The ASX was higher again today with gains in technology offsetting falls in energy.
Despite the energy dip, coal stocks were up 2.1% in the middle of the day, as the coal spot price lifted by 2.9% to $US396 – the highest level since Russia invaded Ukraine in early March. The price of a tonne of coal is nearly four times higher since the start of the year.
Coal has been the beneficiary of European energy crisis fears, with several companies turning back to the commodity after swearing off it.
According to US energy expert Daniel Yergin, the situation will continue to deteriorate as a supply crunch intensifies.
"I think the next few months could get far worse. It could be more difficult, partly because markets are so tight," Yergin, a vice chairman at S&P Global, told the Sydney Energy Forum.
"It's also because Vladimir Putin laid out a strategy last month at the St Petersburg Economic Forum, which is creating economic hardship in Europe, with shortages of natural gas leading to social unrest, bringing populist parties to power and changing the elites. I think that's a factor that other energy crises have not had to face."
As for the benchmark S&P/ASX200, it gained 15.30 points or 0.23% to 6,621.60. Over the last five days, the index has gained 0.41% but is down 11.05% for the last year to date.
The top-performing stocks in this index were Megaport Ltd (ASX:MP1) up 6.99% and Pilbara Minerals Ltd (ASX:PLS) up 5.36%.
In the news today
Work from home
COVID cases and hospitalisations continue to rise as we enter the dead of winter, prompting Health Minister Mark Butler to urge employers to reimplement work from home orders.
“Given the increase in case numbers that we’re expecting over the coming weeks, employers should review their existing work arrangements.”
Case numbers are expected to rise to levels not seen since January.
"What I think we are going to see is hospitalised case numbers approaching what we saw in January, which was about 5,500 people across the country in hospital.
"Already right now it’s well over 4,000, and that number has increased markedly over the last fortnight or three weeks.
"The big difference I think you will see between January and this wave is we expect the number of people who will have to be admitted to intensive care to be substantially lower this time."
Could Amazon help hold off recession
Amazon Prime Day is upon us and over the next two days, plenty of online deals will be snapped up.
According to eToro global markets strategist Ben Laidler, the ramped-up activity could help stave off recession.
"The Amazon ‘Prime Day’ consumer spending extravaganza runs today and tomorrow and is one of the biggest global retail events of the year. It is a key test for eCommerce sales and retail sentiment with consumers seeing unprecedented pressure from high inflation and economic uncertainty,” Laidler said.
"Amazon offers deals to its over 200 million Prime members in 20 countries from Austria and Australia to the UK and US, whilst many other retailers, from Walmart to Target, piggyback on the event and offer their own deals.
"Prime Day is typically the third-largest US retail spending day, with sales estimated near $8 billion this year, an increase of more than 15% from 2021. A strong Prime Day would help ease the rapidly mounting economic recession fears and prove the adage to ‘never underestimate the consumer."
Expensive breakfast
Laidler also had something to say about the rising cost of breakfast.
The Breakfast Commodity Index is based on current spot prices of a basket of nine typical breakfast goods - wheat, sugar, cocoa, oats, pork, orange juice, coffee, milk and tea. Since July 2020, the index has risen by 71%, with the war in Ukraine, global supply chain issues and bad weather the key factors causing the upward trend.
“Commodity prices have been rising across the board since the COVID pandemic thanks to global supply chain chaos, and the war in Ukraine has only exacerbated this. Add this to poor weather impacting a number of crops in the last year, and you have a perfect storm of factors making the food on your breakfast table far more expensive to source and supply for food companies,” Laidler said.
“Much of these price increases are already being passed on to consumers, through higher prices or smaller ‘shrinkflation’ sizings.”
Orange juice has seen the steepest price rise jumping 124% in two years, largely thanks to a particularly poor orange harvest in the US stemming from bad weather and disease.
Coffee prices have also skyrocketed, rising 94% over the same period, due to poor weather in major producing countries such as Brazil, as well as ongoing global supply chain issues.
Here’s a look at five of today’s top small-cap stories.
Gascoyne Resources dubs Gilbey’s North a “game-changer” after intersecting wide high-grade gold zones
"This could be a significant new development for us. We are learning more as we drill each hole and we are very excited to be mapping out a bright new future for Gascoyne shareholders," said Gascoyne Resources Ltd (ASX:GCY) MD/CEO Simon Lawson said.
Paradigm Biopharmaceuticals signs OA research agreement with major US sporting organisation
Paradigm Biopharmaceuticals Ltd (ASX:PAR) has entered a research partnership with NFL Alumni Health which has more than 10,000 members and represents former NFL players and coaches.
Alicanto Minerals delivers maiden 10 million tonnes at 4.5% zinc equivalent resource that confirms Sala's global scale
“We believe there is significant inventory growth to come, with the mineralisation open in every direction and numerous highly prospective targets to drill," said Alicanto Minerals Ltd (ASX:AQI) managing director Peter George.
Venture Minerals' JV partner Chalice Mining pinpoints new nickel-copper-PGE targets at South West Project in WA
Venture Minerals Ltd joint venture partner Chalice Mining Ltd (ASX:CHN, OTCQB:CGMLF) has now met its expenditure requirement of $1.2 million to earn 51% and can now elect to spend a further $2.5 million over the next two years to earn 70% in Venture’s South West Project.
Kingwest Resources signs mining agreement to restart gold production at Menzies
Kingwest Resources Ltd (ASX:KWR) and BML Ventures have agreed to terms for mining the 11,500-ounce Selkirk deposit in the Menzies Gold Project.
On your six
The Elon Musk versus Twitter battle is only just heating up as spectators grab for the popcorn.
Protracted litigation likely in Musk's Twitter renege
A drawn-out legal battle is expected to take shape following Tesla CEO Elon Musk’s (perhaps un)surprising withdrawal from his US$44 billion merger agreement with social media platform Twitter.
The one for good luck
Rooster Talk: Adavale Resources' dominant landholding in the East African nickel belt
Adavale's Kabanga Jirani Nickel Project is adjacent and along strike from the world’s largest undeveloped nickel sulphide resource, namely the Kabanga Deposit.