The ASX finished the week virtually unchanged after starting poorly and then picking up gains on Thursday and Friday.
The S&P/ASX200 is up today at time of writing, gaining 72.40 points or 1.03% to 7,120.50 and crossing above its 20-day moving average.
The index is down 4.35% for the last year to date.
The top performing stocks in this index on Friday so far are Bega Cheese Ltd up 11.23% and Viva Energy Group Ltd up 6.70%.
The week’s best and worst performing sectors
The best performing sectors included Energy, up over 4%, followed by Materials and Information Technology, which are both just in the green for the week. The worst performing sectors include Consumer Staples, down over 7%, followed by Consumer Discretionary and Financials, which are both down over 2%.
The best performers in the S&P/ASX top 100 stocks included Altium Limited (ASX:ALU) up over 20% after releasing a good report this week followed by Pilbara Minerals Ltd (ASX:PLS) and Allkem Ltd, as they are both up over 11%, while WiseTech Global Ltd is up over 8%. The worst performing stocks include Endeavour Group Ltd, down over 12%, followed by Reliance Worldwide Corporation (ASX:RWC) Ltd, down over 9%, and Coles Group, down over 8%.
What's next for the Australian stock market?
According to Wealth Within founder and chief analyst Dale Gillham:
“After rising for eight straight weeks, the All Ordinaries Index has finally started to pullback given that in the first two days of this week the market was down over 2%. On Wednesday and Thursday, the bulls charged back, erasing around half of the fall of the prior two days, so it will be interesting to see where the market closes today.
“My preference is for the market to fall for at least one or two more weeks before rising given that momentum has been very strong over the past two months and it needs to return to more normal levels for the next rise to be more sustainable. As we know, anything that rises fast often falls faster and it is typically retail investors that get caught out as they suffer FOMO near the end of a strong rise only to be subjected to the subsequent fall.
“I believe overall the market will be bullish for the remainder of this year and may even challenge the all-time high of 7,956 points set back in January. Right now, I think investors should be getting excited as I am seeing many top stocks setting themselves up for some nice moves.”
What made news this week
It’s annual reporting season in Australia, which seems to have slowed the market a little in terms of newsflow.
The market was also in fear of Fed Chair Jerome Powell’s pending Friday speech, which should indicate the direction of interest rates and central bank policy direction.
Afterpay shuts down app
Meanwhile, Afterpay Ltd (ASX:APT) shut down its popular 'Money by Afterpay’ financial wellbeing app, the product of a partnership with Westpac, which should pave the way for Block Inc (NYSE:SQ) to bring its Cash App to Australia, which is already used by 47 million Americans.
“Westpac Group and Afterpay have agreed to end their Banking as a Service (BaaS) collaboration agreement following Afterpay’s acquisition by Block and the subsequent decision to withdraw the money management app ‘Money by Afterpay’ offer in Australia,” Afterpay executive Lee Hatton said in a statement.
“We are really proud of the work we’ve done with the Westpac team to model a completely different approach in the Australian market that was firmly focused on the needs of our customers. Our decision to move in this new direction is due to our exciting next chapter with Block, particularly as we think about cash app opportunities here in Australia, and we wish the Westpac team and its growing list of BaaS customers continued success.”
Block acquired Afterpay this year in the biggest corporate deal in Australian history, with Afterpay contributing 10% of the US giant’s second-quarter gross profit of $US1.47 billion ($2.11BN), which was up 29% year-on-year.
Macquarie Telecom continues to grow
Macquarie Telecom Group Ltd announced its FY22 results, topping its guidance and marking its eighth successive year of EBITDA growth with a 19.8% rise to $88.4 million.
The company exceeded $300 million in revenue (8.5% rise) across its data centre, cloud, government and telco businesses. In FY23, Macquarie will continue to invest heavily, including by increasing the total IT load capacity of its IC3 East data centre by 1 megawatt and injecting up to $80 million in growth and customer growth CAPEX.
Chairman Peter James said, “The 2022 full year results delivered the eighth consecutive year of EBITDA growth underpinned by our strategy of investing in data centres, cloud, cyber security and telecom. It is very pleasing to see that EBITDA has grown year-on-year in every segment.”
Quite the week for Qantas
Qantas is doing its best to stay in the news this week.
From $50 'sorry' vouchers to a big hit in its reporting and now mooted price hikes.
The airline ended the week by saying consumers would have to foot the rising fuel bills.
The company revealed it would increase domestic airfares by 10% and international fares 20%. It will also reduce flying to about 93% of 2019 levels, adding up to $300 to some flights.
The company lost more than $1 billion (a $1.86 billion statutory before-tax loss, $85 million more than the previous year) in the last financial year and needs to make up the loss. That will be mitigated somewhat by more passenger movement during the spring and summer seasons, but the airline is on the nose with customers at the moment due to flight delays and rampant incidences of lost baggage.
“We have to pass that on because we can’t digest that after $7 billion of losses in three years,” CEO Alan Joyce said.
“I think a lot of airlines around the world are doing the same thing.”
A trip from Melbourne to Sydney will cost an estimated $250 from $230. Add the cost of petrol to get to and from the airport and the high cost of just being in Sydney and you might as well go to Bali.
Jetstar will still have cheap fares according to Joyce, just a lack of peanuts.
“Jetstar is estimated to carry 13 million people in the coming year, and five million of them will travel, even in this oil price environment, for under $100 and 10 million will travel for under $200,” he said.
“Some of the taxi fares for Melbourne to Tullamarine are more than that so we will still continue to offer that value for people out there but it is a cost we have to pass on. It’s a cost we can’t digest given what we’ve been through.”
On the crypto front
eToro’s Simon Peters gave his take on events in the sector.
Alphabet shows its support for crypto projects
“A new report from Blockdata revealed that Alphabet Inc (NASDAQ:GOOG) invested more in crypto and blockchain companies than any other listed company between September 2021 and June this year.
“It reportedly spent US$1.5 billion on four projects, as it looked to get ahead of competitors. It beat the likes of BlackRock, Morgan Stanley (NYSE:MS) and Samsung, which between them invested around US$3 billion across projects.
“The Blockdata report found that from the 40 public companies it tracked, approximately USD$6 billion flowed into a total of 61 crypto and blockchain start-ups, demonstrating that despite recent price volatility, the long-term trend is here to stay.
EU considers regulator with crypto focus
“The European Union is set to create a brand new regulator to provide oversight of crypto.
“While the cryptosphere has been affected by recent legislation already, such as the Markets in Crypto Assets (MiCA) regulation, it now seems that a specialist Anti-Money Laundering (AML) regulator will be created, and crypto providers will fall under its remit.
“Although timescales are still to be confirmed (and hinge upon negotiations), the EU appears increasingly keen to concentrate more on this area of innovation.
Ripple and Travelex team up to enable crypto enterprise payments in Brazil
“Ripple and Travelex Bank have collaborated to enable cross-border payments in Brazil. Ripple’s On-Demand Liquidity (ODL) will enable Travelex customers to send money across borders instantly, with a low-cost settlement and without the requirement to hold pre-funded capital in the market they wish to transfer the funds to.
“This move reinforces Brazil’s status as a crypto advocate, following regulation implemented which protects customers and fosters innovation simultaneously.
“Brazil is already a major player in payments, with US$780 billion sent each year, and so this latest collaboration seems like a logical step, especially considering the advocacy sentiment displayed by Latin America more widely.”
On the small cap front
At time of writing over the last week, there have been several stand-out small caps.
Anson Resources is 71.88% higher over the past five days. It has been a busy week for Anson. It surged on executing a binding memorandum of understanding (MoU) with leading global lithium extraction technology provider Sunresin New Materials Co. Ltd for a long-term strategic and commercial alliance for its Paradox Lithium Project in the US. It also released a major resource upgrade at Paradox.
Magmatic Resources Ltd (ASX:MAG) was down on Friday, but over the week managed to climb 34.62% after intercepting visible copper sulphide mineralisation from drilling at the Corvette prospect.
Cooper Metals Ltd (ASX:CPM) was another that fell on Friday, but managed an 8.16% gain over the week. Cooper expanded its current drilling program by 50% after encouraging results from 16 holes drilled of a planned 20.
Hartshead Resources NL (ASX:HHR) was up 12.12% at time of writing on Friday and 8.82% for the week. Hartshead has also had a big week securing the funding to advance an engineering study and a geotechnical survey as part of an agreement with Shell.
And that’s a wrap.