Lithium boom outperforming weaker equity markets
US equities were narrowly mixed in very quiet Tuesday trading after giving up some early gains. Stocks fell as a summer rally fizzled out amid mounting rate hike concerns as the 10-year Treasury yield climbed above 3 per cent.
The Dow Jones fell 0.47 per cent, to 32,909.59. The S&P 500 fell 0.22 per cent , and the Nasdaq Composite closed flat 0.002 per cent to 12,381.30. Both the Dow and the S&P 500 declined for a third straight session.
Real estate, health care and communication services were the worst performers in the S&P 500. Meanwhile, energy was the biggest winner in the broader market index, up 3.6 per cent on the back of rising oil prices. Oil prices soared more than $3 a barrel on Tuesday after Saudi Arabia floated the idea of OPEC+ output cuts to support prices and with the prospect of a drop in U.S. crude inventories.
Across the sectors best performing industries were copper, agriculture & fertilisers, coal, gold, aluminium and lithium.
Lithium stocks like Lithium America and Livent Corp rose 5 per cent each while FMC Corp and Albermale were up in a weaker market.
If the results of Australian based Pilbara Minerals (ASX:PLS) is anything to go by , then 2021-22 is shaping up to be the year when the long talked about lithium boom has became very real and very profitable. Pilbara reported a full-year after-tax profit of $561.8 million for the 2021–22 financial year, which was a 577 per cent increase in sales revenue to approximately $1.2 billion. The company had a cash balance of $874.2 million on 30 June 2022. Shares in Pilbara Minerals closed 3.2 per cent higher to $3.27 yesterday.
In EV news, Volkswagen AG and Mercedes-Benz Group AG have finalised agreements with Canada to secure access to key raw materials such as nickel, cobalt, and lithium for battery production. Volkswagen's agreement is designed to shorten supply chains for its facilities in the US and to avoid any difficulties linked to tariffs and tax regulations.
All of which is being driven by the extraordinary demand for EV vehicles and the geopilotical drive to secure non Chinese sourced battery materials.
China currently refines 73 per cent of the world’s cobalt, 68 per cent of its nickel, 59 per cent of its lithium and 40 per cent of its copper, making it the “dominant global player in refining strategic minerals”
In after hours trading, Zoom Video shares slumped 16.5 per cent after the video conferencing company lowered its full-year forecast. Nordstrom — Shares of the department store tumbled more than 12 per cent in extended trading after the company slashed its financial forecast for the full year. Once again a retailer has concerns with a glut of inventory that it must discount to move off shelves.
Currencies
One Australian dollar has strengthened compared to the US dollar yesterday, buying 69.30 US cents (Tue: 68.76 US cents), 58.54 Pence Sterling, 94.75 Yen and 69.48 Euro cents.
Commodities
Iron ore futures are pointing to a 2.4 per cent gain.
Gold gained $12.90 or 0.7 per cent after six straight sessions of losses as the dollar and Treasury yields dropped following weak U.S. business activity data.
Silver was up $0.10 or 0.5 per cent to US$19.08 an ounce.
Copper gained $2.65 or 0.7 per cent to US$368 a pound.
Oil added $3.43 or 3.8 per cent to US$93.79 a barrel.
Futures
The SPI futures are pointing to a 0.2 per cent gain
Ex-dividends
There are five companies set to trade without the right to a dividend.
Blackwall (ASX:BWF) is paying 2.4 cents fully franked
Pact Group Holdings (ASX:PGH) is paying 1.5 cents 65 per cent franked
SG Fleet Group (ASX:SGF) is paying 6.811 cents fully franked
Thorn Group (ASX:TGA) is paying 3 cents fully franked
Telstra Corporation (ASX:TLS) is paying 8.5 cents fully franked
Dividends payable
There is one company set to pay eligible shareholders today.
Janus Henderson Group (ASX:JHG)
IPO
There is one company set to make its debut on the ASX today. Keep an eye out for Heavy Rare Earths (ASX:HRE) after raising $6 million at 20 cents per share.
Figures around the globe
Across the Atlantic, European markets closed lower. Paris fell 0.3 per cent, Frankfurt also lost 0.3 per cent and London’s FTSE closed 0.6 per cent lower.
Asian markets closed lower. Tokyo’s Nikkei fell 1.2 per cent, Hong Kong’s Hang Seng lost 0.8 per cent and China’s Shanghai Composite closed 0.1 per cent lower.
Yesterday, the Australian sharemarket fell 1.2 per cent to 6962.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
