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The Webjet Limited (ASX: WEB) share price flew 7% higher in early trading in response to newly announced government stimulus.

What happened?

As reported by various media, including the ABC, the federal government is going to pay for half of the ticket price of around 800,000 to regional destinations to support airlines, airports, regional locations and employees.

The announcement is for flights between April to July, the 50% discount will be for places like the Gold Coast, Cairns, the Whitsundays, Uluru, Alice Springs, Launceston, Broome and Kangaroo Island.

There may be other regions or places that are supported in time, but that’s the starting group.

The ABC reported that senior government ministers hope this new package will encourage cashed-up Australians, who normally travel to Bali or Europe during Autumn and Winter, to instead spend their money at home. One example of a flight from Melbourne to the Gold Coast could be as cheap as $60 and boost traffic on the route by as much as 40%.

Prime Minister Scott Morrison said:

This package will take more tourists to our hotels and cafes, taking tours and exploring our backyard. Our tourism businesses don’t want to rely on government support forever.

There is also support for Virgin and Qantas Airways Limited (ASX: QAN) to keep around 8,600 jobs for staff involved in international travel so that they’re ready to resume international services when borders reopen.

The ABC also reported that things like waivers for airport security charges, relief for air service Australia fees, subsidies for regional routes and international freight assistance have also been extended to September. Small and medium businesses that are still under financial pressure will be able to borrow up to $5 million over a 10-year period.

Webjet’s recent progress

The Webjet share price has gone up 24% over the last month. It recently revealed its FY21 half-year result. It was pretty painful reading, with the total transaction value (TTV) dropping 89% to $267 million, revenue fell 90% to $22.6 million, expenses dropped 52% to $62.7 million and earnings before interest, tax, depreciation and amortisation (EBITDA) plunged 146% to a loss of $40.1 million.

The ASX travel share said that it had managed to reduce its monthly cash burn down to $4.8 million. But it had a closing cash balance of $283 million at the end of the period. Management said that the cash provides flexibility to withstand a delayed market recovery if it extends into the 2022 calendar year.

Webjet also said that its bank waivers extended through to 31 March 2022 and the remaining business to business debtor risk has now been mitigated.

But the company said that its online travel agency (OTA) business has already returned to profitability as domestic borders started to reopen. Webjet said that a large part of this was down to its highly variable cost base. Webjet’s OTA revenue fell 85% to $11.4 million, expenses dropped 78% to $10.3 million and EBITDA dropped 96% to $1.1 million – but it at least it wasn’t a negative number.

The WebBeds business is still facing difficulties, but Webjet said that initiatives are on track to deliver at least 20% greater cost efficiencies when at scale. It is focused on a transformation strategy designed for WebBeds to emerge as the number one global business to business player.

At the time of the results release, Webjet said that it believed that people will want to travel as soon as they are able to and it’s doing everything to ensure that the ASX travel share is there to capture demand when it happens. It thinks demand for leisure travel remains high.

More reading

• Why Flight Centre, Qantas, ResApp, & Volpara are racing higher
• Qantas (ASX:QAN) share price rises despite fears tourism will struggle after JobKeeper
• Why the Qantas (ASX:QAN) share price is soaring today
• These 4 ASX shares just got upgraded to a ‘buy’ rating
• IAG (ASX:IAG) share price could jump with this other ASX share after a broker upgrade

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. 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 PointsBet Holdings Ltd (ASX: PBH) share price has edged marginally higher today after its US rivals, DraftKings Inc (NASDAQ: DKNG), announced an upgrade to the projected size of the US sports betting market. 

What did Draftkings announce?

DraftKings held its virtual investor day presentation last night, where the company raised its long-term financial targets and upgraded its forecasts for the US sports betting market. The company cited positive legalisation trends to arrive at a new US$67 billion projection for the sports betting industry. It also noted that domestic online sports wagering alone could be worth US$22 billion or more, assuming all states legalise sports betting. The company did acknowledge that full legalisation could be ambitious because getting anti-gambling states such as Hawaii and Utah is likely to be difficult. 

This compares to commentary from PointsBet back in August 2020, which cites Morgan Stanley and JP Morgan estimating the US iGaming and Sports betting sector to be worth a combined US$12 billion by 2025. 

Another interesting point from its investor day was its commentary around Canada. Canada recently approved single-game sports betting and is estimated to be a $5 billion to $8 billion sports betting opportunity. 

Why this could be good for the PointsBet share price 

Despite being competitors and fighting each other for market share, DraftKings’ positive commentary regarding broader market conditions is likely to be good news for the PointsBet share price. 

PointsBet is currently operational in 5 US states including New Jersey, Illinois, Indiana, Iowa and Colorado. The company has also made plans to enter the iGaming sector with an in-house platform in the works for an inaugural launch in Michigan in 2H FY21, followed by New Jersey.

In its half-year results presentation, Pointsbet hinted at the potential opportunity to launch New York, a state with one of the largest estimated sports betting revenues, and Canada. 

Why the PointsBet share price is slumping this month

The PointsBet share price has slumped more than 20% in the last month. This brings its year-to-date returns to just 8% compared to its peak year-to-rate returns of almost 50%. 

PointsBet might have been caught in the recent tech and growth driven selloff due to rising bond yields. This has seen many leading ASX 200 shares, such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO), become some of the worst-performing shares this month. 

More reading

• Pointsbet (ASX:PBH) share price loses 6%. Here’s why
• Growth outlook fails to save the Aristocrat share price today
• PointsBet (ASX:PBH) share price falls despite 174% revenue growth

Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of Xero. 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 Bruce Jackson.

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The ResApp Health Ltd (ASX: RAP) share price is surging higher on Thursday.

In morning trade the digital health company’s shares are up 5% to 6 cents.

Why is the ResApp share price surging higher?

Investors have been buying ResApp shares on Thursday after the release of a positive announcement relating to a COVID-19 detection smartphone app.

According to the release, the company will shortly commence a US-based clinical study to explore the relationship between coughing and SARS-CoV2 (COVID-19) infection.

ResApp has appointed Phosphorus, a leading US clinical-grade testing company, to provide at-home COVID-19 testing for the study.

What is the study?

The release explains that ResApp will conduct a pilot clinical study to secure data to train an algorithm to identify COVID-19 through cough sounds recorded on a smartphone.

Its results will be compared against the gold standard at-home saliva-based Polymerase Chain Reaction (PCR) pathology test.

The company notes that its regulatory approved cough-based machine-learning technology only requires a smartphone and is currently used to assist clinicians in the diagnosis of patients for a range of respiratory conditions. It is confident that the ability to identify COVID-19 will considerably strengthen its offering and applicability both within health systems and potentially broader settings where rapid, mass screening would be of considerable value.

Management commentary

ResApp’s CEO and Managing Director, Dr Tony Keating, said: “While much progress has been made, the effects of COVID-19 are expected to continue well into the foreseeable future and we are confident that the development of this smartphone-based screening test will become an important and useful tool in many settings both within health systems and more broadly.”

“Securing the agreement with Phosphorus to support the study is an important step in gathering the high-quality US data needed to develop robust and accurate algorithms, in particular when combined with our large existing dataset of patients with non-COVID-19 lower respiratory tract illnesses.”

“Phosphorus has considerable experience in COVID-19 testing and its test will allow ResApp to obtain gold standard COVID-19 status from patients in the comfort of their own home. By recruiting in the at-home setting, we will have symptomatic and asymptomatic patients, an important factor in COVID-19 as it is both highly contagious and has considerably variability in its impact on patients,” he concluded.

The company intends to update the market on patient recruitment and developments in the coming weeks.

More reading

• Why Flight Centre, Qantas, ResApp, & Volpara are racing higher
• Why the ResApp (ASX:RAP) share price is sinking 5% today
• Why the ResApp (ASX:RAP) share price opened 10% higher today
• Here’s why the Resapp (ASX:RAP) share price closed 5% lower

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. 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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Apple Inc (NASDAQ: AAPL) is once again the world’s first publicly listed US$2 trillion company. After the Apple share price fell 4% two days ago, its market capitalisation has recovered to bring it back over the milestone level.

Let’s take a closer look at what’s been happening with the iOS developer’s share price over the last few days.

Apple share price rises and falls on investor anxiety

Both the tech-heavy Nasdaq Composite and the S&P/ASX All Technology Index (ASX: XTX) have taken a beating over the last month. Yesterday the Nasdaq officially entered a correction – that’s when a share market or index falls by 10% or more.

The fall saw billions wiped off the value of Apple, as well as companies like Microsoft Corporation (NASDAQ: MSFT), Amazon.com Inc (NASDAQ: AMZN), and Tesla Inc (NASDAQ: TSLA).

The fall in share price is the reason Apple briefly lost its $2 trillion valuation.

Why, though, were tech companies falling in the first place?

In one word, inflation.

Investors are worried the passage of the US$1.9 trillion stimulus bill through Congress, plus the market entering a “post-COVID” phase, will see inflation rise. Rising inflation usually equates to a higher interest rate. A higher interest rate makes bonds a more lucrative asset. US bonds are widely regarded as the safest investment – as the US has never defaulted on its debts.

Investors then sell riskier prospects (like Apple shares) to fund bond purchases. In the US, we’ve seen the share price of the aforementioned companies fall. Australia has also not been immune.

Take for example Afterpay Ltd (ASX: APT). As of writing, the Afterpay share price is sitting at $108.51. One month ago it was at $154.81 so we are now seeing nearly a 30% drop in just four weeks.

According to some, however, the market is out of step with policy makers. US Treasury Secretary Janet Yellen and RBA Governor Phillip Lowe have both stated that inflation is not a short- or medium-term worry.

That message may finally be reaching investors’ ears, enough to bring back the magic $2 trillion valuation for Apple.

And yet, the Apple share price was still edging lower last night (Aussie time). As of Wednesday’s close, shares in the tech giant were trading at US$119.98. That’s down 0.91% on Tuesday’s close. In comparison, the Nasdaq composite was down 0.58%.

More reading

• Apple is killing off the iMac Pro
• Here are the US shares ASX investors have been buying
• The tech-heavy Nasdaq is now in a correction!
• UK antitrust agency investigating apple over app store practices
• Why is everyone talking about bond yields?

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and recommends the following options: short March 2023 $130 calls on Apple, long January 2022 $1920 calls on Amazon, long March 2023 $120 calls on Apple, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon and Apple. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is tumbling lower. At the time of writing, the benchmark index is down 0.2% to 6,699.7 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are racing higher:

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price has jumped 8% to $19.26. Investors have been buying Flight Centre and other travel shares after the Federal Government announced a major stimulus package to support the domestic tourism sector. The government is planning to introduce a $1.2 billion package that would see certain regional domestic airline tickets cut by 50%.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is up 2% to $5.28. This has also been driven by news that the government will be supporting the domestic tourism market. In response to the news, Qantas CEO Alan Joyce said: “This support is fantastic news for aviation and for the thousands of businesses, big and small, that rely on the tourism industry. With the vaccine rollout now giving more certainty that state borders will stay open, this is the perfect time to provide stimulus and get people travelling domestically again, particularly given there won’t be any international tourists for another seven months.”

ResApp Health Ltd (ASX: RAP)

The ResApp share price has risen 5% to 6 cents. Investors have been buying the digital health company’s shares after it announced a US-based clinical study to explore the relationship between coughing and COVID-19. ResApp has engaged Phosphorus, a leading US clinical-grade testing company, to provide at-home COVID-19 testing for the study. ResApp is ultimately aiming to develop a smartphone-based algorithm to identify people with suspected COVID-19 through their cough sounds.

Volpara Health Technologies Ltd (ASX: VHT)

The Volpara share price is up 8% to $1.33 following the release of an investor presentation. Investors appear pleased with the company’s growth plans and confident it will achieve its goals. This includes growing its average revenue per user (ARPU) metric from US$1.16 to US$10 in the future.

More reading

• Why the Volpara (ASX:VHT) share price is pushing higher today
• Qantas (ASX:QAN) share price rises despite fears tourism will struggle after JobKeeper
• Why the Qantas (ASX:QAN) share price is soaring today
• These 4 ASX shares just got upgraded to a ‘buy’ rating
• IAG (ASX:IAG) share price could jump with this other ASX share after a broker upgrade

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and VOLPARA FPO NZ. 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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A behavioural finance expert has warned a deadly combination of share market volatility, economic conditions and rise in crypto-assets has massively increased the risk of “emotional investing”.

Emotional investing describes investors selling and buying impulsively without regard to the fundamental merits of the asset.

Oxford Risk behavioural finance head Dr Greg B Davies said that the current conditions have formed “the perfect storm” for emotional investing. 

“Following the coronavirus crash in the first quarter of last year when stock markets saw big falls, we are now in a bull market, with markets around the world rising. Optimism is higher because of hopes around the coronavirus vaccine roll-out and economic and fiscal stimulus programmes,” he said.

“However, there are huge economic problems ahead around unemployment and huge public spending deficits for example, so we should expect the unexpected in the markets over the coming months.”

Emotional investing manifests in buying when prices are high and selling when prices are low, leading to losses for the investor.

Oxford Risk previously calculated emotional investing averages out to about 3% per annum in lost returns. But the software maker warned the current “crisis” would punish investors even more.

Low interest rates and the rise of cryptocurrencies like Bitcoin (CRYPTO: BTC) have compelled investors to take on high risks that they would otherwise ignore.

“The pandemic means many investors are currently highly emotionally sensitive and have a shortened emotional time horizon which increases the appeal of get-rich-quick gambles,” said Davies.

“The rise in the value of Bitcoin has also led to a crypto-assets ‘gold rush’, with retail investors piling into an incredibly volatile asset class that most don’t understand.”

Cashing out isn’t the answer either

Stockpiling cash in volatile times might seem like a safe idea, but this reticence also costs investors dearly.

Oxford Risk estimated that this “reluctance” costs investors (or non-investors) in the long term about 4% to 5% per annum.

This inertia can grip even professional investors in volatile times.

GMO co-founder Jeremy Grantham, in a letter to investors in the middle of the global financial crisis, warned of “terminal paralysis”.

“Those who were over-invested will be catatonic and just sit and pray. Those few who look brilliant, oozing cash, will not want to easily give up their brilliance,” he said.

“So almost everyone is watching and waiting with their inertia beginning to set like concrete.”

Collins St Value Fund managing director Michael Goldberg said last month that it’s a golden time to buy when markets are down, not the other way round.

“It’s precisely during those times that all those around you think you are crazy, when even your ‘gut’ insists that you’re making a mistake that true long term profits are established,” he posted on Livewire.

“It’s in recognising that discomfort and realising that therein lies the opportunities that the greatest investors make the most spectacular returns.”

Goldberg said, as human beings, no one can completely eliminate emotion from decision making.

“We can’t expect to disconnect ourselves entirely from the impact of emotions when making investment decisions, but we can put in place a process that ensures that we are not driven by them.”

More reading

• ASX 200 Weekly Wrap: ASX finishes higher, despite tech selloff
• Cryptocurrency, autonomous vehicles, and energy efficiency are key to NVIDIA’s growth
• Why this fund manager changed his mind on Bitcoin
• Goldman Sachs to relaunch trading in Bitcoin futures
• Here’s why the Raiz (ASX:RZI) share price is soaring today

Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin. 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 Douugh Ltd (ASX: DOU) share price is surging in early morning trade. This comes after the company announced it has launched a new instant virtual card. At the time of writing, the financial wellness app provider’s shares are up 8.1% to 20 cents.

What did Douugh announce?

The Douugh share price is on the move as investors appear pleased with the company’s latest update.

According to this morning’s release, Douugh has launched its instant virtual card push provisioning in partnership with Mastercard.

Push provisioning is a type of technology that allows the user to link their card details within the app to a digital wallet. This eliminates the obsolete method of having to input the card numbers manually into the smartphone.

The new contactless payment method seeks to improve the customer experience through significantly reducing wait times to begin making purchases. Traditionally, it takes up to 10 days to receive a physical card, and sometimes longer due to COVID-19 supply chain delays. However, now customers can be instantly issued a virtual card and add it directly to their mobile wallet.

Douugh believes this will lead to improved customer activation rates. This is because the consumer banking fintech is one of the first to offer this feature in the United States.

According to a Mastercard survey, eight out of ten people stated that they use some form of contactless payment method. Most of these consumers explained that safety and security were the main reason for the digital adoption.

Management commentary

Douugh founder and CEO Andy Taylor touched on the company’s instant virtual card launch, saying:

We are delighted to announce the launch of push provisioning. This is the achievement of yet another critical milestone for the business. It allows us to dramatically shorten the cycle time for customers to be able to use the Douugh service.

As we see the US catch up with Australia in terms of the adoption of contactless mobile payments, it’s been vital for us as a mobile banking platform to be able to become digital first in how we facilitate the payment experience at point of sale.

About the Douugh share price

Since its listing in October last year, the Douugh share price has rocketed by almost 1,000%. However, year to date, Douugh shares have increased by only 8%.

On current valuation grounds, Douugh has a market capitalisation of around $66 million, with approximately 359 million shares on issue.

More reading

• Why Visa and Mastercard Shares Just Hit Their All-Time Highs
• One person earned $250,000 on Airtasker last year. Now it’s listing
• Why the Douugh (ASX:DOU) share price is jumping 12% today
• Douugh (ASX:DOU) share price falls as losses grow
• What’s with the Douugh (ASX:DOU) share price today?

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. 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 Volpara Health Technologies Ltd (ASX: VHT) share price has been a positive performer on Thursday.

In morning trade, the healthcare technology company’s shares are up over 3% to $1.27.

Why is the Volpara share price pushing higher?

The Volpara share price was given a boost today by the release of an investor presentation.

That presentation included a number of updates, which appear to have gone down well with investors.

Volpara began by reminding investors of its sizeable recurring revenue opportunity. The company’s software leverages artificial intelligence (AI) to improve the early detection of breast cancer by analysing mammograms and associated patient data.

This allows it to provide personalised breast care through clinical decision support and practice management tools. It is also a cost-effective solution to reduce breast cancer deaths.

What is its market opportunity?

Management estimates that breast cancer screening is a ~US$750 million Annual Recurring Revenue (ARR) opportunity for Volpara.

To achieve this ARR, the company is focusing on growing its market share and average revenue per user (ARPU) metric. In respect to the latter, at the end of the first half, its ARPU stood at US$1.16. However, management is aiming to increase this to US$10 in the future. This is by increasing the number of additional products used during the screening process.

While this might seem like an overly ambitious jump, management has reason to believe it is possible.

It notes: “Average Revenue Per User (ARPU) is the average revenue achieved per woman screened per year at a site – currently, our ARPU over the entire installed base is US$1.16, it’s at that level because most users have only the Aspen product currently which was historically sold as capital with a small service & maintenance contract, not as SaaS.”

“Since 1st November 2019, all new quotes/proposals are SaaS contracts, and most new deals are significantly above US$1.16 ARPU comprising multiple products – in Q2, ARPU on new deals was US$1.75 – US$4.30.”

What’s next?

Volpara isn’t resting on its laurels and is actively targeting other opportunities. This includes the lung cancer market with its Volpara Lung software.

In addition to this, the company is looking out for opportunities that will emerge from COVID-19.

It advised that it is focusing on Risk & Genetics and is positioned strongly versus other companies due to its balance sheet capacity and access to capital. In light of this, it is tracking merger and acquisition opportunities that would add to its US market share or increase its ARPU.

Is the Volpara share price in the buy zone?

According to a note out of Morgans from last month, the Volpara share price could be in the buy zone right now.

Its analysts currently have an add rating and $1.92 price target on the company’s shares. This implies potential upside of ~50% for its shares over the next 12 months.

More reading

• Is it time to buy these 2 hot ASX healthcare shares?
• 2 fast-growing small cap ASX shares to watch
• 2 exciting ASX tech shares to buy

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends VOLPARA FPO NZ. The Motley Fool Australia has recommended VOLPARA FPO NZ. 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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In an exclusive interview with The Motley Fool, UNSW Professor of Economics Richard Holden is warning the tourism sector will struggle when the JobKeeper payment winds up at the end of this month.

As the government looks set to introduce an airfare ticket subsidy to soften the blow, Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT) shares are both surging higher in morning trade. Experience Co Ltd (ASX: EXP) shares have failed to respond to the news and are currently trading nearly 2% lower. 

At the time of writing, the respective share prices of these companies are $5.35, $19.20 and 25 cents.

The federal government’s new domestic tourism program

Announced last night, the government is set to introduce a $1.2 billion package aimed at the domestic tourism sector as it weens the industry off of wage subsidies.

The proposal would see domestic airline tickets cut by 50% to the following regional centres:

• The Gold Coast
• Cairns
• The Whitsundays
• The Sunshine Coast
• Alice Springs/Uluru
• Launceston
• Devonport
• Burnie
• Broome
• Avalon
• Merimbula
• Kangaroo Island

As The Guardian’s political reporter, Amy Remeikis noted, most/if not all the towns listed are in marginal federal electorates. 

What do these tourism areas all have in common? Oh nothing. Just that they’re seats the government either wants to win, or needs to keep 🤷‍♀️ pic.twitter.com/W8hCpIzmUM

— Amy Remeikis (@AmyRemeikis) March 10, 2021

https://platform.twitter.com/widgets.js

As a part of the package, Qantas and Virgin will need to provide monthly reports to the Commonwealth on international flight readiness.

Professor Holden does not believe the package is adequate.

“It’s something but not nearly enough in my view.” He told this reporter.

“It relies on a strong response from the rest of Australians and that is highly uncertain. It’s very different [to] the kind of guarantee provided by JobKeeper.”

Professor Holden warned generally about the government’s proclivity for austerity.

“[The Morrison government’s] fiscal policy has too much emphasis on a budget surplus sooner rather than later.” “The economy [pre-pandemic] was not good. Per capita GDP growth was 0, inflation was below [RBA targets], and wages were stagnating.”

“Until the economy can really open up – we can’t be withdrawing fiscal policy. If anything, we should see more [government spending].”

Those in the tourism sector feel likewise. Talking to the Australian Financial Review (AFR), Tourism Australia and Experience Co. chair Bob East said he would prefer direct grants or a continuation of the subsidy.

“I’d love to say I’m hearing there will be direct grants for tourism operators, but I’m not.”

Part of the scheme also entails granting small and medium enterprises loans of up to $5 million.

Quoted in the AFR, Queensland Tourism Industry Council chief executive Daniel Gschwind says debt is the last thing these businesses want.

“We can’t get excited about no interest or low interest loans,” he said. “I can’t see a struggling tourism operator taking on more debt. The appetite for more loans is very low.”

The head of Accor Group Australia told ABC Radio National the proposal wouldn’t “deliver in a material way for the industry as a whole.”

We’ve asked the head of Australia’s biggest hotel group @Accor whether the Government’s cut-price flights will save the tourism sector? “Sadly I don’t think it will. It won’t deliver in a material way for the industry as a whole.” @RNBreakfast #auspol

— Julia Holman (@JulesHolman) March 10, 2021

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Others are predicting up to 100,000 jobs may disappear when the $1,200 a fortnight wage subsidy ends.

Australia’s slow vaccine rollout

The Sydney Morning Herald (SMH)’s COVID vaccine tracker says around 86,000 vaccines have been administered in Australia as of writing. This is way down on Scott Morrison’s target of having 4 million arms jabbed by the end of this month.

Professor Holden says the economy cannot recover, and therefore JobKeeper cannot be withdrawn until we have a critical mass of vaccinations.

As we’ve seen many times over the past year, states and territories are ready to close borders on a moment’s notice.

“I worry about [another Melbourne/Northern Beaches like outbreak] a lot. We need to build confidence. “Every lockdown shatters business and consumer confidence.” “It’s incredibly shaky as it is now.”

“We can’t have [federal Health Minister] Greg Hunt saying we need to wait and see if the vaccine is killing people. That doesn’t build confidence.”

Share price snapshots

Qantas shares reached a 52-week low of $2.03 in March last year. Since then, the Qantas share price has rocketed 163%. Flight Centre shares reached a 12-month low at the same time – $8.56. While it’s more than doubled since then, it is still lower than its pre-pandemic price of $21.59.

The Experience Co share price one-year low was 3.3 cents. At their current valuation, Experience Co shares have gained more than 650% since then.

The respective market capitalisations of these companies are around $9.8 billion, $3.6 billion, and $141.7 million.

More reading

• Why the Qantas (ASX:QAN) share price is soaring today
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The Sovereign Cloud Holdings Ltd (ASX: SOV) share price is on the move today following the release of a first half investor presentation.

In morning trade, the infrastructure as a service (IaaS) company’s shares are sinking 5% to 88 cents.

What is Sovereign Cloud?

Sovereign Cloud is an IaaS company supporting the secure and continuous delivery of information. It counts the Australian government, the Australian Defence Force (ADF), and Critical National Industry (CNI) communities as customers.

Through the AUCloud brand, the company’s IaaS service provides customers with a highly secure, scalable, automated cloud solution, delivering an efficient and effective hosting environment for critical and sensitive applications and systems.

How did Sovereign Cloud perform in the first half?

While Sovereign Cloud has previously released its half year accounts, today’s presentation includes extras such as its outlook.

In respect to its results, for the six months ended 31 December, the company reported a 267% increase in revenue to $1.1 million. This left it with a total contract value (TCV) of $2.1 million at the end of the half, which was almost triple its TCV at the end of June.

TCV is the total value of expected revenue from estimated consumption of IaaS secured through non-enforceable customer contracts.

And while the company reported a cash outflow of $3.1 million, which was consistent with the prior corresponding period, it retains a healthy balance sheet. At the end of the period, the company had a cash balance of $20.5 million.

Outlook

Management notes that its AUCloud brand has a major market opportunity to grow into in the future.

This includes a proposed $15 billion spend by the ADF relating to information and cyber security and over $13 billion being spent by the Federal Government on ICT services.

The company commented: “Our focus into each of the above segments is reaping results based on increasingly proven capability, accreditations and growing customer needs with a view to increasing AUCloud’s appeal to the Australian Government and Defence and their supply chain providers.”

While this is positive, it hasn’t been enough to stop the Sovereign Cloud share price from sinking today. Though, it is worth noting that it is still 17% higher than its December IPO price of 75 cents.

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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. 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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