• July a great month for stocks — ASX200 had its best month since March, Emerging Companies (XEC) gained an eye-watering +14%
  • Copper explorer Cobre stands tall as broader mining and exploration sector wilts
  • Standout sector was Buy Now Pay Later, which had been getting its arse kicked all year

 

July was excellent for ASX stocks, bizarrely enough.

A textbook economic  turdstorm – ‘technical’ recession for the US, higher interest rates, ongoing inflation, and a weakening property market globally – was handily offset by investor hopium.

Wall Street closed out July with near-record gains after robust mega-cap tech earnings, hope that the Fed will pivot soon, and economic data that suggests the consumer is doing just fine.

The tech-heavy Nasdaq rose 12.55%, posting one of its best months on record.

The S&P500 (+9.1%) and Dow Jones (+6.7%) indices both recorded their best monthly gain since November 2020. For the first time this year, all sectors of the S&P500 index improved.

Asia-Pacific equity markets, excluding China, posted gains as well. The ASX200 had its best month since March after climbing 5.7%.

And S&P/ ASX Emerging Companies (XEC) gained an eyewatering +14% to put the index back into the black for 2022.

“I suppose we can attribute this reaction to the market looking ahead to see what is over the horizon,” Far East Capital analyst Warwick Grigor says.

“Investors are allowing themselves to be more optimistic than they were three months ago.

“Again, markets move on expectation and emotion, often more so than on actual news.”

We have experienced a market collapse in recent months – April, May and June were horrid — due to the fear of interest rate rises and inflation, so the selling has already happened, Grigor says.

“We are now seeing bargain hunting that is lifting stocks off their low,” he says.

“Steep downtrends are being broken and there are green shoots of optimism suggesting that we have seen the worst.

“Whether or not this is sustainable depends on how much money comes back into the market, but it is looking decidedly more positive for the time being.”

 

Which ASX sectors performed best in July?

 

Here are the top 50 performing ASX stocks for July:

Scroll or swipe to reveal table. Click headings to sort.

CODE COMPANY JULY RETURN % LAST SHARE PRICE MARKET CAP SECTOR
CBE Cobre 231% 0.086 $14,225,003 Minerals
SZL Sezzle Inc. 215% 0.82 $164,685,184 Fintech
LBY Laybuy Group Holding 211% 0.115 $29,304,208 Fintech
B4P Beforepay Group 167% 0.64 $21,670,073 Fintech
IOU Ioupay Limited 162% 0.11 $60,941,327 Fintech
SMX Security Matters 157% 0.27 $44,796,114 Technology
AGH Althea Group 154% 0.155 $49,793,418 Health & Biotech
PSC Prospect Res Ltd 150% 0.12 $55,471,135 Minerals
ZIP ZIP Co Ltd. 149% 1.135 $780,861,317 Fintech
OPY Openpay Group 145% 0.355 $56,189,165 Fintech
INP Incentiapay Ltd 143% 0.017 $21,506,082 Fintech
DOU Douugh Limited 140% 0.036 $21,414,754 Fintech
FBR FBR Ltd 122% 0.04 $111,156,133 Technology
DTC Damstra Holdings 122% 0.255 $65,712,579 Technology
ZLD Zelira Therapeutics 122% 2.15 $20,590,799 Health & Biotech
NSX NSX Limited 114% 0.06 $16,967,671 Financial Services
EBR EBR Systems 109% 0.71 $186,720,436 Health & Biotech
NUH Nuheara Limited 104% 0.245 $33,612,855 Health & Biotech
SPT Splitit 104% 0.255 $120,211,330 Fintech
OBM Ora Banda Mining Ltd 104% 0.055 $75,569,302 Minerals
AFW Applyflow Limited 100% 0.003 $8,872,824 Technology
EXL Elixinol Wellness 100% 0.04 $12,650,623 Health & Biotech
MCM Mc Mining Ltd 96% 0.235 $46,448,894 Minerals
RCW Rightcrowd 90% 0.076 $19,865,282 Technology
PRL Province Resources 89% 0.1 $117,399,314 Energy
GNX Genex Power Ltd 87% 0.215 $297,813,085 Energy
TYX Tyranna Res Ltd 86% 0.026 $39,841,377 Minerals
HAL Halo Technologies 85% 0.51 $66,047,871 Financial Services
1VG Victory Goldfields 85% 0.185 $7,114,757 Minerals
ABE Ausbondexchange 84% 0.415 $14,473,616 Financial Services
MDC Medlab Clinical Ltd 81% 0.087 $29,769,283 Health & Biotech
KNO Knosys Limited 81% 0.105 $22,694,563 Technology
GCR Golden Cross 80% 0.009 $9,875,305 Minerals
MVP Medical Developments 79% 2.52 $179,688,744 Health & Biotech
ECS ECS Botanics Holding 79% 0.025 $27,668,267 Health & Biotech
DCC Digitalx Limited 78% 0.048 $35,637,314 Crypto
TNG TNG Limited 78% 0.087 $120,792,385 Minerals
NGY Nuenergy Gas Ltd 76% 0.03 $44,428,665 Energy
PYR Payright Limited 76% 0.13 $10,167,848 Fintech
HIQ Hitiq Limited 75% 0.07 $7,920,933 Technology
SDV Scidev Ltd 74% 0.34 $64,457,771 Environmental
MR1 Montem Resources 74% 0.04 $10,302,443 Energy
GFN Gefen Int 73% 0.13 $8,832,217 Fintech
CNQ Clean Teq Water 73% 0.605 $27,023,035 Environmental
SPX Spenda Limited 70% 0.017 $54,088,250 Fintech
CFO Cfoam Limited 67% 0.005 $3,669,203 Shell Company
VR1 Vection Technologies 66% 0.093 $103,222,959 Technology
IMR Imricor Med Sys 65% 0.305 $43,795,631 Health & Biotech
NWM Norwest Minerals 64% 0.046 $8,307,940 Minerals
LAW Lawfinance Ltd 64% 0.27 $17,193,848 Financial Services
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Cobre stands tall as broader mining and exploration sector wilts

It managed to eke out a win, but the miner-heavy S&P/ASX 200 Materials [XMJ] index was still one of the worst performers last month as stocks battle higher inflation and a slowing Chinese economy.

Standing tall was exploration minnow Cobre (ASX:CBE), which hit paydirt at its Ngami copper project in Botswana on July 27.

The first diamond drill hole intersected a broad zone of copper, one of the main commodities at the heart of most electrical technologies, over a 59m interval.

“This new copper discovery represents a transformational moment for Cobre shareholders,” CBE executive chairman and MD Martin Holland said. Investors agreed.

 

A buy now, pay later renaissance?

The BNPL sector had been getting its arse kicked all year.

“The model looked tired, investors took to the high road and headline mergers like Block and sector leader Afterpay – instead of consolidating strength – suddenly looked ill-advised,” Stockhead’s Christian Edwards says.

But then, in July, the ASX Tech Index went on a massive run to outperform the broader ASX300 by quite some margin.

Since hitting a new 52-week low of 44 cents a pop at the end of June, industry stalwart Zip (ASX:ZIP) has jumped 150%. Joining it in our top 50 for July is (almost) the entire ASX buy now, pay later squad.

Why though?

“It is possible the swift reckoning in inflation settings, in the sense that at least Stateside, investors have now entirely priced in cash rate changes, has triggered confidence that the bottom of market falls is close,” Edwards writes.

“BNPL names were among the first and the fastest to fall. Perhaps it wasn’t the bottom of the BNPL model that fell over, just the over-valuations following years of market-leading share price gains.

“US 10-year bond yields have fallen 12% to a yield of 2.76% after hitting 3.42% yield on June 15 – perhaps it is the market telling us that it thinks rates are close to peaking and thus looking for the most hard hit sector in tech?

“Or is it simply that the market is happy to pick through the wreckage for opportunities in the first-to-get-bombed-out tech sector?”

That’s bargain hunting.