The ASX is higher today as consumer stocks and coal miners gather steam.
The consumer sector was up 1.6% as the best performer on the S&P/ASX 200 index. Coles Group Ltd and Woolworths were beneficiaries up 2.6% and 2.1% respectively as Goldman Sachs (NYSE:GS) reiterated its "buy" recommendation for Woolworths, adding it to its Convictions List.
Gains in the sector come as the Australian Bureau of Statistics reported household spending throughout the month of May jumped 7.9% from a year ago.
The benchmark S&P/ASX200 is up just 0.60 points today to 6,607.30. Over the last five days, the index has lost 0.40% and 9.96% over the last 52 weeks.
Top-performing stocks in this index are Eagers Automotive Ltd up 5.00% and Skycity Entertainment Group Ltd up 3.31%.
Eagers lifted on a profit upgrade and said it expected net profit before tax to come in at $246 million for the six months to June 30, exceeding its May guidance range of between $225 million and $240 million.
"The improved outlook for the half-year is despite continuing supply constraints on new car delivers and reflects the strength of our ongoing business," the group told investors.
In the news
Consumer stocks up, but confidence down
According to the ANZ and Roy Morgan Consumer Confidence survey, Consumer confidence dropped 2.5% last week as households came to grips with rising interest rates and cost of living pressure driven by inflation.
Confidence in NSW, Victoria and Queensland fell sharply while modest declines were experienced in Western Australia and increased in South Australia.
ANZ senior economist Felicity Emmett blamed the sharp interest rate rise for much of the drop.
"This continues the trend in place since late April when the high March quarter inflation report brought forward rate hike expectations," Emmett said.
"Since then, confidence amongst mortgage holders has fallen 25%, while confidence for renters is down just 4%. Inflation expectations lifted as petrol prices hover near record highs."
The China energy syndrome
US Energy Secretary Jennifer Granholm has accused China of putting global energy security at risk, while Fortescue boss Andrew Forrest, a big supporter of China, says Australia needs to diversify away from China if it wants to develop a green economy.
Australia and the US are seen as vulnerable to China dominating the $US23 trillion global market for clean energy.
"I worry that China has big-footed a lot of the technology and supply chains that could end up making us vulnerable if we don’t develop our own supply chains," Granholm said at the Sydney Energy Forum.
"From an energy security point of view, it is imperative that nations that share the same values develop our own supply chains not just for the climate – which is very important – but for our own energy security."
China has 80% of the solar supply chain globally, which, according to the International Energy Agency, is likely to go as high as 95% by 2025.
In response, US President Joe Biden has invoked the Defense Production Act which will see the production of lithium and other critical minerals for electric vehicles raised.
"We’ve seen what happens when you rely too much on one entity for a source of fuel and we don’t want that to happen here. We need to diversify those energy sources and link up with partners as part of our energy security.”
Australia’s Energy Minister Chris Bowen joined in the chorus.
"I agree with the secretary. It’s good for our own economies and it’s good for our national security. To have supply chains among ourselves but also amongst friends and allies.”
Forrest said, "China was able to revolutionise the manufacturing of solar panels and we all sat on our laurels and said okay we'll just get them from there.
"However, as the demand for green energy has literally multiplied 100-fold, it's not practical to get these essential items like solar panels from only one nation.
"Australia really must step up and manufacture its own batteries, wind towers and panels and electrolysers. We can do that as Aussies and we've got to do it."
While Fortescue has benefitted from China’s support for its iron ore to the tune of $52 billion, Forrest said the country needed to manufacture its own products.
"I don't think any country can hold Australia hostage because we're the customer, the customer is gold and the customer is always right. We're the country that can build huge power stations all from green molecules, all from the sun and the wind, and we'll get our parts from whoever we please.
"I'm grateful to have other nations there but I don't need government policy, I need Australians to embrace it."
Here’s a look at five of today’s top small-cap stories.
Synertec Corporation advances to remote site commissioning of its unique renewable energy solution
Synertec Corporation Ltd (ASX:SOP) and Santos Ltd (ASX:STO) have progressed from MOU to commercial agreement for delivery of the Powerhouse prototype system. SOP finished 6.25% higher today.
Meeka Metals hits up to 20 metres at 4.53 g/t gold as Turnberry's Western Flank shines brighter
Meeka Metals Ltd (ASX:MEK) has intersected more broad zones of shallow, high-grade gold from drilling targeting the Western Flank of Turnberry Central at the Murchison Gold Project in Western Australia.
Evolution Energy Minerals tests on Chilalo’s graphite deliver industry-leading purity level of 99.9995%
Evolution Energy Minerals Ltd (ASX:EV1) tests confirm that purified Chilalo graphite is a premium precursor material to producing spherical graphite for battery anode applications and nuclear-grade graphite, which sells for about US$30,000 per tonne.
Okapi Resources increases uranium resource estimate after completing latest acquisition
The mineral resource for Okapi Resources Ltd (ASX:OKR)'s Tallahassee Uranium Project now stands at 42 million tonnes at 540ppm for 49.8 million pounds of U3O8. This represents an 81% increase in the size and a 10% increase in the grade of the existing JORC (2012) mineral resource.
Creso Pharma secures LOI to commercialise anibidiol® products targeting pet health in South Korea
The LOI represents an international expansion opportunity for Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF), providing access to the growing domestic pet market in South Korea. In 2020, the country had an estimated 5.2 million dogs and 2.3 million cats registered as domestic pets.
On your six
Despite the ups and downs of cryptocurrencies this year, somehow there’s still interest from managed funds and venture capitalists.
The Crypto Weekly: Bitcoin steady as VCs hunt for crypto opportunities and Reddit launches NFTs
Bitcoin remains resilient, Ethereum’s ‘Merge’ is nearing, VC interest continues to grow and Reddit is launching NFTs.
The one for good luck
Valor Resources’ historical data reveals high-grade uranium
Valor Resources Ltd (ASX:VAL)’s executive chairman George Bauk speaks with Proactive’s Elisha Newell about the historical data which has revealed high-grade uranium up to 4.37% at Surprise Creek in Canada.