Screen’s appointment is effective from 1 October 2021.

Soon-to-be former executive Bank of Queensland executive Fiamma Morton will depart the company to pursue other opportunities.

About the Bank of Queensland share price

Over the last 12 months, Bank of Queensland shares have moved on an upwards trajectory, posting a gain of 60%. Year-to-date, its shares are hovering above the 20% mark.

Bank of Queensland presides a market capitalisation of roughly $5.9 billion and has approximately 640 million shares outstanding.

The post Bank of Queensland (ASX:BOQ) share price dips on key appointments appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) dividend will be finally landing into shareholder accounts today. This comes at an opportune time as investors would have seen their wealth fall significantly in the past few weeks.

At the time of writing, BHP shares are fetching for $37.34, down 0.51%. A far cry from when the world’s second largest mining company’s shares were touching record highs of $54.55.

What’s happened to BHP shares recently?

The plunging spot price of iron ore has had a detrimental effect on the miner’s shares.

In May, the steel-making ingredient reached an all-time high of US$229.50 per tonne. BHP shares accelerated on the back of bumper revenues over the period.

However, a slowdown in Chinese demand amid political pressure has led iron ore prices to tumble in recent months. As Australia’s rift grows with China, policymakers in the Asian giant introduced new rules for its steel producers. This is seen as an effort to curb reliance on Australian iron ore and boost domestic supply and demand.

Chinese mills were instructed to limit 2021 output to no more than 2020 levels, or face harsh consequences.

Deep cuts have been made over the months of July and August, 8% and 12% respectively. Further reductions are expected for the remainder of 2021, as current iron ore levels are up 5% year-to-date compared to 2020.

At the most recent price, iron ore is trading around US117.01 per tonne, falling another 4.87% overnight.

What about the BHP dividend?

After reporting a robust full-year result, the board declared a record fully-franked final dividend of US$2 (A$2.7152) per share. This brings the full-year dividend to US$3.01 when factoring in the interim dividend, up 151% year-on-year.

While investor holdings in the company will be down for the moment, the BHP dividend has come at an opportune time. Depending on what eligible shareholders opted for, the dividend could be paid to shareholders today or reinvested back into the company for more BHP shares.

In hindsight, for every 100 BHP shares owned, you can expect to receive roughly $271.52 (100 shares x $2.7152). However, if you elected to be in the dividend reinvestment plan (DRP), you will be receiving 7 new BHP shares ($271.52 / $37.34 (current BHP share price)).

BHP share price snapshot

It has been a rollercoaster ride for BHP investors, with its shares reaching an all-time high in August.

Over the last 12 months, the company’s share price is flat, with year-to-date down by more than 10%.

BHP commands a market capitalisation of roughly $110.7 billion and has approximately 2.95 billion shares on its registry.

The post The final BHP (ASX:BHP) dividend will be paid to shareholders today. Here’s what to expect appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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The AusNet Services Ltd (ASX: AST) share price was the best performer on the S&P/ASX 200 Index (ASX: XJO) on Monday.

The electricity distributor’s shares rocketed higher after it received a takeover approach from Brookfield Asset Management.

The good news for shareholders is that the AusNet share price is likely to be rising again on Tuesday after a second suitor tabled an offer.

What’s happening?

On Monday Brookfield Asset Management made a non-binding offer to acquire the company for $2.50 per share.

This was a 26% premium to AusNet’s closing price of $1.98 on Friday. AusNet decided to provide Brookfield with the opportunity to conduct exclusive due diligence.

In response to this, rival electricity distributor APA Group (ASX: APA) has tabled an offer of its own.

What offer has been made?

According to the release, APA has made a non-binding indicative proposal to acquire AusNet by way of a scheme of arrangement for $2.60 per share in cash and scrip.

The release notes that the proposal would bring together two high quality businesses. It would also create a listed flagship Australian company with the scale and capability to accelerate the $20 billion growth in electricity transmission infrastructure needed to support the decarbonisation of Australia’s economy.

APA advised that it has been circling for a few weeks. The company made its first confidential offer of $2.32 per share on 1 September. After which, it made AusNet aware last Thursday that it would be making an improved offer. In light of this, it was disappointed that AusNet granted Brookfield an eight-week period of exclusivity.

Nevertheless, APA’s CEO, Rob Wheals, appears optimistic that the combination of the two companies will be possible.

He commented: “Unlike many OECD countries, Australia lacks a locally owned and controlled energy utility with capabilities across critical energy infrastructure and with the size and strength to partner with government and the community to deliver the energy transition.”

“The combination of APA and AusNet is a unique opportunity to deliver that vision and retain a proudly Australian controlled combined group listed on the ASX,” the CEO added.

The APA share price is down 2.5% on the news.

The post AusNet (ASX:AST) share price to rise after APA (ASX:APA) starts bidding war 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 no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended APA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is pushing higher on Tuesday.

In early trade, the pizza chain operator’s shares are up 1.5% to $157.80.

This means the Domino’s share price is now up 79% since the start of the year.

Can the Domino’s share price keep rising?

Unfortunately, the Domino’s share price could be fully valued now according to one leading broker.

According to a note out of Bell Potter, its analysts have downgraded the company’s shares to a hold rating with a $155.00 price target.

The broker is a big fan of the company and believes it is well-placed for growth over the medium term. This is due to its significant organic growth prospects, with management aiming to more than double its store network to 6,650 by FY 2033 across existing territories.

Bell Potter also expects the company to make acquisitions in adjacent markets, expanding its store network further.

However, it felt its valuation was getting stretched after its recent run. For example, it notes that the Domino’s share price was trading at 50x estimated FY 2023 earnings and 40x estimated FY 2024 earnings prior to today’s session.

Bell Potter commented: “DMP has been one of our preferred stock picks through the pandemic amongst our consumer facing coverage. Following DMP’s strong share price performance, we recently removed DMP as a preferred pick in our retail sector note dated 3 September.”

“With the stock trading at FY23e/FY24e PE ~50x/~40x, we have also now downgraded our rating from Buy to Hold with an unchanged 12-month price target of $155.00,” the broker added.

All in all, the team at Bell Potter appear to believe that investors would be best waiting for a decent pullback in the Domino’s share price before considering an investment.

The post Why this broker downgraded the Domino’s (ASX:DMP) share price 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The prospect of a stock market crash is likely creeping into the minds of investors this week as China’s second-biggest property developer Evergrande spooks the global financial markets.

Evergrande has around US$300 billion of liabilities to banks and bondholders. Last month, it warned that it may fail to pay its creditors.

Fitch Ratings downgraded Evergrande’s credit rating to ‘CC’ in early September, suggesting “a default of some kind appears probable”.

The real estate conglomerate has a looming US$83.5 million bond interest payment due on Thursday, a major test as to whether or not it has conjured up enough cash to pay bondholders.

Could this cause a stock market crash?

Evergrande’s liabilities are far-reaching and involve more than 128 banks and 121 non-banking institutions, including household names such as BlackRock and Allianz.

Fitch Ratings reported that Evergrande’s credit risk could have broader implications, affecting home builders through to the banking sector.

Fitch said:

In the unlikely event that a default unsettles the broader property market, significantly disrupting sales and investment, this could have farther-reaching macroeconomic effects. We estimate the sector accounts for approximately 14% of GDP.

Risks to our growth outlook on China are mitigated by the government’s capacity to intervene with policies to shore up the housing market, but we believe the threshold for such support will be high — as it might set back other priorities such as reducing real-estate lending concentration and tackling the high cost of housing.

Wall Street cratered overnight, with major indices the Dow Jones Industrial Average, S&P 500 and Nasdaq sliding 1.78%, 1.70% and 2.19% respectively.

Encouragingly, Markets Insider reported that many market experts believe Evergrande is “too big to fail and is likely to be rescued by the Chinese government, limiting the economic impact on China and the world”.

What does this mean for the ASX?

The S&P/ASX 200 Index (ASX: XJO) couldn’t escape the gloom and doom on Tuesday, down 1.3% to a 4-month low of 7,118.

While it might feel like the beginning of a stock market crash, the ASX 200 is still up a comfortable 9% year-to-date.

Investors might want to keep an eye out for the resources sector, given the fact the Chinese real estate and building sector are the main drivers of steel and copper usage, according to Mining.com.

ASX 200 mining heavyweights BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Ltd (ASX: FMG) have cratered under the recent slump in iron ore prices, down 12%, 17% and 40% respectively year-to-date.

The post Worried about a stock market crash? Here’s what you should know appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• Here are 3 of the most popular ASX 200 shares by volume today
• Rio Tinto (ASX:RIO) share price craters as iron ore hits US$100 a tonne
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Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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While Australia slept last night, the US stock market faced a tough selloff for a variety of potential reasons.

Some media outlets have blamed the US stock market’s awful day’s trade on worries surrounding the Chinese property market. Others are pointing to uncertainty regarding an upcoming US Federal Reserve meeting or proposed tax increases and policy changes as the reason for the drop.

Whatever the reason, the Dow Jones Industrial Average (INDEXDJX: .DJI) fell 1.8%, or 614 points, overnight.

The S&P 500 (INDEXSP: .INX) also dropped 1.7%, or 75 points.

Additionally, the Nasdaq Composite Index CAD (INDEXNASDAQ: COMPCAD) plunged 2.2%, that’s 14,714 points.

So, what caused the US stock market’s suffering, and what does it mean for the ASX? Let’s take a look.

What sent the US stock market tumbling overnight?

The US stock market has taken a beating overnight with some pointing to a Chinese property giant as the major catalyst.

According to reporting by The Wall Street Journal (WSJ), the Hong Kong-listed China Evergrande Group might be to blame for the US stock market’s struggles.

The Evergrande share price plunged 10.2% overnight.

The outlet states the company, which has more debt than any other listed real estate development or management company, noted it was struggling last week.

The WSJ claims there’s a risk China’s government will let the company fail. Additionally, it stated Evergrande’s challenges may negatively affect the Chinese economy, thereby damaging other global economies in its wake.

However, as the Australian Financial Review (AFR) reports, some experts believe the US stock market is being hit by an overdue correction.

Other experts told the AFR the dip was exacerbated by deadlocks in US Congress and proposed tax increases. Additionally, some pointed to the US Federal Reserve’s upcoming November meeting as the cause of the selloff.

Either way, the ASX might be in for a day of carnage.

What does this mean for ASX shares?

As The Motley Fool Australia has previously reported, the ASX largely follows the US stock market’s activities.

There are ample reasons as to why this is the case. Here are 3 of big ones:

The New York Stock Exchange is the largest in the world, with the US’s NASDAQ exchange coming in second. Due to the amount of money that passes through these 2 exchanges, they have a huge global influence.

Further, plenty of investment and cultural sentiment overlaps between Australia and the US and it’s no different on our stock market.

Finally, 23.3% of all foreign investment into Australia in 2020 came from the US, according to the Department of Foreign Affairs and Trade. This likely solidifies the link between our economies and, as a result, our stock markets.

The post The US stock market plunged overnight. What could this mean for ASX shares? appeared first on The Motley Fool Australia.

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