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ArvinIG

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  1. ArvinIG

    Apple stock: is now the time to buy?

    By ArvinIG,


    Analyst article
    Even though September is often when Apple shines but things are a bit different this year.

    Source: Bloomberg   Shares Apple Inc. iPhone Market sentiment Technical analysis Smartphone   Apple’s new strategy
    September 7th, 2022 saw Apple Inc unveils its 2022 lineup of smartphones and digital assets. The launch includes a base model iPhone 14, a larger Plus version, the 14 Pro, and the 14 Pro Max.
    The gap between the base and the Pro model is apparent with the Pro models receiving a 48-megapixel camera upgrade, a much faster A16 Bionic chip, a new always-on-display feature and a 35% higher charge. The upgrades and improvments in the iPhone are all designed to fit into Apple's new strategy.
    What does the new strategy mean for Apple?
    This new strategy has the potential to be a game changer for Apple.
    Over the previous years, the lower-priced iPhones usually did well in sales and this was evident during the second quarter of 2022 when Apple sold about 37% more of the base model iPhone 13 and 13 Mini than the two Pro versions.
    But for the new series, the expectation is that the iPhone 14 Pro and iPhone 14 Pro Max will account for 50 to 60% of total shipments for the rest of the year with the iPhone 14 Pro Max, the most expensive version, anticipated to make up 30 to 35% of sales alone.
    This new product strategy, if successful, will not only help Apple to seize more market shares, an area where Samsung is leading at the moment but more importantly, will help the company enjoy higher margins to combat the inflation headwinds.
    Apple’s share price and technical analysis
    Over 2022, Apple's share price has declined 18% and only a further 15% since August 18th.
    However, despite a slightly questionable performance, it is still safe to say Apple remains a company investors can count on. Given its robust business and financial performance, the recent dip in prices doesn't change the fact that shareholders have received enviable returns over the last five years, at around 300%.
    The share price for Apple has been working hard to stabilize the ground around the 100-day moving average after the recent decline to a two-month-low. That brings the price back to the crucial $150 level signalling the potential for further downside.
    However, with the price dipping deep into the oversold territory, we could see the possibility that selling pressure should ease soon.
    Even so, with an overall bearish sentiment in play, it may be too optimistic to expect a quick turnaround. A rise through the $154 level, where the 20-day MA sits, would be required to negate this bearish short-term view.
    Apple daily chart

    Source: IG

    Hebe Chen | Market Analyst, Melbourne
    27 September 2022
  2. ArvinIG

    Are BHP, Rio Tinto shares a ‘buy’ now?

    By ArvinIG,


    Analyst Article
    Global iron ore producers BHP and Rio Tinto have been beset by challenges in China, including a recent power shortage.

    Source: Bloomberg   Shares BHP Dividend Iron ore Ore China   BHP (ASX: BHP) share price sheds 2.8% day-on-day Rio Tinto (ASX: RIO) slides to A$95.17 per share Some factories in China paused production, depressing iron ore prices But the mining heavyweights’ dividends could stay above pre-Covid levels Keen to bet on BHP Group and Rio Tinto’s falling share price? Open an account with us to go short on the stocks. Heavyweight mining stocks slide further
    Shares of Rio Tinto and BHP, part of Australia’s big mining triumvirate, continued to skid on Wednesday as investors weighed the potential impact of China’s widening power crunch as well as the Evergrande fallout.
    As of 11:42 AEST in Sydney, BHP was trading 2.8% lower at A$35.84, while Rio fell 2.4% to A$95.17 per share.
    In China, a power shortage has halted production at several factories, including many that supply components to Apple Inc and Tesla Inc, Reuters reported.
    The resultant demand concerns thus depressed iron ore and base metal prices, weighing on mining giants’ shares. Australian miners are dependent on Chinese demand for raw materials.
    Miners’ dividends ‘well covered’: Bloomberg
    Despite the falling free-cash-flow of metals and mining companies, their dividend payments ‘should remain above pre-pandemic levels’, said Bloomberg Intelligence (BI) on Tuesday.
    BI expects the overall high iron ore price in 1H 2021 to enable Rio and BHP to pay high dividends, which should be ‘well covered’ from 2021 to 2023, assuming iron ore stays at roughly US$100 per tonne.
    Given their low financial leverage, Rio and BHP may use their balance sheets to increase shareholder remuneration via special dividends or buybacks, the analysts added.
    What is the outlook on BHP shares?
    BHP’s ASX-listed stock attracted seven ‘buy’ ratings from analysts, as well as five ‘hold’ and one ‘sell’, as of Wednesday.
    On average, the research teams targeted A$47.80 per BHP share, Bloomberg data showed. That implies a potential upside of nearly 30% based on Tuesday’s close.
    Since late last week, fresh recommendations from analysts have been optimistic. BHP was rated ‘outperform’ or ‘buy’ by RBC Capital, Macquarie, Morningstar, Bernstein, Shaw and Partners, and Jefferies.
    The target prices from these bullish analysts ranged from A$42 to A$61, according to Bloomberg data.
    Rio Tinto reaches labour deal in Canada
    On Sunday, Rio said it has reached an agreement in principle with Canadian union Unifor for the company’s operations in the western Canadian province of British Columbia, after weeks of second-round negotiations.
    The first round, regarding proposed changes to workers’ retirement benefits and unresolved grievances, fell through in July.
    Meanwhile, the Australia-listed RIO shares garnered seven ‘buy’, seven ‘hold’, and two ‘sell’ calls from analysts as of Wednesday.
    Their average target price was A$119.49, according to Bloomberg data. That implies a potential upside of about 23% based on Tuesday’s close.
    Operationally, Rio ‘remains a turnaround story’, said JPMorgan. The analysts are ‘overweight’ on the stock and targeting A$150, favouring its ‘relatively inexpensive valuation metrics and strong shareholder returns’.
    Thinking of trading BHP and Rio Tinto shares?
    Take your position on BHP, Rio Tinto and over 13,000 Australian and international shares via CFDs or share trading – and trade it all seamlessly from one account.
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    Kelvin Ong | Financial writer, Singapore
    29 September 2021
  3. ArvinIG

    Are Boohoo shares a recovery buy?

    By ArvinIG,


    Analyst article
    Will Boohoo’s share price recover after trading turned a corner?

    Source: Bloomberg   Shares Boohoo.com Retail Price Investor Brand   Boohoo's share price jumped 17% on Thursday to 91.97p after the company surprised investors with an upbeat trading statement after last year’s profit warnings. Shares in the AIM-traded online fashion retailer collapsed from a high of 359p in April 2021 to just 74p last year after it warned profits would be lower than analysts’ forecast in September and December.

    In the three months to the end of February, the retailer saw net sales growth of 7% in the fourth-quarter (48% growth over 2 years) and growth of 14% for the full-year.

    Boohoo said that in the quarter, gross sales growth was strong - up 26% compared with the same period in 2021 and up over 50% (57%) compared with the same period in 2020. The company, which owns brands such as PrettyLittleThing and Coast, continued to be affected by higher return rates than expected. Management blames this on the “product mix” and says it expects this issue to continue into the first-half of 2023.

    Boohoo ‘returns to growth’ internationally

    Trading in the UK was strong, however, the digital retailer’s international performance is still being negatively affected by pandemic-related supply chain issues. Nevertheless, the company saw a return to growth in the rest of the world thanks to the performance of wholesale.

    Boohoo now expects to deliver adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of £125m, in line with the revised earnings guidance it gave at the previous profit warning in December. It posts full-year results in May.

    "The Group has delivered strong growth over the last two years, which has translated into significant market share gains,” John Lyttle, group chief executive told investors. “We are confident that pandemic-related headwinds are short-term in their nature and our focus is to ensure the business is well positioned for growth as these headwinds ease."

    These figures were in line with Boohoo’s previous pre-Christmas profit warning in its third-quarter trading update. At the time, the retailer told investors that it expected net sales growth to be 12% to 14%, compared to previous expectations of 20% to 25% for the year to 28 February 2022.
    Poor working conditions at Boohoo factories being addressed

    Boohoo has also been criticised for the poor treatment of the staff at its factories in Leicester. A number of ESG (sustainable) investors pulled out of the company following concerns about employee working conditions and safety issues around Covid.

    However, the company says it is working to improve matters through its Agenda For Change (A4C) programme, which is being overseen by retired judge, Sir Brian Leveson.

    Boohoo's suppliers now have to seek independent approval on sourcing and ethical compliance.
    Boohoo pulls out of Russia

    Along with a number of other retailers including ASOS and H&M, Boohoo has suspended trading in Russia in response to Putin’s invasion of the Ukraine. However, the company stressed that Russian sales were “not material” and comprised of less than 0.1% of group revenues.

    “Boohoo is deeply concerned about the tragic developments in Ukraine,” the board said in its statement. “Immediately following the invasion, the group suspended sales to Russia, and also closed its Russian trading websites.”

    Analysts raise price targets on Boohoo shares

    Following the brighter trading update, a number of analysts have raised their price targets on the shares. Broker Deutsche Bank issued a buy rating and set a price target of 230p, while analysts at Liberum think the shares could hit 200p.

    Shore Capital also reiterated its ‘buy’ rating on Boohoo. The broker points to the retailer’s “structurally higher EBITDA (earnings before interest, depreciation and amortisation) margin” [compared to] others outlets which also sell third party brands because of its own label focus. Analysts there expect the company’s performance to improve once supply chain issues ease.

    “Faster delivery times remain the critical competitive advantage, while the recent extension into mid-market brands should inoculate boohoo from competitive threats,” the analysts commented. “Boohoo has demonstrated a great degree of adaptability and built a portfolio of brands (organic and acquired) that allow it to focus on a broader market with enhanced segmentation.”

    The online retailer will have to contend with continued inflationary headwinds and the likely margin squeeze. However, with Boohoo’s shares down 70% this year, they are a speculative buy on recovery hopes.

    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
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    IG Analyst
    15 March 2022
  4. ArvinIG
    The Hang Seng Tech index, which tracks the 30 largest tech-themed companies listed in Hong Kong, has delivered a drawdown of as much as 68% since its February’s peak last year.

    Source: Bloomberg   Indices Shares China Risk Severe acute respiratory syndrome coronavirus 2 Hang Seng Index   Brief overview
    The Hong Kong Tech index, which tracks the 30 largest tech-themed companies listed in Hong Kong, has delivered a drawdown of as much as 68% since its February’s peak last year. Although there were some attempts to stabilise in recent weeks with further policy support from authorities and easing Covid-19 restrictions, previous rounds of dip-buying were met with relatively short-lived relief rallies. This bodes the key question of when we can actually see an eventual bottom.
    From a valuation standpoint, the price-to-book ratio for the index currently stands at 0.96, which may seem to be at an attractive level on a longer-term timeframe, trailing way below the Nasdaq 100 index valuation of 6.7. That said, to provide a longer-term confidence boost for the sector, several uncertainties may be on watch.
    Some risks to watch
    Covid-19 risks
    While there has been some relief following China’s upcoming shift towards normalcy, its zero-Covid-19 stance remains in place, which points towards on-and-off economic restriction measures in the event of any virus outbreaks. Its low elderly vaccination rate and lopsided distribution of healthcare resources suggests that its strict position may not see a shift anytime soon. One may have to watch for a prolonged period of low virus cases, which may revive market confidence in the authorities to keep virus spreads under control and potentially put Covid-19 risks on the backseat. Additionally, we may have to see markets gradually adjusting their expectations around intermittent virus outbreaks, with any resilience in market performance to rising virus cases potentially a positive sign.
    Regulatory risks
    Just as dip-buyers carry some belief that regulatory reforms from authorities may be nearing its end, there have always been overnight surprises thrown in their way. While the hot-and-cool tone around the regulatory landscape continues to play out, one may have to watch for signs of a shift in tone from the authorities to potentially display some form of compromise. This will remain a black box, with the latest hurdle revolving around the potential delisting of Chinese tech firms from US stock exchanges. Previous talks have not seemed to lead to any concrete results, reinforcing the fact that it is a tricky issue to resolve.
    Global risk sentiments
    Global risk sentiments remain largely fragile in light of further tightening from central banks and the impending trade-off for economic growth. While China’s policies are deviating towards the accommodative end, any global risk-off mood may have a knock-on impact on performance in the region as well. With policy support and economic reopening, a stronger recovery in economic indicators over the coming months will be on watch ahead to gauge the impact of easing policy success and pent-up demand. That said, the huge drawdown for the Chinese tech sector since February last year has brought its valuation to near record low level, which may aid to limit the extent of losses from the global scale. The 20-day correlation between the Hang Seng Tech index and the Nasdaq 100 index has been negative since mid-May this year, and any divergence in performance ahead may be a positive sign of breaking away its influence from external factors.
    What can we expect in the near term
    The KraneShares CSI China Internet ETF (KWEB) offers exposure to Chinese software and information technology, with its top few holdings comprising of Tencent Holdings (10.6%), Alibaba Group Holding (9.0%), Meituan (7.8%), JD.com (7.4%), Baidu Inc (6.9%) et cetera. From a technical perspective, equity bulls may be seeking to defend a key support line at the $26.00 level, which marked its bottom back in 2013 and 2015. While a previous symmetrical triangle pattern may denote some market indecision, a recent break out of the triangle this week may seem to suggest that buyers are seeking to regain greater control. That said, should the $26.00 fail to hold, it may point to the strong bearish pressure in place, opening the doors for further downside.
     

    Source: TradingView  
    On the monthly chart, a hammer candlestick seems to be in place, coming after three consecutive months of negative performance. That may potentially increase the chances of a near-term rebound, with one to watch for any confirmation close in the coming month.
     

    Source: TradingView  
    Technical analysis – Hong Kong Tech index
    While the higher highs and higher lows for the Hong Kong Tech index in recent weeks suggests an attempt for a near-term upward trend, a key resistance at the 4,500 level may need to be overcome in order to provide further upside. This is where a downward trendline since November last year stands in place with a horizontal resistance level, which weighed on the index on two previous occasions since April. In the event of a retracement, the 4,067 level may seem to be on watch for any formation of a higher low, where the lower trendline of an ascending channel pattern may serve as support.
     

    Source: IG charts   Yeap Jun Rong | Market Strategist, Singapore
    02 June 2022
  5. ArvinIG

    Are Diageo shares an inflationary hedge?

    By ArvinIG,


    Analyst article
    Shares in Diageo fell last week on Heineken’s worries about cost pressures but offer a safe haven

    Source: Bloomberg   Shares Diageo Hedge Cost Share repurchase Guinness   Shares in Diageo dipped last week after fellow drinks giant Heineken warned that inflationary pressures were “off the charts”. Dolf van den Brink, executive chairman and chief executive of the Dutch brewer, told investors at the full-year results that the “speed of recovery” from the Covid-19 pandemic remained “uncertain”. He also said that the company faces “significant inflationary challenges” due to rising manufacturing and shipping costs.

    With input prices expected to rise by a percentage in the mid-teens, van den Brink told the Financial Times that there was now “increased uncertainty” over Heineken’s midterm profit forecasts. Heineken fears that customers could stop drinking as much beer as it is forced to hike prices. “We will offset these input cost increases through pricing in absolute terms, which may lead to softer beer consumption,” the company told investors.

    As investors read across to Diageo, the shares fell 1% to 3595p in intraday trading. Numerous other food and drink producers, including Carlsberg, Nestle, Kelloggs and PepsiCo have all recently warned of cost inflation and the need to pass price increases onto consumers.

    ‘Vice stocks’ like Diageo are a hedge against inflation

    However, shares in companies producing consumer staples, such as alcohol, are traditionally a good inflationary hedge because customers are likely to continue to buy their pint or tipple despite cost pressures. Diageo owns 200 alcohol brands, which it sells across 180 countries, including Smirnoff, Guinness, Johnny Walker, Bailey’s and Captain Morgan. It is also enjoying buoyant sales, reporting broad-based growth across most of its brand categories at the recent half-year results, particularly in scotch, beer and tequila. The company is experiencing growth in China and Latin America.

    Despite a tough year due to the Covid-19 pandemic, Diageo posted solid half-year results in January, with net sales up 15.8% to £8bn and strong organic growth, despite currency fluctuations. Organic net sales were up 20%, while reported operating profits rose 22.5% to £2.7bn and operating margins increased by 190 basis points thanks to growth in organic operating profit, which rose 24.7%, with growth experienced across all regions.

    Premium plus brands generated 56% of reported net sales and delivered 74% of organic net sales growth. “We have made a strong start to fiscal 22,” Diageo’s chief executive Ivan Menezes told investors at the half-year results in January. “While we expect near-term volatility to remain, including potential impacts from Covid-19, global supply chain constraints and rising cost inflation, I am confident in our ability to successfully navigate these disruptions through the remainder of the year.

    “Over the medium-term, from fiscal 23 to fiscal 25, we continue to expect organic net sales to consistently grow within a range of 5% to 7% and organic operating profit to grow sustainably within a range of 6% to 9%."

    Diageo’s position of strength

    The company also boasts a strong balance sheet, with a leverage ratio of 2.5% at the lower end of Diageo’s target range. Net cash flow during the period, while down slightly on the previous year (-£0.1bn), remained strong at £1.9bn, while free cash flow was £1.6bn during the half-year, down £0.2bn due to an exceptionally strong working capital benefit in the comparative period.

    Diageo also completed £0.5bn of share buybacks during the half-year to 31st December 2021 as part of a plan to return up to £4.5bn to shareholders. Today it has announced it is buying back another £1.7bn of shares.

    The company won’t be immune from inflationary pressures. However, the fact that it has a diverse geographical spread and owns many popular well-known brands should make it less vulnerable than other companies.

    Diageo shares are up 22% this year to 3658.5p but are down from the high of 4103.5p they reached in January. Analysts at Barclays have set a price target of 4800p. The share price looks likely to continue to climb, given the flight to quality stocks and rising cost inflation.

    Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.
    * Best trading platform as awarded at the ADVFN International Financial Awards 2021
    IG Analyst | Publication date: Tuesday 22 February 2022 02:17
  6. ArvinIG
    What is next for equities following July’s market rally?

      Indices Shares Central bank Market trend Stock Market sentiment   What's next for equities?
    After July’s market rally many investors are likely wondering what is next for equities?
    Historically, when markets are trapped in a bear market there are often rallies that make investors feel like it’s the right time to buy, before being trapped once again in a selloff.
    If we look at both charts of US indices and European indices we see the same technical pattern - a sustained break above a key area of resistance. As mentioned, this is not uncommon to see and usually precedes another downturn.
    But the performance in July has been quite something, with most indices managing to achieve a follow-through to the initial reversal. This has likely left many investors feeling like it’s the right time to buy again, but is that the case?
    Well, in other instances when market sentiment has taken such a sharp turn during a bear market, it has usually involved central banks cutting rates and loosening monetary conditions. This hasn’t happened yet, and will likely not happen for a while, but markets seem to be very convinced central banks will start cutting soon and are therefore trying to front run the market. This is likely going to be a costly mistake if it turns out to be another rally within a bear market.
    The belief that inflation has been handled and the key focus of central banks is aiding economic health has likely been the cause of many of those who think the lows in June were the bottom of the market.
    But the Federal Reserve (Fed) has in fact reiterated that bringing price stability is more important than avoiding a recession in the US, a key takeaway that seems to have been overlooked.
    We have also seen the central bank abandoning forward guidance and focusing on incoming data to make its policy decision, meaning there is likely more volatility up ahead for equities.
    We’re also seeing companies cutting their growth forecasts and warning about staff cuts, which will in turn lead to a weaker third quarter (Q3), something investors don’t seem to be considering.
    Technical outlook: S&P 500 and the DAX 40
    The technical outlook for both the S&P 500 and the DAX 40 is still showing the longer-term trend to be bearish.
    Despite having broken above key resistance at their respective descending trendlines, the momentum over the last two sessions is showing buyers are struggling to find further upside in the short-term. This means that both the S&P 500 and the DAX 40 could start to return to their longer-term bearish trend over the next few days.
    Daniela Sabin Hathorn | Presenter and Analyst, London
    02 August 2022
  7. ArvinIG
    We spotlight ten of the largest and most important mining companies currently listed on the Australian Stock Exchange.

    Source: Bloomberg   Indices Shares Commodities Mining Gold Australia  
    Mining in Australia: what you need to know Top ASX mining stocks How to buy or invest in mining stocks 10 best ASX mining stocks to watch in 2021 Top ASX mining stocks: Where next? Mining in Australia: what you need to know
    Australia is known as the lucky country. Though this notion was conceived as an insult to Australian culture, there is no denying that Australians, when compared to the rest of the world, possess enviable wealth. A matter of luck indeed, this wealth has been sustained by way of virtue of the abundance of raw minerals that exist underneath the Australian soil.
    Reflecting that fact, the total value of mineral exports have risen steadily over time, in 2020 generating $270 billion in export revenue and making up 62% of the country's total export revenue. Of that, a significant portion was driven by iron ore exports, with iron ore exports hitting $116 billion in 2020. Coal, gold and copper make up the next most valuable exports – though as the table below highlights – combined they still are not as valuable as iron ore.
    Commodity
    Export Value (2020)
    Associated Stocks
    Iron ore
    $116 billion
    FMG, BHP, RIO,
    Coal
    $54.6 billion
    YAL, WHC, BHP
    Gold
    $27.1 billion
    NCM, NST, EVN
    Copper
    $10.4 billion
    OZL, SFR, AIS
    Ultimately, being right at the doorstep of China, Australia’s economy has been in prime position to exploit the Chinese economic miracle. As China has grown, and their need for industrial materials increased, Australia has played a significant role in building and fuelling the Chinese economic engine.
    While not the nation’s only trading partner, the list of minerals that Australia mines and exports is illustrative of the Chinese and Australian economic relationship. The most well-known of Australia’s mineral exports include iron ore, coal, lead and gold. In fact, Australia is the world’s largest exporter of iron ore and coal, and the world’s second-largest exporter of gold.
    Top ASX mining stocks
    BHP Group Fortescue Metals Group Rio Tinto Newcrest Mining South32 Northern Star Resources Mineral Resources Evolution Mining Oz Minerals IGO Company
    Ticker
    Related Commodity
    Share Price
    Market Capitalisation
    BHP Group
    BHP
    Iron ore, coal, copper, petroleum, nickel
    $50.50
    $152.8bn
    Fortescue Metals Group
    FMG
    Iron ore
    $25.42
    $79.3bn
    Rio Tinto
    RIO
    Iron ore, aluminium, gold, copper
    $127.83
    $48.4bn
    Newcrest Mining
    NCM
    Gold
    $26.37
    $21.9bn
    South32
    S32
    Coal, aluminium
    $2.87
    $13.8bn
    Northern Star Resources
    NST
    Gold
    $10.29
    $12.49bn
    Mineral Resources
    MIN
    Iron ore, lithium
    $59.27
    $11.32bn
    Evolution Mining
    EVN
    Gold
    $4.28
    $8.01bn
    Oz Minerals
    OZL
    Copper, gold
    $20.81
    $7.1bn
    IGO
    IGO
    Cobalt, nickel, copper,
    $8.38
    $6.48bn
    How to buy or invest in mining stocks
    You can invest in any of the ASX-listed mining stocks we have discussed today in two ways: either through share trading or derivatives trading. Share trading means that you take direct ownership of a company’s stock, meaning you could potentially profit if the share price increases in value or benefit from any dividends a company might decide to pay.
    By comparison to owning the shares outright, derivatives trading – such as CFD trading – allows you to speculate on the price movement of a company’s shares without actually taking ownership of them.
    Benefits of CFD trading
    CFD trading may prove attractive to some investors for a number of reasons, including the flexibility to trade stocks long and short, the ease of which it allows one to hedge, as well as the ability to gain larger exposure to an asset through leverage.
    Follow the simple steps below to start investing or trading mining stocks:
    Investing in mining shares
    Create or log in to your share dealing account and go to our trading platform Search for the stock you would like to invest in Select ‘buy’ in the deal ticket to open your investment position Choose the number of shares you want to buy Confirm your purchase and monitor your investment Trading mining shares
    Create or log in to your trading account and go to our trading platform Decide whether CFD trading is right for you Search for the stock you would like to trade Choose your position size Open your position and monitor your trade Learn about the costs associated with trading and investing with IG here.
    10 best ASX mining stocks to watch in 2021
    Below we look at the top 10 mining ASX-listed mining stocks that investors may want to watch in the year ahead, ranked from highest market capitalisation to lowest.
    1.BHP Group share price +17.28% YTD
    BHP Group is Australia’s largest diversified mining company, with operations spanning iron ore, coal, copper, petroleum, gas and nickel. BHP, like Fortescue and Rio Tinto, has been a significant benefactor of the recent runup in iron ore prices, with the company’s share price and profits rising firmly in the last year.
    The stock is dual-listed, with stock tradable on both the Australian Stock Exchange and the London Stock Exchange. Despite that dual-listing, the company remains headquartered in Melbourne, Australia.
    Trade BHP shares.
    2.Fortescue Metals Group share price +2.50% YTD
    Unlike BHP Group, Fortescue Metals Group is a pure play iron ore miner. Though the company was mired by operational uncertainty at the start of the last decade, it has since grown from strength to strength, currently standing as the seventh largest, public company in Australia.
    As noted at the start, much of that can be attributed to China’s insatiable demand for iron ore products, with FMG’s lower grade mix increasing exponentially in popularity in the last few years.
    Trade Fortescue shares.
    3.Rio Tinto share price +10.81% YTD
    Smaller than FMG and more closely resembling BHP, Rio Tinto has diverse mining operations, with a main focus on iron ore, aluminium, and copper. Despite being worth nearly $50 billion, the miner has faced a number of controversies and setbacks in recent times.
    In 2020 the company destroyed a key aboriginal cultural site – Juukan Gorge – with the CEO at the time, stepping down in response. More recently, the miner’s expansion attempts in Mongolia – through the Oyu Tolgoi mine, which commands one of the world’s largest copper and gold deposits – have hit regulatory setbacks and seen substantial CAPEX increases.
    Trade Rio Tinto shares.
     
    4.Newcrest Mining share price -2.37% YTD
    Departing from the iron ore theme, Newcrest Mining represents Australia’s largest gold producer, boasting a market capitalisation in excess of $20 billion. Despite being listed in Australia, Newcrest has operations spanning the globe, with mines in Canada, Australia, PNG, and Papua New Guinea.
    Centrally, the miner touts low-cost and long-life mines, and also has a number of promising brownfield and greenfield projects in the pipeline.
    Trade Newcrest shares.
    5.South32 share price +14.80% YTD
    Despite trading well-off its 2018 peak, not to mention the myriad of environmental concerns around coal, with iron ore exports remaining an important part of Australia’s economic health, South32 retains its prominence.
    While South32 may be best known for its coal operations, the miner’s operations span significantly beyond that, with production across aluminium, energy, metallurgical coal, manganese, nickel, silver, lead and zinc.
    Trade South32 shares.
    6.Northern Star Resources share price -22.57% YTD
    While not as large as Newcrest, Northern Star touts a number of tier-1, low sovereign risk operations across Australia (Jundee, South Kalgoorlie) and North America (Pojo). Speaking to the prolific nature of these operations, at the time of and to date, the miner had produced over 20 million ounces of gold.
    As the miner notes on its website:
    ‘Northern Star has a portfolio of low-cost, high-grade underground gold mines, and is firmly focused on maximising Shareholder returns.’
    Trade Northern Star shares.
    7.Mineral Resources share price +54.07% YTD
    The smallest of the iron ore miners on this list, Mineral Resources nonetheless boasts a portfolio of what is described as a set of world-class mine sites across the Pilbara and Goldfields regions within Australia.
    A distinctly forward-focused miner, as the company notes on its website:
    ‘We look for opportunities to grow our core business through producing commodities and innovation. In executing this model, we are undertaking a number of key growth projects that, combined, will deliver a 30 to 50-year pipeline of work to our mining services business.’
    Between June 2016 and June 2021, the Mineral Resources share price gained almost 484%, making it one of the best performing stocks on this list.
    Trade Mineral Resources shares.
    8.Evolution Mining share price -18.79% YTD
    Like Northern Star, Evolution Mining focuses on low risk, tier-1 jurisdictions – with operations across Canada and Australia. The miner’s key growth prospects include: Cowal underground, Red Lake transformation, Ernest Henry mine life extensions and Mungari discovery.
    From a strategic perspective, management said that Evolution was focused on driving growth by ‘improving the quality of our assets rather than increasing the number of assets in the portfolio.’
    The company maintains that mid-tier producers tend to deliver shareholders with the best returns. Between June 2016 and June 2021, the Evolution Mining share price has risen over 100%.
    Trade Evolution Mining shares.
    9.Oz Minerals share price +7.49% YTD
    Counting itself as Australia’s third largest copper producer, Oz Minerals is well positioned to benefit from the country’s significant presence in the global copper market. Investors appear optimistic about the miners prospects too: between June 2016 and June 2021, the stock has risen over 300%.
    With operations across Australia and assets in Brazil, Oz Minerals describes itself as a ‘Modern Mining Company that adapts to the ever changing environment, harnessing the innovative ideas of our people and collaborating to leverage the experience of those around us.’
    Trade Oz Minerals shares.
    10.IGO share price +24.70% YTD
    While mining companies are often accused of harming the environment, IGO, through its Nova nickel-copper-cobalt operation, is focused on developing mine sites to drive a clean energy future.
    To that end, beyond IGO’s existing Nova project, the miner has a number of exploration projects across Australia and Greenland in progress, including Kimberley, Paterson, Raptor, Lack Mackay, Fraser Range, and Frontier.
    ‘Exploration and discovery are core to the IGO DNA. It is a key platform for our growth-in-value strategy.’
    Investors have taken notice: between June 2016 and June 2021 the IGO share price has more than doubled.
    Trade IGO shares.
    Top ASX mining stocks: Where next?
    The mining industry has delivered to Australians extraordinary wealth and good fortune. The country’s post-colonial history has been punctuated by periods of mining booms, that has been used to develop the wealth of the nation.
    Since the rise of China as an economic powerhouse in the early 2000’s, contemporary Australians have been lucky enough to enjoy the riches generated from mining activities. Arguably, with the help of Chinese economic stimulus to spur the demand, it was the boom in commodity prices and mining activity that guided Australia through the worst of the Global Financial Crisis unscathed.
    Such a dependence on the export of raw materials is a risk to the Australian economy. It’s often said in Australia that the nation’s economic model is to dig stuff up and speculate the proceeds on residential housing. The country’s economic welfare is very much tied to global growth and can therefore be exposed to the whims of the economic cycle.
    However, with new innovations in the global economy, such as the growth in the electric car market, and developments in the renewable energy industry, Australian miners have moved to exploit the country’s vast deposits of minerals like lithium and uranium.
    Here are some other articles you might be interested in:
    Our deep dive into Australia’s lithium market: Top ASX Lithium Stocks to Watch in 2021 A closer look at gold and silver equities: Best gold and silver stock Shane Walton | Financial Writer, Australia
    20 July 2021
  8. ArvinIG
    The pandemic has brought both disruption and innovation to the cosmetics and beauty industry, plus unique opportunities for traders and investors. Check out some attractive cosmetics stocks to buy, short and invest in now.

    Source: Bloomberg   Shares Cosmetics Estée Lauder Companies Coty Inc. Unilever Brand   What's on this page?
    1. Five cosmetics and beauty stocks to watch                                                       2. How to trade or invest in cosmetic stocks
    3. What you need to know about the cosmetics and beauty industry   Five cosmetics and beauty stocks to watch
    Unilever Kao Corporation Coty Inc. L'Oréal SA Estée Lauder  
    Unilever
    London Stock Exchange (LSE) listed powerhouse Unilever is perhaps not the first name you’d associate with cosmetics. However, in 2017, it created a new company called Unilever Cosmetics International, housing some of the company’s beauty brands, including Tom Ford fragrances and Calvin Klein fragrances and cosmetics.
    Unilever also has under its umbrella the Prestige Group, a subdivision for other higher-end cosmetics brands, including Dermologica, Living Proof and Kate Somerville. It also owns Dove, Axe and Brut, making the company a force to be reckoned with in the fragrance space as well.
    During the first quarter (Q1) of 2021, the company’s beauty products category grew by 2.3% and, interestingly, the Prestige Group showed strong sales as the self-care trend swept a self-isolating globe. This was on top of Unilever already reaching its pre-pandemic sales growth figures by the first week of February, weeks before the end of Q1 2021.1
    Unilever has also announced that it aims to increase future profits by spending over €1 billion in various strategies, such as the very on-trend expansion of its cruelty-free, plant-based beauty products.
     
    Trade Unilever
    Kao Corporation
    Japanese company Kao Corporation is one of the biggest beauty and cosmetics players in the world, owning well-known brands such as Kanebo, Bioré, John Frieda, Molton Brown and more. Much like Unilever, the business is well known for its bullish acquisition of cosmetics brands. However, Kao is even more storied, tracing its roots all the way back to 1887.
    With its mighty market cap of over ¥29 billion, Kao outstrips even Unilever in size. This didn’t shield the company from having a rocky 2020 though, with revenues of its cosmetics business dropping over 22% compared with financial year 2019 (FY2019).2 The company also has a sizable Kao Salons division, which also suffered in the wake of the year’s quarantines. However, Kao’s many other businesses, especially those producing hand sanitisers and home cleaning items, bolstered its performance.
    Kao Corporation has said it’s putting a significant investment into its cosmetics business, despite 2020 losses, and in particular is overhauling its ‘digital offering’. This is to make a compelling new e-commerce functionality available – a move sure to be greeted with enthusiasm by an increasingly online shopping world.
    Another thing that bodes well for Kao is its often pioneering social conscience, with its zero carbon dioxide (CO2) emissions by 2040 plan and being one of the world’s most ethical companies for the fifteenth year in a row.2 Research has shown this to be vital for the very influential Generation Z consumers, a fact Kao seems well placed to benefit from.
     
    Trade Kao Corporation
    Coty Inc.
    American fragrance, hair and cosmetics conglomerate Coty Inc. is home to a number of brands, famous for owning Kylie Cosmetics, Rimmel, Wella, CoverGirl, Clairol, Max Factor and more.
    Coty’s recent results show a disruption from Covid-19, due to the decreased use of cosmetics and fragrances with the prevalence of self-isolation. Its latest results show an overall decrease in revenues of 3.3%, including a mass net decrease in sales of 14.3%. However, the company’s e-commerce business and Asia sales rose over 30%, plus prestige brands showed a 6.5% increase in revenue.3
    Partially, this was due to the company owning the license for Burberry fragrances and cosmetics. While Burberry’s fashion line took a predictable beating from the pandemic, its 2021 Q1 results showed the company’s beauty sales, under the division of ‘children’s, beauty and other’, reported an increase from £127 million in 2019 to £144 million in 2020.4
    Coty has also said that it expects to end the summer with net revenues somewhere between $4.5 billion and $4.6 billion, plans for which include a high-profile relaunch of Kylie Cosmetics.
     
    Source: IG charts Trade Coty Inc
    L'Oréal SA
    L'Oréal is a name that needs no introduction, the French cosmetics and hair care giant is more than a 110 years old.
    The beauty brand showed its staying power in its latest results, going from a 4% drop in overall sales figures in 2020's Q1 to a 10.2% increase in 2021's Q1, mostly from skincare lines like Lancôme and Kiehl’s. However, most impressive in these results is a glamorous 47% increase in e-commerce sales over the same period, , as digital shopping becomes increasingly popular.5
    The company seems keen to keep this momentum going, with recent releases announcing new eco-refill packaging. There are also plans to capitalise on its 2018 acquisition of the beauty and fragrance arm of fashion house Valentino, with a roll-out of new Valentino stores in the US. L'Oréal seems well placed to continue to give its shareholders dividends.
     
    Trade L'Oréal SA
    The Estée Lauder Companies Inc
    One of the oldest and largest US beauty brands, The Estée Lauder Companies Inc owns many of the world’s most famous cosmetics and fragrance names, from Clinique to Tommy Hilfiger, Jo Malone, Bobbi Brown, La Mer and, of course, the eponymous Estée Lauder.
    The company’s latest results of 2021's quarter three (Q3) showed a profit of $456 million, compared with a net loss of $6 million in the same quarter in 2020. This was largely due to an increase in sales for Estée Lauder, La Mer, Jo Malone London, Clinique, and Tom Ford cosmetics, as well as double-digit growth for these in Asia specifically. Both earnings and sales figures were ahead of analysts’ expectations and forecasts were rosy. The company forecasted a net sales increase of 11% to 12% for 2021.6 Reported diluted net earnings per common share are also projected to be $5.48, approximately.
     
    Trade Estée Lauder Companies
    How to trade or invest in cosmetics stocks
    Research which beauty and cosmetics stocks you want to trade Carry out analysis on that stock – both technical and fundamental Practise your trading strategy with an IG demo account, or create a live account and start trading cosmetics stocks on our award-winning platform7 You can invest in US stocks commission free and UK stocks from as little as £3 with our share dealing service,8 or trade on their prices using spread bets or CFDs.
     
    What you need to know about the cosmetics and beauty industry
    Cosmetics stocks is a broad term for companies selling makeup, toiletries, hair products, perfumes and even feminine hygiene products. It’s a huge industry, estimated to be worth over $500 billion globally.
    Cosmetics is a small pond, with the vast majority of brands all belonging to a handful of ‘parent companies’. These include The Estée Lauder Companies, L’Oréal and Coty.
    Cosmetics stocks have had a mixed bag in 2020 and 2021, with some performing well while others were disrupted by the pandemic. Traditionally, cosmetics stocks are governed by the so-called ‘lipstick index’. This means that, in tough economic climates, certain luxury items such as lipstick will do well as people ‘treat’ themselves with smaller items, while cutting back on larger splurges like holidays. The pandemic certainly caused a dip in lipstick sales, as surgical and cloth masks became the norm, but caused strong growth in other cosmetics such as eye makeup and skincare.
     
    Best cosmetics and beauty stocks summed up
    Some beauty stocks have suffered during the pandemic, including makeup brands and salons. Others, like self-care stocks, luxury skincare and hair care, have flourished in the stay-at-home environment Many beauty stocks have recovered from the disruption of the Covid-19 pandemic and are reporting, or forecasting, a rise in profits during 2021 so far The big parent companies of the beauty stocks world look well placed to make good revenues (and returns for investors) for 2021 and 2022 You can invest in cosmetics stocks with our share dealing service, or speculate on their prices using spread bets or CFDs  
    Sources
    1 Reuters, 2021
    2 Kao Corporation, 2021
    3 Burberry Group, 2021
    4 Beauty Packaging, 2021
    5 L'Oréal SA, 2021
    6 Yahoo Finance, 2021
    Footnotes
    7 Awarded ‘best finance app’ and ‘best multi-platform provider’ at the ADVFN International Financial Awards 2020
    8 Deal three or more times in the previous month to qualify for our best commission rates.
    Katya Stead | Financial Writer, Johannesburg
    02 August 2021
  9. ArvinIG
    The FTSE 100 is up over 8% this year, and has almost recovered from the pandemic-induced mini-crash of March 2020. However, the Omicron variant is causing uncertainty over the index's direction next year.

    Source: Bloomberg   Indices Shares FTSE 100 Investor Price Stock   On 11 November, the entire FTSE 100 was worth 7,384 points, up 12.3% since the start of the year. But over the past month, the index has slipped to 7,122 points, as fears over the Omicron variant and potential interest rate rises have hit investors' nerves.
    Last year, the FTSE 100 collapsed 30% in the space of a month, from 7,404 points on 21 February, to 5,191 points on 20 March. Having now recovered much of this ground, investors now want to know where the index will go heading into an uncertain 2022.
    Some investors will continue to follow a FTSE 100 tracker fund. Warren Buffet is a great proponent of index investing, saying in this year’s Berkshire Hathaway meeting that ‘here’s a great argument for index funds.’ And plenty of investors who pick individual stocks do worse than the index average.
    But the situation right now is special. Either the Omicron variant sends the UK back into a healthcare crisis, or the economic recovery continues apace. And the outlook for individual FTSE 100 stocks is very different in these two scenarios, which is likely to tempt investors to try to beat the market.
    Of course, having risen so quickly over the past year, the index may simply reverse to the mean. 2022 could even be a year of relative stability.
    FTSE 100 boom stocks
    Travel stocks Rolls-Royce and IAG (British Airways and Iberia owner) are two strong candidates to boom if the economic recovery strengthens. At 132p, IAG is 71% below its pre-pandemic share price of 457p it was worth on 17 January 2020, while Rolls-Royce at 125p, is 89% below its 5-year high of 1,088p. And IAG is expecting a €3 billion loss this year, while Rolls-Royce is continuing with a £2 billion disposal program. Meanwhile, the Business Travel Association has described the requirement for expensive pre-departure PCR testing as a ‘hammer blow’ to the industry. But if restrictions are loosened soon, pent up demand for international travel could see both rocket in the new year.
    Lloyds could also boom if the economic recovery strengthens. It recently posted a £2 billion Q3 profit, almost double compared to the same quarter last year. A continued recovery should come with increased inflation, so the Bank of England will be more likely to raise the base interest rate. As the UK’s largest mortgage lender, its profits would soar on increased mortgage payments. And a rate rise would increase its profits more sharply than its competitors, as it has no international operations.
    Of course, rates may take some time to rise. MPC member Michael Saunders said on Friday that there are ‘particular advantages in waiting to see more evidence on (Omicron’s) possible effects on public health outcomes and hence on the economy… continued delay also could be costly.’
    The fates of both Persimmon and Rightmove are also tied to the housing market. Persimmon delivered 10% more completions in 2021 than in 2020 and is currently paying out an 8.9% dividend yield. With the housing market red-hot, a small interest rate rise is unlikely to dent demand for the housebuilder’s property. Rightmove is the UK’s largest property portal and has extremely low operating costs due to its online nature. And at 738p, it’s up 18.8% in the past year.
    Hospitality stocks Compass Group, Whitbread, and Diageo are also stocks to watch. All three are significantly below their pre-pandemic highs, as demand for hotels, catering and alcohol is tied up with consumer confidence. But if the UK turns a corner over the winter, a hospitality resurgence becomes likely.
    Then there’s oil stocks BP and Shell. Both are recording record profits as the price of oil and gas continues to hit multi-year highs. For climate-conscious investors, they’re also investing heavily in green energy. Brent Crude is predicted to rise even further in 2022, which will deliver even more profits for shareholders — but oil prices can be unpredictable, in 2020, even hitting negative territory, as demand slumped in lockdown. And this could happen again

    Source: Bloomberg FTSE 100 defensive stocks
    Of course, there’s a pessimistic possibility that the pandemic is about to get worse. If the Omicron variant can evade the protection afforded by the vaccine roll-out to a sufficient degree, then very different FTSE 100 sectors will benefit.
    Healthcare stocks Reckitt Benckiser and AstraZeneca are two good examples. Reckitt Benckiser’s share price is up 2.5% in the past month, as demand for its Nurofen and Strepsils brands rises over the winter. Meanwhile, as the manufacturer of the UK’s home-grown vaccine effort, AstraZeneca’s share price would likely rise on international orders of vaccine booster jabs.
    Tesco is also a stock to watch if the pandemic surges. At 280p, its share price has soared 30% since March. And with a 27% market share, it’s the UK’s grocery market leader. The lockdown era saw its online offering soar, and a return to lockdowns could see revenues rise strongly again. Moreover, the supermarket giant is also a potential private equity buyout target after Morrisons was snapped up earlier this year.
    Vodafone and BT are also stocks to watch in a downturn. Vodafone is already seeking to profit from the EU’s €750 billion recovery fund and is seeing strong growth of its M-PESA Fintech venture in Africa. Meanwhile, BT has just signed on experienced new Chairman Adam Crozier, and the reintroduction of dividends and expansion of its Openreach network could both send the stock higher next year.
    Mining stocks have also historically done well during economic downturns. While the likes of Rio Tinto, Evraz, and Anglo American might all be smart choices, one to watch is Glencore, due to having one foot in oil and the other in the mining industry. Gold and silver miner Polymetal International is also a stock to watch. While its share price is down 26% year-to-date, this is largely down to the falling gold spot price. In recessions, demand for gold and silver rises, and Polymetal’s share price could rise with it. Of course, if the economy rebounds, demand for precious metals will continue to fall.
    Finally, British American Tobacco is also a popular choice as a defensive stock. It’s been one of the highest yielding stocks on the FTSE 100 for years, as the addictive nature of nicotine means that demand for its products stays stable regardless of the economic situation. While tobacco use is falling globally, it owns six out of 10 most valuable tobacco brands. Of course, there’s an ethical factor when it comes to investing, and some may be uncomfortable including the stock in their portfolios.
    Whether there’s a boom, a crash, or a period of calm in 2022, there will be winners and losers. Omicron or another variable could blow the FTSE 100 off course in 2022. Or the recovery could strengthen significantly. But wherever clients decide to put their money, there’s plenty of choices at IG.
    Trade what you want, when you want with the UK’s No.1 trading provider.* We have over 80 top global indices with more trading hours than anyone else. Find out more about indices trading or open an account to trade now.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    06 December 2021
  10. ArvinIG
    Uranium is unloved due to its affiliation with nuclear disasters. But with its spot price surging amid political unrest in global supply leader Kazakhstan, some uranium stocks could soar.

    Source: Bloomberg   Shares Commodities Uranium Nuclear power Nuclear reactor Kazakhstan   Uranium has historically been an unpopular commodity amongst investors compared to alternatives such as gold, platinum or silver. And it’s not hard to see why. Due to its radioactive nature, it’s impossible to buy the material directly and take physical possession. And many appreciate the safety of physically owning their commodities.
    But the true source of its unpopularity is its close association with nuclear energy, and the destruction wrought since the closing days of the Second World War. In Japan, Hiroshima, Nagasaki, and Fukushima continue to breed distrust of the energy source. Japan’s nuclear power usage has fallen from 30% prior to the meltdown to around 7.5% today. But it’s still planning to increase it to 20% by 2030. And this speaks volumes about the future of nuclear energy.
    And North of Ukrainian capital Kyiv lies the 1,000 square mile Chernobyl nuclear exclusion zone. Like Fukushima, its nuclear reactor meltdown saw a terrible loss of human life. It also cost an estimated $68 billion to contain.
    Together these disasters changed the way the world viewed the safety of nuclear power. Germany plans to shut down all nuclear reactors by the end of this year. And Australia, which has the largest uranium reserves in the world, has a complete ban on nuclear power stations.
    Best uranium stocks: a changing world
    But fossil fuels will run out by 2060. Difficult decisions around the future of energy will need to be made soon. According to the US International Energy Agency, global energy demand has trebled between 1980 and 2018, and electricity demand is rising faster than renewables can keep up.
    Moreover, in the wake of the COP 26 climate change summit, governments and corporations are pursuing net-zero targets within the next few decades. In August, the Intergovernmental Panel on Climate Change published a report which concluded that it had ‘high confidence’ that human activity is partially responsible for recent environmental disasters, including the European flooding in July last year and the US’s Hurricane Ida.
    One way or another, the world will move on from fossil fuels. And nuclear energy will form part of the answer. Unlike solar or wind, it provides a consistent stream of energy, already meeting 10% of global electricity needs. 70.6% of France’s energy is nuclear-powered. In the UK, it’s 20%. And engineering jewel Rolls-Royce is developing Small Modular Reactors that are significantly cheaper than the ones due to retire in 2026.
    Even China, which accounts for 36% of global greenhouse emissions, has put aside $440 billion to transition to clean energy by 2060. It’s planning to build 150 new nuclear reactors over the next 15 years, with only 440 currently in use worldwide.

    Source: Bloomberg Political unrest in Kazakhstan
    After Fukushima, distrust of nuclear power saw global demand for uranium slump. At the same time, former Soviet satellite Kazakhstan significantly increased production, making it impossible for other suppliers to cut supply to support prices. The country’s state-owned Kazatomprom produced 10% of the world’s uranium at its price peak in 2007, but this has since increased to 43% as of 2019. The depressed spot price saw hundreds of its global competitors become unprofitable. And nowadays, 85% of all uranium is mined by just 10 companies.
    But supply and demand can change with the wind. Brent Crude hit a record low in 2020, as lockdowns saw global demand for oil collapse. But the inevitable eventually happened. When the world’s economies reopened, oil demand soared while supply from production remained muted. And Brent Crude soared to record highs.
    The same may now be happening for uranium, after days of political unrest has shocked the gigantic central Asian country. While it produces 1.6 million barrels of oil every day, the average annual income sits at about £2,500 a year. And the Western Europe-sized nation has a population of just 18 million people, the same as London and the South East.
    Public protects are illegal without a government permit and previous strikes have been dealt with extremely harshly. But on 2 January, demonstrations began in oil hub Zhanaozen, site of deadly police clashes a decade ago. Protests have now spread across the country, as the government price cap on liquefied petroleum gas was lifted, doubling the price overnight. Many Kazakhs use the gas in place of conventional car fuel for its cheaper price. While the cap has now been reimposed, some of the anger was also directed at former long-time President Nursultan Nazarbayev, who has now been removed from his position as head of the country’s Security Council.
    Current President Kassym-Jomart Tokayev said ‘20,000 bandits’ had attacked cultural hub Almaty and he had told security forces to ‘fire without warning.’ Curfews are in place and mass gatherings banned. 3,000 rioters have been arrested, some have been killed, and more than 400 people are being treated in hospital.
    Echoing the 2014 Crimean crisis, under the Collective Security Treaty Organization (CSTO), Russian troops have been invited into Kazakhstan under request from Tokayev to help ‘stabilise’ the country. Meanwhile, the US has said it will be monitoring the situation to prevent ‘the seizure of Kazakh institutions.’ This political crisis could see the world’s largest uranium producer cease production overnight.
    Best uranium stocks for 2022
    While uranium isn’t traded on the open market, spot and long-term prices are published by independent market consultants UxC, LLC, and TradeTech. And both were trading for under $15 until 2003.
    But the spot price has been volatile over the years, spiking to $136 in June 2007 and sinking to $18 by 2016. Between May and December last year, it rose 59% from $29 to $46 in just seven months. And the Bank of America expects it to shoot up even further to $60 during the first quarter of this year.
    For those who want to take advantage of this volatility, there are multiple ways to invest in the best uranium stocks.
    The first is to buy stocks in mining companies that focus exclusively on the commodity. Canadian Cameco is the largest by market value but made a net loss of $72 million in recent Q3 results.
    Australian choices include Paladin, which is up 205% over the past year, and Energy Resources of Australia, up 30%. However, while Canada and Australia are reserve leaders behind Kazakhstan, investing in individual stocks focussed on one mineral comes with some risk. Of course, this strategy also offers higher reward.
    A safer choice is to invest FTSE 100 miners Rio Tinto and BHP Group. While both are currently dual-listed in the UK and Australia, BHP is delisting in the UK in 2022. Both are top 10 global uranium producers but also mine multiple other commodities, leaving investors less exposed to uranium price volatility. However, because they don’t focus on uranium exclusively, their share prices can be affected by other factors. Both experienced significant volatility in 2021 as Chinese demand for iron ore prices fell in line with the country’s slumping housing market.
    Finally, there there are companies that invest in uranium companies, as well as Uranium-focussed Exchange Traded Funds (ETFs). For example, Yellowcake offers ‘direct exposure to the spot uranium price without exploration, development, mining or processing risk.’ And it’s up 45% over the past year. Similarly, Geiger Counter, which invests heavily in uranium explorers, is up 96%.
    One popular ETF is Global X Uranium, up 50% over the year, which tracks both miners as well as nuclear production companies, giving investors wider exposure to the entire supply chain. ETFs are often seen as a middle-risk option, as they offer exposure to one mineral across multiple companies. However, initial investors in the ETF in January 2018 made zero returns until the beginning of last year.
    There are advantages and setbacks to every option. However, what’s clear is the best uranium stocks will remain volatile for some time to come.
    How to trade or invest in uranium stocks:
    1. Research the uranium stock you want to trade
    2. Decide whether to trade or invest in shares
    3. Open an account
    4. Take your position

    Charles Archer | Financial Writer, London
    10 January 2022
  11. ArvinIG
    With Pound Sterling weakening against the US Dollar, Bank of England governor Andrew Bailey must risk either an inflationary wage-price spiral or severe recession.

    Source: Bloomberg   Forex Inflation Interest rate Pound sterling Interest Interest rates   Those who remember 1979 may feel a creeping sense of déjà vu trickling down their spines.
    The Iranian Revolution had sparked an oil crisis that had doubled the price of crude oil. The Winter of Discontent saw widespread strikes as worker pay was rapidly outstripped by inflation.
    UK inflation (GBP/USD) had hit a crisis-level 27% in 1975, and despite a bailout from the International Monetary Fund, remained over 20% for much of the 1980s.
    The government had set a 5% pay increase limit while inflation ran into double figures. And Russian soldiers were dying by the thousand in Afghanistan, as the Soviet Union attempted, and failed, to suppress the Afghani Mujahideen equipped with Western weaponry.
    And in an emergency special session of the United Nations General Assembly in early January 1980, 104 of the 152 member states had voted to protest the invasion.
    GBP/USD: Back to the 70s?
    Fast-forward to today. Abandonment of Russian oil has Brent Crude at $107, after reaching a high of $139. Bank of England governor Andrew Bailey has called for ‘wage restraint.’ Most NHS workers are due a 3% pay rise, with UK inflation potentially hitting 10% later this year.
    Russia is again invading a foreign nation to install a puppet government, sacrificing young soldiers to the meat grinder that is NATO weapons.
    And on 2 March, in another emergency special session of the United Nations General Assembly, 141 of 193 member states voted to condemn Russia’s invasion of Ukraine.
    Of course, history is a mirror; it doesn’t repeat itself. There is more than one hugely significant difference between the financial crises inherited by Margaret Thatcher, and the one facing Andrew Bailey today.

    Source: Bloomberg Pound Sterling: interest rate dilemma
    Throughout the 1970s the UK’s base rate remained over 10%, soaring to 17% in November 1979, after Thatcher gained power earlier in the year.
    The then Prime Minister was convinced that high interest rates were necessary to bring inflation under control. The strategy eventually worked but saw unemployment rise to 3 million amidst a severe recession and political polarisation.
    After the central bank’s meeting today, the Monetary Policy Committee (MPC) voted 8-1 to increase the base rate for a third successive time to 0.75%. The Consumer Prices Index inflation rate is 5.5%, with the Bank’s official target at 2%.
    The US Federal Reserve has also increased rates by a quarter-point for the first time since 2018. With inflation running at 7.9%, and the country far less dependent on energy imports than the UK, six more quarter-point increases are planned for 2022.
    But the cost-benefit calculation is different for the UK. The need to control inflationary pressure with interest rate rises must be balanced with easing the escalating cost-of-living crisis. Higher energy bills, housing costs, food prices, and taxes are causing the biggest squeeze on incomes since before Thatcher entered No 10.
    The UK could return to 1970s-style ‘stagflation,’ marked by combined persistent high inflation and high unemployment, causing weak demand. Across the pond, former treasury secretary Larry Summers is predicting both will remain above 5% for years to come.
    But the problem is more acute in the UK, which is more susceptible to the rising global prices of food and energy. Andrew Bailey will have to choose between keeping interest rates low, risking an inflation-inspired wage-price spiral, or raising them further and chancing a severe recession and housing crash.
    The Bank previously predicted an inflationary peak of 7.25% in April, but now believes the peak could be ‘several percentage points’ higher later in the year, especially if the Ofgem price cap increases ‘substantially’ in October.
    And it noted recent developments ‘are likely to accentuate both the peak in inflation and the adverse impact on activity by intensifying the squeeze on household incomes.’ Moreover, it warned ‘global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the UK, is likely to slow.’
    The MPC argues ‘the economy has recently been subject to a succession of very large shocks. Russia’s invasion of Ukraine is another such shock.’
    But interest rates were running around 5% for years before the 2008 financial crisis. In hindsight, persisting with emergency sub-1% rates for 14 years instead of raising rates before the next crisis hit may not have been the most well-thought-out policy.
    Because there’s always a chance that two crises can hit in a row.
    Trade 100+ FX pairs with the UK’s No. 1 retail forex provider.* Enjoy fast execution, low spreads – plus we’ll never fill your order at a worse price. Learn more about our forex trading platform or create an account to start trading today.
    Charles Archer | Financial Writer, London
    18 March 2022
  12. ArvinIG
    Although China’s policymakers appear to step in provide economic support through tangible measures, the rapidly deteriorating power crisis and extreme weather continues to complicate and challenge the Chinese economy.

    Source: Bloomberg   Forex Indices Commodities United States dollar USD/CNH China   Asian stocks slid in the final week of August as fears of a sharp rate hike were ignited by Powell’s speech in Jackson Hole last week. Meanwhile, headwinds continue to come in from China as the power crisis and extreme weather challenge the nation's economy despite China's policymakers appearing to step in.
    Hang Seng
    Hong Kong stocks slumped to their lowest level in more than three months last week and apart from the possibility of an aggressive rate hike in the US, investors are also digesting the uninspiring domestic corporate earnings report.
    On Tuesday, Hong Kong-listed and China’s largest Developer Country Garden reported a record 96% profit slump, cementing the view that China’s property crisis is far from reaching the bottom.
    Despite some bright momentum to conclude the last week’s trading session, the downtrend has resumed for the Hang Seng index in the new week. Up to Tuesday, the price has broken a key support level from the 20-day moving average of 19594, with the potential to retest the three-month low level lying at 19158.
    Hang Seng daily chart

    Source: IG USD/CNH
    The strength of the greenback continues to push the USD/CNH towards its two-year high. On Monday, the price reached as high as 6.9329, a level last seen on August 17, 2020.
    Unsurprisingly, the USD is attracting the spotlight after the hawkish tone signalled by Federal Reserve chair Jerome Powell at Jackson Hole. As stated, the Fed will continue hiking interest rates at an aggressive pace to scale down the inflationary pressures and as a result, it’s not hard to see that the demand for the greenback will keep on an elevated level compared to the risk-perceived currencies.
    In the near term, the strong uptrend could see the USD/CNH pair keep on exploring the territory above the two-year high level. Hence, the 6.94 regions is anticipated to be the imminent target ahead of the 6.98 level recorded on July 2020.
    USD/CNH weekly chart

    Source: IG Gold
    The precious metal gave up all the gains from the past month after taking clues from the greenback’s strong return. On Tuesday, the price of Gold (XAU/USD) consolidated near $1,733, following a failed attempt to retest the 50-day MA. For the near-term view, the previous support line should stay valid to support the price above the $1714 level.
    However, the upcoming US jobs report may spark new inflation concerns to back up Fed Chair Powell’s determination to continue jumbo-sized hikes. The yearly low level at $1702 marked in mid-July is also a critical number to focus on.
    Gold daily chart

    Source: IG
    Hebe Chen | Market Analyst, Melbourne
    31 August 2022
  13. ArvinIG

    Aston Martin shares fall on rights issue

    By ArvinIG,


    Analyst Article
    The luxury car manufacturer launched the fundraising to pay down its debt mountain

    Source: Bloomberg   Shares Aston Martin Debt Car Luxury car Interest   Shares in Aston Martin Lagonda slumped by 16% on Monday to 405p after the company priced its rights issue at a substantial discount.
    The luxury car manufacturer, favoured by James Bond, is launching a four for one rights issue to raise £575.8 million. As such, the company is issuing 559 million shares priced at a 78% discount to last Friday’s closing price.
    Aston Martin rights issue to pay down debt
    Half of the proceeds will be used to deleverage the company, which has £1.3 billion of debt, as well as invest in new car production. Existing investors Yew Tree Consortium and Mercedes Benz participated in the rights issue, which also brings in Saudi Arabian sovereign wealth fund PIF.
    Aston Martin Lagonda told investors that since the Yew Tree Consortium invested in early 2020, the company had made “significant progress to fulfil its vision of becoming the world's most desirable ultra-luxury British performance brand.” It said that the company has also managed to reduce manufacturing costs by 20% per unit and seen a “significant increase in brand awareness, expanding the Group's reach, with 60.5% of customers in the 12 months leading up to June 2022 new to the brand.” The return of Aston Martin to the Formula 1 grid also boosted sales.
    Aston Martin still reeling from Covid-19
    However, management also acknowledged that the Covid-19 pandemic also had “a significant detrimental impact on the business in 2020, which led to a refinancing at the end of that year,” leaving the company with a “significant debt burden and associated interest costs,” which it wished to solve. The effects of the Ukraine war and supply chain issues have also weighed on the company.
    At the half-year results in July, revenues rose by 9% to £541.7 million (from £498.8 million). However, total wholesale volumes fell by 8% to 2,676 units (from 2,901), while losses before tax tripled to £285.4 million from £90.7 million in 2021.
    Nevertheless, trading is expected to pick up for the full-year, with free cash flow forecast to turn positive in the second-half. Management anticipate “significant growth on 2021,” with an estimated 8% increase in unit sales and a 50% improvement in adjusted EBITDA (earnings before interest, tax, depreciation and amortisation), boosted by the Aston Martin Valkyrie and DBX707. Its first electric model is due for release in 2025.
    However, potential flies in the ointment include the Ukraine war, Covid-19 lockdowns in China, raw material price hikes and logistics and supply chain issues. Charles Coldicott, auto sector analyst at Redburn, told the FT the company may also face relegation from the FTSE 250 later this year.
    Shares in the car maker have fallen by 78% this year and currently trade at 434p. The rights issue should solve the debt burden, however even Aston Martin’s customers may not be immune from the cost of living crisis and rampant inflation.
    Piper Terrett | Financial writer, London
    08 September 2022
  14. ArvinIG
    The AstraZeneca share price is rising as the British-Swedish pharmaceutical giant achieves record quarterly and full-year revenue. And innovative cancer treatments could see it strike a new high in 2022.

    Source: Bloomberg   Shares AstraZeneca COVID-19 vaccine Environmental, social and corporate governance Revenue Cancer   AstraZeneca (LON: AZN) shares struck a record high of 9,444p on 11 November, just three months ago. But on 4 February, they had fallen to 8,282p as a combination of inflationary and geopolitical factors caused a wider market dip.
    But AstraZeneca is now back to 8,917p as a synergistic cocktail of excellent results combined with a successful trial of its new cancer drug sets the share price up for a full recovery.
    AstraZeneca share price: Full-year results
    The drug maker’s revenue rose 41% to a record $37.4 billion last year. Almost $4 billion came from its covid-19 pandemic jab, Vaxzevria, after AstraZeneca moved away from not-for-profit pricing last November.
    In Q4 alone, revenue rose 62% to $12 billion, a quarterly record. CEO Pascal Soriot told investors that ‘AstraZeneca continued on its strong growth trajectory in 2021, with industry-leading R&D productivity, five of our medicines crossing new blockbuster thresholds, and the acquisition and integration of Alexion.’
    He also highlighted the ‘broad and equitable access to our COVID-19 vaccine with 2.5 billion doses released for supply around the world.’ And the company ‘saw double-digit growth in all major regions, including Emerging Markets despite some headwinds in China.’
    Accordingly, AstraZeneca has increased its dividend for the first time in a decade to $2.87 and plans to raise it further to $2.90 going forward. And it’s targeting a revenue increase to $40 billion in 2022.
    However, the pharmaceutical giant made an annual loss of $265 million in 2021, compared to its profit of $3.9 billion in 2020. But this was due to its $39 billion acquisition of rare diseases expert Alexion in July 2021, and a 62% increase in research spending to a whopping $9.7 billion.
    And this spending could see dividends rise even further.

    Source: Bloomberg Ethical investing?
    Environmental, Social, and Governance (ESG) investing has become an increasingly important consideration for investors. While a personal judgment call, many hesitate to invest in drugmakers. However, AstraZeneca has several ESG points in its favour right now.
    AstraZeneca has been called the ‘jewel in the crown’ of the UK covid-19 jab campaign. The sobriquet has also been applied to Cambridge-based neighbour Arm; the microchip designer slated for a near-future Initial Public Offering. While worlds apart in terms of business, both share a common factor rare amongst FTSE 100 constituents. They innovate.
    The AstraZeneca jab is the most widely used worldwide outside of China. Soriot has highlighted how the company has ‘delivered 2.6 billion doses of the vaccine and you have saved 1 million lives around the world and of course enabled the economies in many countries to restart.’ And jab co-creator Sir John Bell thinks that misinformation spread by scientists and politicians about the company’s vaccine has ‘probably killed hundreds of thousands of people.’ Potentially even more lives could have been saved.
    And the $4 billion AstraZeneca has derived from covid vaccine sales was dwarfed by the $37 billion generated by Pfizer from its offering. While AstraZeneca has now abandoned its not-for-profit covid approach, it’s still offering tiered pricing for lower-income countries. And it’s developed a new antibody-drug Evusheld, used in emergencies to treat immunocompromised patients who can’t be vaccinated.
    And outside of covid-19, the company’s innovation is saving lives even more lives, having developed 13 ‘blockbuster’ medicines which generate more than $1 billion in sales every year.
    Most recently, phase III trial results for its oncology drug Lynparza demonstrate it could help delay prostate cancer. The second-most common cancer kills 375,000 men annually. In the UK alone, 52,254 are diagnosed every year.
    Executive Vice-President of oncology, Susan Galbraith, believes Lynparza will give patients ‘more time without disease progression while maintaining quality of life.’ For context, while 98% of patients survive ten years after treatment, side effects include erectile dysfunction, infertility, and bladder problems.
    Jefferies analysts believe the potential market value in the US alone could be worth a ‘significant commercial opportunity’ of between £2.2 billion and £3.7 billion. The company’s oncology division already accounts for a third of annual revenue.
    With record-breaking revenue and heavy R&D investment, the AstraZeneca share price could soon hit a new high.
    Trade over 16,000 international shares from zero commission with us, the UK’s No.1 trading provider.* Learn more about trading shares with us, or open an account to get started today.
    *Based on revenue excluding FX (published financial statements, June 2020).
    Charles Archer | Financial Writer, London
    17 February 2022
  15. ArvinIG
    We highlight five things that investors and traders need to know on Monday, 9 August.

    Source: Bloomberg   Forex Indices Commodities United States Australian Securities Exchange ASX   US jobs report reveals improving labour market
    US Non-Farm Payrolls data came in stronger than expected on Friday night. The data revealed a larger than expected gain in employment for the US economy last month, with 938,000 jobs added. The unemployment rate also fell by more than expected, falling from 5.7% to 5.4%. The solid numbers created a splash in markets on Friday, as market participants brought forward their expectations of policy “normalisation” from the US Federal Reserve. The US Dollar spiked higher, while the US 10-Year Treasury yield lifted back above 1.3%.
    Source:TradingEconomics.com ASX 200 edges to fresh records, led by financials
    The Australia 200 has edged to fresh record highs this morning, before pulling back slightly by early afternoon trade. The move has come largely due to a jump in financial stocks, which has benefitted from the lift in global bond yields following Friday’s better than expected US jobs report. The sector also received a boost from Suncorp Group Ltd's results published this morning, with its shares up more than 8% today after the company announced a special dividend and a share buy buck scheme worth approximately $250 million.
    Gold prices plunge in thin Asian trade
    The price of Spot Gold took a spectacular plunge this morning, as the yellow metal extended its post-NFP losses. Price plummeted from around $US1762, where it closed on Friday night, to fetch as low as $US1681, as the combination of a stronger Dollar, higher yields and thin trading conditions in Asian trade today fed bearish sentiment towards the commodity. The drop in the value of gold also impacted the ASX 200 today. The materials sector has been the drag on the index, with gold miners down across the board.

    Source: IG charts Delta-variant continues to weigh on global economic outlook
    Concerns about the Delta variant of the Covid-19 virus continues to weigh on the global economy, with outlook for global growth clouded by uneven vaccination rates across the world. Those fears have been further inflamed recently, with an outbreak of the Delta variant in China raising the prospect of potential lockdowns in the world’s second largest economy as the virus variant renders the country’s vaccination campaign less effective.
    US inflation data to highlight the week’s macro calendar
    It’s relatively light on the economic calendar this week compared to the last fortnight. However, the focus in markets is likely to remain on US fundamentals and the likely path to policy tightening by the US Federal Reserve. US CPI and PPI data will be the key risk events, with market participants watching for clues about whether inflationary pressures in the US economy over recent months are indeed as transitory as Fed officials have implored.
    Do you have a view on the markets? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.
    For example, to buy (long) or sell (short) a variety of local and international stocks using CFDs, follow these easy steps:
    Create an IG Trading Account or log in to your existing account Enter <Company name> in the search bar and select it Choose your position size Click on ‘buy’ or ‘sell’ in the deal ticket Confirm the trade For investors not looking to trade stocks, you can invest in shares directly through our share trading service.
    Kyle Rodda | Market Analyst, Australia
    09 August 2021
  16. ArvinIG
    We highlight five things that investors and traders need to know on Wednesday, 28 July.

    Source: Bloomberg   Forex Indices Shares China Federal Reserve Apple Inc.  
    Wall Street stocks end win streak on China tech jitters
    Wall Street snapped a five-day win streak overnight, after yesterday’s volatility drove a drop in big-tech stocks. US listed Chinese companies plunged, dragging with them the broader tech-space, as the regulatory crackdown from Chinese authorities on its private sector forced portfolio managers to liquidate tech exposure in their portfolios. The US Tech 100 ended the night’s trade 1.21% lower, though the index did finish off the day’s lows, with investors “buying the dip” at its 20-day moving average.

    Source: TradingView Apple, Microsoft and Alphabet post mixed results
    The negativity towards US tech stocks continued after the closing bell, after Apple Inc, Microsoft Corp (All Sessions) and Alphabet Inc - C (All Sessions) delivered its quarterly results. Though all three beat earnings and revenue estimates, only Alphabet shares rallied in post market trade. Apple shares dropped after the company refrained from giving guidance and warned of slowing growth and further supply constraints. While Microsoft shares fell after the company flagged a slowdown in its Azure cloud services business.
    Australian CPI data
    Quarterly CPI dropped in Australian today, and showed a very strong result. Prices were shown to have expanded by 3.8% on annualised basis, exceeding the 3.5% consensus estimate. The reaction in markets was muted however, with the AUD/USD dropping following the data, with market participants seeing the high inflation as mostly due to temporary factors. The stronger inflation pulse is also considered unlikely to influence the Reserve Bank of Australia policy, given the major hit to future growth from the recent lockdowns in New South Wales.

    Source: ABS ASX200
    Nervousness in broader financial markets has put Australian investors on the back foot today, as Wall Street’ weak lead overnight, caused by concerns regarding China’s crackdown on its tech sector, keep investors on their toes. The Australia 200 has pulled back from record highs, in a day’s trade that has seen every sector trade into negative territory, with the IT sector unsurprisingly the market’s biggest underperformer.
    Markets turn attention to US Federal Reserve meeting
    Focus turns in markets now to tomorrow morning’s US Federal Reserve meeting, at which the central bank is tipped to keep policy unchanged. With the policy outcome all but certain, the interest in this meeting is in what the Fed says about its policy settings going forward. After last month’s so called “hawkish pivot”, market participants are looking for clues about the timing of QE-tapering and rate hikes, especially as some concern has developed in recent weeks that the US economy’s expansion could be slowing down.
    Do you have a view on the markets? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.
    For example, to buy (long) or sell (short) a variety of local and international stocks using CFDs, follow these easy steps:
    Create an IG Trading Account or log in to your existing account Enter <Company name> in the search bar and select it Choose your position size Click on ‘buy’ or ‘sell’ in the deal ticket Confirm the trade For investors not looking to trade stocks, you can invest in shares directly through our share trading service.
    Kyle Rodda | Market Analyst, Australia 
    28 July 2021
  17. ArvinIG
    We highlight five things that investors and traders need to know on Wednesday, 4 August.
    Source: Bloomberg   Forex Indices Retail Economy ASX Data   New Zealand jobs data shows a roaring economy
    New Zealand’s employment data was published this morning, and pointed to an economy that continues to run hot. The country’s unemployment rate plunge to 4.0% from 4.6% last quarter, beating by some margin the 4.4% estimate going into the release. The data was the latest bit of evidence of a very robust economic expansion of New Zealand’s economy and provided a little vindication for the Reserve Bank of New Zealand’s move last month to end its quantitative easing program. The markets are betting now on an even shorter path to rate hikes from the central bank, with the NZD/USD jumping above 0.7050 this afternoon as a result.
    Source: IG charts Australian Retail Sales drop as lockdowns hit consumption
    Australian Retail Sales data revealed the impact on consumption of the recent lockdowns across the country, with retail sales for the month declining by 1.8%, as expected. In the data’s accompanying commentary, the Australian Bureau of Statistics outlined the sectors hardest hit by restrictions - cafes, restaurants and takeaway food services -6.0%, clothing, footwear and personal accessory retailing -9.5%, department stores -7%, other retailing -1.6% and household goods retailing -1.3%.
    Oil prices under pressure as demand concerns grow
    The price of ETFS Brent Crude has extended its drop in the last 24 hours, with WTI having fallen by as much as 6.75% from last week’s highs, before retracing some of those losses in Asian trade today. The fall seems to have come off the back of some mounting concerns about the global economy’s outlook, and whether its expansion may have peaked. On top of that, there remains some wariness about the strength of emerging market economies, which are struggling to combat the effects of the spread of the Covid-19 Delta variant.
    Learn more about trading oil.
    ASX 200 pushes back to record highs
    It’s been another record-breaking day for the Australia 200 today, with the index pushing back towards record highs. As had been the case in Wall Street trade in the night prior, it was a rebound in cyclical stocks that underpinned the charge higher, with energy and mining shares outperforming. Coming into the back end of the session, the ASX 200 is wrangling at the 7500 mark, a key psychological level for market participants.
    Source: ASX Focus slowly turns to US labour market data
    The remainder of the week in financial markets will be dominated by speculating about and reacting to the US labour market data. The climax of the trading week will be on Friday night with Non-Farm Payrolls. However, traders will receive their entrée this evening, with the ADP Non-Farm Payrolls numbers. Reflecting the strength also expected out of the official NFPs, the ADP data is tipped to explain how 695,000 jobs were added to the US economy last month.
    Do you have a view on the markets? Whatever you think, you can use CFDs to trade stocks and other assets, through IG’s world-class trading platform.
    For example, to buy (long) or sell (short) a variety of local and international stocks using CFDs, follow these easy steps:
    Create an IG Trading Account or log in to your existing account Enter <Company name> in the search bar and select it Choose your position size Click on ‘buy’ or ‘sell’ in the deal ticket Confirm the trade For investors not looking to trade stocks, you can invest in shares directly through our share trading service.
    Kyle Rodda | Market Analyst, Australia 
    04 August 2021
  18. ArvinIG

    ASX earnings preview: REA, CBA and Telstra

    By ArvinIG,


    Analyst article
    This week Australia’s top companies present their annual result for the previous financial year. Today’s preview focuses on the REA, CBA and Telstra.

    Source: Bloomberg   Indices Shares Telstra Price Technical analysis Australia   The upcoming FY 2022 report is expected to show some level of slowdown as Australian businesses are not immune to the shifting market, rising interest rates and a tight job market.
    REA Group (ASX:REA)
    Earnings date:
    Tuesday, 9 August 2022 at 8.30am (AEST)
    Expectation:
    EPS: $3.11 representing an 27% yearly growth For fiscal years 2022 and 2023, analysts are estimating that the average annual growth will increase to 19.45%. Key watch:
    The REA Group Ltd has delivered a strong result for the first three quarters of the 2022 financial year. In Q3, the group reported a 23% yearly revenue growth driven by Australian residential businesses and the inclusion of Mortgage Choice, with EBITDA up 27%.
    While the fundamentals of the residential property market remain positive, the impact of the rapidly rising interest rate is poised to stay for the next financial year. Hence, investors will presumably interpret the result more as an indicator for the business's next chapter instead of celebrating what has been achieved.
    However, even regarding all the macro headwinds, shareholders still have good reason to be confident in Australia’s top one property platform thanks to its exceptional robust balance sheet and unbeatable market share. The company’s free cash flow is growing at a mouth-watering 68%, and its website traffic is three times more than its rivals despite admitting to a moderate decline recently.

    Source: REA Technical analysis:
    REA’s share price has managed to ride the ascending trendline, bottoming out from the July low over the past four weeks. The decent support by all three major SMA raises the likeliness of a wider bullish trend to send the price back to $130+, the highest level in four months. On the other hand, any potential pullback should see the support near $120 at play.
    REA weekly chart

    Source: IG Commonwealth Bank (ASX: CBA)
    Earnings date:
    Wednesday, 10 August 2022
    Expectation:
    EPS: $5.11, representing a 9.7% YOY growth Revenue: up $9.3 billion Key watch:
    The Commonwealth Bank of Australia is expected to report success, likely carrying on the momentum from the first half of the financial year when the company delivered a jaw-dropping 26% increase in Net profit after tax from the previous year.
    Investors are particularly keen to get a glimpse of how much May and June’s interest rate increases will bolster the banking sector’s earnings. While the brutal rate increase cycle is expected to translate into interest margin for the near term, the likely tail risks also come from stagnant housing loan growth and emerging cost pressure.

    Source: CBA Technical analysis:
    For the year to date, the share price for the CBA has outperformed the board stock market with marginal change (-0.8%) while the ASX 200 has dropped by 10%. The CBA share price has enjoyed a strong rebound from mid-June and has been up by more than 17% since then. Based on the daily chart, the price is attempting to consolidate the position above the $100 threshold with $103 set to be the next destination. On the other hand, the RSI is nearly reaching the overbought territory, suggesting a near-term breath could be on the cards first before moving on to the next challenge.
    CBA daily chart

    Source: IG Telstra
    Earnings date:
    Thursday, 11 August 2022
    Expectation:
    EPS: $0.14, representing an 40% yearly decline Revenue: $21.85 billion, up 4% from last year Key watch:
    Over the past decade, Australia’s leading telecommunications company has been surrounded by headwinds and investors are looking forward to the forthcoming result with optimism that Telstra is ready to move on to the next chapter. The hope not only stems from the welcome of a new CEO after seven years but because the company has recently projected to deliver profit growth.
    Outside of the business’s outlook, as a long-regarded 'defensive stock', Telstra’s dividend yield will be another focus. Telstra is aiming to pay an annual dividend of 16 cents per share which would translate into a fully franked dividend yield of four per cent.
    Technical analysis:
    The share price for Telstra has climbed from the bottom of the year at $3.7 during the past month. The level of $4 is set to be a significant challenge as a notable fail at this level in April triggered two months of selling. Moreover, the gap between $4 to $4.1 has proved to be a key hurdle should the price attempt to return to its level early this year. On the flip side, the price should find solid support from its 20- and 100-days moving average at around 3.95.
    Telstra daily chart

    Source: IG   Hebe Chen | Market Analyst, Melbourne
    08 August 2022
  19. ArvinIG
    The recent lift in Australia’s unemployment rate may allow the RBA to consider slowing down the rising interest rate as early as October.

    Source: Bloomberg   Indices Unemployment ASX Australian Securities Exchange Labour economics Australian Bureau of Statistics   The Australian Bureau of Statistics (ABS) reported Australia’s unemployment rate for August on Thursday, September 15th. The seasonally adjusted unemployment rate rose surprisingly to 3.5 percent in August 2022, higher than the expected 3.4%.
    According to the reading, Australia's strong economy is luring more workers into an extraordinarily tight labour market with full-time employment jumping by 58,800 in August, offsetting a drop of 25,300 in part-time jobs. Seasonally adjusted working hours also increased by 0.8 percent, fully reversing July's decline in hours worked.

    Source: Trading Economics What would be the impact?
    The surprising job data comes as the RBA considers the possibility of another 50 bps hike for October, following the US's hotter-than-expected CPI. Up until September 14th, the market has indicated a 67% expectation of an interest rate increase to 2.85% (another 50bps) at the next RBA Board meeting.

    Source: ASX The RBA has delivered four consecutive 50 bps increases since May, but governor Philip Lowe has recently signalled that the board could ease higher interest rates from October if the economic data supports the pivot.
    Given the unexpected lift in the unemployment rate, suggests the labour market may have reached its total capacity thus allowing this to be possible.
    ASX 200 technical analysis
    The encouraging unemployment print helped to restore confidence in the ASX market after the previous day’s tumble. As shown in the daily chart, the level of 6791 has played as massive support since early September. Therefore, sellers should keep a close eye on this level once breached as that may trigger a new round of selling. On the other hand, buyers should be ready for any bounce from this level to be challenged by the imminent resistance at 6916, where the 20-day MA sits.
    ASX 200 daily chart

    Source: IG

    Hebe Chen | Market Analyst, Melbourne
    16 September 2022
  20. ArvinIG

    ASX200: three stocks to watch

    By ArvinIG,


    Analyst article
    We look at some of the most important stocks traders and investors should watch out for this week.

    Source: Bloomberg   Indices Shares Stock Investor Dividend ASX   The ASX 200 participated in an uplift in global equity markets last week, with the index rising 3.3%. It was a broad-based rally. But beaten-up tech stocks led the charge, with energy and materials stocks pulling back as fears about the impact of the war in Ukraine on global energy and commodity markets cooled.
    The week ahead will remain focused on macroeconomic risk. However, a handful of local news should also drive the market, including several major stocks going ex-dividend after last month’s reporting season.
    Here we look at three stocks to watch in the week ahead.
    Top three ASX stocks to watch
    1. Commonwealth Bank of Australia (CBA)

    Source: IG CBA shares will go ex-dividend on the 22nd of March, as the company pays out the $1.75 dividend it announced out of its earnings last month. Combined with a more favourable market backdrop, investors appear to be buying into the stock ahead of the dividend, with price making fresh YTD highs. The share price has run into some resistance at around $106 right now, which if broken may open a push towards record highs at just above $110. Technical support is around $103.40.
    2. Star Entertainment Group (SGR)

    Source: IG Investors offloaded Star Entertainment Group shares last week as an enquiry into the gaming business in New South Wales probed alleged breaches of anti-money laundering regulation. The fear here is of potentially significant fines, and possibly a loss of its gaming license, like what happened to Crown when it was proven to have engaged in similar misconduct. With momentum skewed to the downside, SGR shares remain in a downtrend with the next major level of resistance around $3.10 per share.
    ZIP Company Limited (Z1P)

    Source: IG The global tech wreck, along with a collapse in buy-now-pay-later stocks locally, has seen Z!P shares fall towards post-pandemic lows with the stock down roughly 80% in the past year. While the company faces headwinds from higher interest rates and potentially weaker profits from increasing bad debts, the technicals point to a looming bounce for the stock. Although in a primary downtrend, the weekly RSI is heavily oversold, and the signal line is suggesting slowing downside momentum. A break of trendline resistance could see buyers drive a reversion in the stock, with the resistance at $2.70 the major level to watch in such an event.
    Follow Kyle Rodda on Twitter @KyleR_IG
      Kyle Rodda | Market Analyst, Australia
    21 March 2022
  21. ArvinIG
    Today, we look at where the four markets are heading: AUD/USD, Nasdaq, Brent Crude Oil and Bitcoin

    Source: Bloomberg   Forex Indices Commodities United States dollar AUD/USD Nasdaq   Risk sentiment returned to the market this week and eased growing concern after the release of strong US retail and industrial data. In Australia, the RBA’s May meeting minutes put the possibility of a 40bps hike on the table for June and China’s plan to ease Shanghai out of its lockdown has supported energy prices in recent sessions.
    AUD/USD
    The concern for a US recession triggered by hotter than expected CPI data last week managed to push the AUD/USD to its lowest point since June 2020. Moreover, the demand for the Aussie dollar has been hit as iron ore prices tumbled, weighing heavily on the AUD as a commodity currency.
    This week the Australian currency was lifted as the RBA’s minutes increased the probability of a 40bps rate rise. The Australian dollar rose to 70.15 and delivered its third consecutive day of gains but was still more than 5% lower than a month ago.
    From a technical standpoint, the rise on Tuesday has helped the AUD/USD break through April's descending trend line while bringing the 20-day moving average around 0.705 into view. Current support sits at 0.6932.

    Source: IG Nasdaq
    U.S. stocks rebounded on Tuesday thanks to retail sales rising 0.9% last month, following a 1.4% surge in March. The data helped ease growing concern about the economic outlook which has lately fuelled pessimistic sentiment. Meanwhile, Federal Reserve chairman Jerome Powell reiterated in a public speech that he will 'keep pushing' to tighten the U.S. monetary policy until it is clear that inflation is in decline.
    Nasdaq led the advance on Wall Street by soaring 2.62%. Technically, the bounce has broken through the April trendline and brought the 20-day MA at around 12722 as a possibility. Looking forward, the line connected by previous lows can be viewed as a key support for the Nasdaq while the March low (12944) should be a key challenge in the near future.

    Source: IG Brent Crude oil
    The concern about supply and demand has pushed up oil prices in recent sessions.
    The ongoing conflict in Ukraine shows no signs of easing and with the expectations of further bans on Russian energy by the EU and US decisively means that a lack of supply will be a long-term norm for crucial energy.
    On the demand side, China recently announced it would bring normality back to 25 million Shanghai residents by mid-June. This wouold offset previous concern for a shrinking demand in oil even if the risk of a future lockdown can’t be ruled out. Brent Crude rallied sharply in the second half of last week and edged above the $110 level. The daily chart shows that the price is now sitting above the 20, 50, and 100 MA, suggesting a bull-biased sentiment is taking the lead.

    Source: IG Bitcoin
    Cryptocurrency has shown signs of stabilizing after a bloodbath last week wiped $200 billion from the market, with the prices of Bitcoin and Ethereum plunging to their lowest level in more than 12 months.
    The selling pressure for Bitcoin has shown some signs of easing this week following optimism resurfacing in the stock market. The short-term bullish idea has pushed the price up from its 18-month low level recorded last week at $25385 and is now back at 30k.
    The four-hour chart shows a clear uptrend for the price to bottom out from the recent low while encountering resistance near 30436. However, the long-term chart (weekly) suggests the price is staying way behind its short, mid and long-term moving averages. In other words, the bear-biased sentiment remains intact.

    Source: IG
    Source: IG Take your position on over 13,000 local and international shares via CFDs or share trading – and trade it all seamlessly from the one account. Learn more about share CFDs or shares trading with us, or open an account to get started today.
    Hebe Chen | Market Analyst, Melbourne
    18 May 2022
  22. ArvinIG
    AUD/JPY has spent 2021 in a wide trading range of 77.90 and 86.26.
    While other central banks around the world have been withdrawing pandemic stimulus measures, both the Reserve Bank of Australia (RBA) and the Bank of Japan (BOJ) have maintained relatively loose policies. This is largely because inflation in both countries is not threatening economic stability.
    The RBA will not meet again until early February and when they do, fourth quarter inflation data will be available. Many parts of the Australian economy re-opened in this quarter and it’s possible that some price pressures might be emerging.
    This could be crucial for AUD/JPY, as Japanese investors have historically had a strong appetite for Australian fixed interest products when Australian yields are rising. The issue for AUD/JPY could be that it may underperform until there is movement from the RBA.
    The Yen maintains a real yield advantage for now, but it is narrowing, and the pace of change could accelerate if the RBA turns hawkish.
    As the Federal Reserve looks to raise rates in 2022, this raises the prospect of G-10 ex-Japan yields across the curve getting a boost. In this environment, the Yen may come under pressure more broadly.
    The approaching Japanese winter may play a role in AUD/JPY as Japan are an energy importer, while Australia is an exporter of energy commodities. The RBA’s commodity index highlights the positive impact that surging energy prices is having on the Australian terms of trade. The increase in liquefied natural gas (LNG) and coal prices have more than compensated for the downturn in iron ore prices.
    AUD/JPY TECHNICAL ANALYSIS
    AUD/JPY tested the September low of 78.846 but the move was rejected. The 2021 low of 77.897 made in August remains intact.
    Previous highs and pivot points may offer resistance above. While on the downside, previous lows and pivot points could provide support.
    DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
    DISCLOSURES

    Daniel McCarthy , Strategist, DailyFX
    7 January 2022
  23. ArvinIG
    Australian dollar falls against US dollar as markets shift to risk-off; the 2022 BRICS Summit set to kick off today in virtual format and AUD/USD looks set for further weakness above key trendline support.

    Source: Bloomberg   Forex Australian dollar United States dollar AUD/USD Inflation Japanese yen   Friday’s Asia-Pacific outlook
    Asia-Pacific markets are set to open higher after a rosy overnight session on Wall Street. The New York trading session saw risk assets climb, with all three major US equity indexes posting gains. The high-beta Nasdaq-100 Index (NDX) outperformed, closing 1.47% higher. Bitcoin prices rose more than 3%, in line with the positive market sentiment. Traders were unswayed by negative economic data, with S&P Global PMI data for the US in June missing estimates, although remaining in expansion territory.
    Activity in the foreign exchange market, however, did not align with what equity markets were communicating. The US dollar, which typically strengthens amid risk-off moves, gained against its risk-sensitive peers, like the Australian dollar. Greenback strength appeared after Treasury sellers vanished mid-day, pushing yields modestly higher.
    The Japanese yen may see some volatility today on the release of Japan’s inflation data for May. Analysts expect to see core inflation—a measure that removes volatile food and energy prices—cross the wires at 2.1%, according to a Bloomberg survey. The Japanese yen is near its weakest level against the dollar since 2002. A higher-than-expected inflation print may help underpin JPY strength, but the Bank of Japan has remained defiant against tightening policy despite the monumental collapse in its currency.
    Elsewhere, industrial and precious metal prices fell. The growing threat of a global recession sent copper prices over 5% lower in New York. Chinese-sensitive iron ore prices managed to gain on comments from President Xi. The Chinese leader reaffirmed his commitment to support economic growth at the 2022 BRICS summit. The Australian dollar remains weak despite the rebound in iron ore, but traders may take notice today and put a bid on the Australian currency.
    Notable events for June 24:
    Singapore – Industrial Production (May) Taiwan – M2 Money Supply (May) China – Current Account Final (Q1) Australia – RBA Governor Lowe Speech
    AUD/USD technical forecast
    AUD/USD found support from a trendline formed from the October 2021 swing high. That trendline may continue to underpin prices, but a break lower would likely lead to a test of the May swing low. The psychologically important 0.7000 level remains a visible target for bulls, should prices rebound. Meanwhile, the MACD and RSI oscillators remain negative.
    AUD/USD daily chart

    Source: TradingView

    Thomas Westwater | Analyst, DailyFX, New York City
    24 June 2022 This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  24. ArvinIG
    Australian dollar falls versus US dollar as markets prep for Fed action; natural gas markets see volatility surge after US terminal incident and AUD/USD approaches critical point of resistance near May low.

    Source: Bloomberg   Forex Commodities United States AUD/USD United States dollar Australia   Wednesday’s Asia-Pacific outlook
    The Australian dollar tumbled again versus the US dollar overnight as Federal Reserve rate hike bets for a 75-basis-point move solidified. Feds funds futures and overnight index swaps are showing nearly a 100% chance that the jumbo rate hike to occur tonight when the FOMC announcement is due to cross the wires. The aggressive action would likely increase the chance for a global recession, which was perhaps the main driver of risk aversion.
    Australia’s Westpac consumer confidence index for June is due out this morning, which may provide a catalyst to halting the Aussie dollar’s fall. A move lower from May’s 90.4 print may spur additional weakness, however. Thursday’s employment data will provide the biggest risk driver for the Australian dollar later this week. Analysts expect to see 25k jobs added in May, according to a Bloomberg survey. Last night, Reserve Bank of Australia Governor Philip Lowe signaled the need for additional rate hikes to bring inflation down.
    The US dollar continues to reign supreme over its major peers despite an increasingly hawkish tone across global central banks. As recession odds increase, so does the demand for safe havens like the US dollar. There is a chance for a relief rally in risk-sensitive currencies, however, given the Greenback’s unabated ascent over the past several weeks. The FOMC may provide a trigger for that move if Mr. Powell’s statement comes off less hawkish than markets expect.
    Oil prices are moving lower into early Asia-Pacific trading, weighed down by recessionary fears and the recent revival of strict Covid-19 restrictions across Chinese cities. European natural gas prices spiked this morning, while US prices fell on news that a liquefied natural gas (LNF) terminal in Texas will be offline for months following an incident at the facility. That will reduce US capacity to export natural gas.
    AUD/USD technical forecast
    AUD/USD prices fell to the lowest levels traded at since May 12. A trendline from the October 2021 swing high may underpin prices for now, but a drop below that level could see prices take out the May swing low. MACD and RSI are both tracking below their respective midpoints.
    AUD/USD daily chart

    Source: TradingView Thomas Westwater | Analyst, DailyFX, New York City
    15 June 2022

    This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
  25. ArvinIG
    AUD rises vs USD after oil prices surge on pipeline problems; March PMI data shows Australia’s economic recovery is strengthening and AUD/USD eyes potential Golden Cross in the works after bullish action.

    Source: Bloomberg   Forex Commodities United States dollar Australian dollar AUD/USD Petroleum   Thursday’s Asia-Pacific outlook
    Asia-Pacific markets may fall today after market sentiment soured overnight on Wall Street. The Dow Jones Industrial Average (DJIA) fell 1.29% in New York. A sharp increase in WTI crude and Brent crude oil prices sparked concerns over economic growth as the conflict in Ukraine intensifies. The US dollar DXY index gained, mostly on euro weakness. However, the commodity-linked Australian dollar managed to climb higher.
    The rise in oil prices is attributable to a Russian oil pipeline to the Black Sea. Russia says that repairs on the damaged pipeline may take 1 million barrels per day off the market. Chevron, a US oil company that owns a stake in the pipeline, cited difficulties in sourcing materials to make the necessary repairs due to the market situation. Russia says that it may take months to complete those repairs. Oil-linked currencies like the Brazilian real and the Canadian dollar benefitted from the underlying move.
    It wasn’t just oil that rallied overnight, however. Copper, aluminum and nickel gained despite the stronger US dollar. That helped push inflation expectations higher, with the two-year US breakeven rate rising to nearly 5%. That helped push gold and silver prices higher. USD/JPY also managed to record another daily gain. The Yen is at its weakest point versus the US dollar since February 2016, and many analysts believe the Japanese currency may fall further as the Bank of Japan stays dovish versus an increasingly hawkish Federal Reserve.
    Along with rising commodity prices, the Australian dollar may benefit from this morning’s economic data. The March purchasing managers’ index (PMI) rose to 57.3 from 57.0, and the services component rose to 57.9 from 57.4, according to Markit Economics. The Australian economy appears to be off to a strong recovery as the country progresses away from Covid lockdowns that were in effect for the majority of 2021. The rest of today’s APAC session is rather light, with PMI data out of Japan due out at 00:30 GMT.
    AUD/USD technical forecast
    AUD/USD looks set to challenge the October 2021 high in the near term after prices pushed into fresh 2022 highs overnight. The Relative Strength Index (RSI) and MACD oscillators signal strong momentum, along with the rising 50-day Simple Moving Average (SMA). That SMA is on track to cross above the 200-day SMA following the past week of bullish price action. That would generate a high-profile bull signal should the SMA crossover occur, commonly referred to as a Golden Cross.
    AUD/USD daily chart

    Source: TradingView Follow Thomas Westwater on Twitter @FxWestwater
    This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products.

    The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
    Thomas Westwater | Analyst, DailyFX, New York City
    24 March 2022

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