The ASX was higher today.
The S&P/ASX200 rose 10.00 points or 0.14% to 7,241.80 and set a new 100-day high. Over the past five days, the index has gained 1.49% but is down 2.72% since the start of the year.
The best performing stocks in this index were St Barbara Ltd (ASX:SBM) and Brainchip Holdings Ltd, up 9.09% and 8.63% respectively.
Other big winners were companies with an iron ore focus after iron ore prices rose 2% on Wednesday.
BHP Group rose 1.39%, while Fortescue Metals Group (ASX:FMG) firmed 0.92% and Rio Tinto Ltd gained 1.36%.
Qantas Airways (ASX:QAN) Group Ltd also rallied for some reason, possibly due to the current cost of interstate flights and despite cabin crew voting in favor of industrial action.
There is no official date for the strike, but it was announced a day after Qantas said it expected its underlying first-half profit to be $150 million higher than approximately $1.45 billion due to strong air travel demand.
“Just weeks after its initial guidance, Qantas has raised its earnings outlook for the final six months of 2022. This is despite already high oil prices, which are not expected to fall dramatically anytime soon,” said Josh Gilbert, market analyst at eToro.
“It’s a clear indication that even with sky-high airfares, demand for travel is strong and will continue into early next year. It also indicates the resilience of the average consumer, who continues to spend despite the rising cost This may be magnified by years of travel restrictions due to COVID-19 conditions.
“After a tough time during the pandemic, Qantas appears to be turning the tide. Its profit forecast has been raised by $150 million to between $1.35 billion and $1.45 billion, meaning its dividend could very likely be reinstated in 2023. As a result, Qantas may be able to further reduce debt, with net debt forecast to fall to $2.5 billion by the end of the year.
“Despite much media criticism of its service standards and growing scrutiny from CEO Alan Joyce, it has already been a banner year for Qantas investors, with shares up more than 17% and the market will certainly appreciate the news today.”
Qantas was as high as 2.1% today before ending up 0.49%.
Looking at sectors, only a few were down, with energy being the biggest loser at minus 1.81%. The biggest gainer was information technology, up 1.25%. Real estate rose 1.21%.
Make the news today
Zoom hits a wall
Faced with more competition and the shift from working from home to hybrid terms, Zoom hit a wall.
Gilbert said of Zoom’s current situation, “The return to the office and the waning impact of COVID-19 has seen Zoom’s astronomical growth hit a wall. Its sales have seen a sharp slowdown this year as it faces fierce competition from Microsoft, Google and RingCentral.
“His recent downgrade to forecasts is another sign of this competition and the challenging macroeconomic environment as corporate budgets are slashed.
“Zoom’s goal is to retain existing customers, grow and become a bigger platform. This is achievable with a decent cash position of over $1 billion, but given the context current macroeconomics, this cash is rapidly fading; a 17% year-over-year drop in its recent earnings.
“Zoom’s focus on expansion has seen its product suite grow to include Zoom Phone, a contact center and a CRM offering that could make its offering more attractive to enterprise customers.
“However, with so many companies currently looking to reduce software costs and many established players in the VoIP and CRM spaces, Zoom will need to communicate its value and competitive advantage to potential customers both effectively and quickly to gain a foothold. “
Gilbert also cited a slowdown in IT spending as having a broader impact.
“A slowdown in IT spending isn’t just affecting software companies, with hardware playing Dell and HP, both posting disappointing profit forecasts. Dell’s personal computing revenue fell 17% in third quarter, a sharp drop given that this segment represents 55% of the company’s total revenues.
“HP is facing similar challenges, with consumer revenue down 25% in the third quarter, as global PC shipments continue to fall. It’s clear from the market that computer upgrades are not a high priority on business or personal spending lists at the moment.This was the case recently in the technology sector, HP cut 6,000 jobs to reduce operating costs as they navigate a macroeconomic environment uncertain.
“Weak demand for the products and services of these companies may well continue as we head into 2023, which could indicate a further slowdown in growth. Until inflation begins to decline and increases rates are starting to ease, these midrange tech stocks are unlikely to reward investors anytime soon.”
Could a central bank move away from the dollar to boost bullion prices?
That’s the question posed by Justin McQueen, senior market analyst at Capital.com.
“According to the World Gold Council, central banks bought gold in the third quarter at the fastest pace on record, at around $20 billion. Among the biggest buyers of gold are Turkey, the Qatar and Uzbekistan.
“However, there are central banks that have not been identified that have purchased a significant amount of gold. Some believe it may actually be China, according to Nikkei reports,” McQueen said.
“The reasoning is that China would seek to reduce its exposure to the US dollar and has therefore been hoarding gold. Now, although China’s involvement cannot be confirmed, the fact that central banks have accumulated excessively provides underlying support for the precious metal.
While Netflix Inc (NASDAQ:NFLX) is a highly sought after stock, it is underperforming the market.
Shares of the internet video service returned -1.5% over the past month compared to the +6.9% change in the Zacks S&P 500 composite.
In the current quarter, Netflix is expected to post earnings of $0.49 per share, a change of -63.2% compared to the corresponding quarter of last year.
It’s not all bad news for Netflix, with reported revenue of $7.93 billion last quarter, representing a year-over-year change of +5.9%.
This week, Netflix ended a four-day losing streak, however, its performance is mixed compared to rivals Amazon and Disney.
One wonders if the introduction of ads in the basic streaming package will have a wider impact on user growth and therefore on the share price.
According to the Just Watch streaming guide, in Australia, 1,283 movies and 72 TV shows are not available to customers with the Basic with Ads option.
five to five
International Graphite orders micronization qualification plant for Collie plant
International Graphite Ltd (ASX: IG6) has taken the next step towards becoming a commercial producer of finished graphite products by ordering a qualification scale micronization plant to be installed at its downstream processing facilities in Collie, Western Australia .
Peninsula Energy Makes Positive Final Investment Decision for Lance Projects; aims to restart uranium production in the first quarter of 2023
Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) has finalized a positive Final Investment Decision (FID) to restart uranium production operations at the company’s flagship Lance Projects in Wyoming, USA -United.
Accelerating Field Resource Increases of Large Pegmatites, Highlighting Lithium Potential at East Pilbara
Accelerate Resources Ltd (ASX:AX8) soared by identifying numerous outcropping pegmatites during early reconnaissance work at the East Pilbara Lithium project in Western Australia, highlighting the potential for lithium mineralization.
Stellar Resources upwellings contained 29% tin resources at Severn as part of the Heemskirk project in Tasmania
Stellar Resources Ltd (ASX:SRZ) welcomes the results of an updated mineral resource estimate (MRE) for its flagship Heemskirk Tin project in western Tasmania, which indicates an overall 16% increase in tin content .
Read more | look
Kingston Resources Offers 114% Increase in Total Tonnage of SOZ Resource to Mineral Hill
Kingston Resources Ltd delivered a 114% increase in total tonnage to 3.8 million tonnes at 1.29 g/t gold, 19.2 g/t silver, 0.9% copper, 1, 6% lead and 1.4% zinc since its first mineral resource update for the Southern Ore Zone (SOZ) at the Mineral Hill mine in western New South Wales.
On your six
Tennis Australia launches start-up program to pilot technology at Australian Open
Tennis Australia has launched an accelerator program for tech start-ups with the aim of bringing technological innovations to the Australian Open.
The one to watch
Peninsula Energy plans to resume operations at Lance Uranium Projects
Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) CEO Wayne Heili joined Steve Darling of Proactive to announce that the company plans to restart uranium production at flagship Lance projects in Wyoming.