"Good night, Stockholm. Sorry for gettin' all up in your economy." Pic via Getty Images.
ASX Small Caps Lunch Wrap: Which Single Lady managed to kneecap the Swedish economy last month?
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Local markets are enjoying a sunny end to the week so far, with the benchmark up around 0.6% as we head into lunch, thanks in no small part to US investors turning their backs on the world’s economic woes to focus on Chinese Whispers about a potential stimulus round from Beijing.
That’s despite ongoing inflationary pressures around the globe that have been unsettling markets pretty much everywhere, quite consistently, over the past few weeks – including in the world’s most prominent flat-pack furniture and meatball-based economy, where fresh inflation data has been proving difficult to get a handle on.
It’s been a troubled time for Sweden in recent months, after inflation spiked in December to a 30-year high at 12.3%, slowing slightly in January to 11.7%, before heading north to 12% again in February.
Most recently, Sweden’s consumer prices rose by a relatively calm 9.7% in May year-on-year, down from 10.5% in April – something the nation’s economists are semi-celebrating, as it’s the first time inflation has come in under 10% in more than six months.
According to Statistics Sweden, the welcome dip could be attributed to a fall in the cost of a few basic staples, namely electricity and food prices.
However, the Swedes were almost universally expecting it to fall further than that – and it would have, except that there was a brief, but noticeable, surge in a few non-essential costs including hotel and restaurant visits, clothing and the “recreational services” category, which is so nebulous it must be a euphemism for something gross.
After applying some staid, yet profound, lateral thinking as to what might have been the root cause of it, chief economist for Sweden at Danske Bank Michael Grahn has landed on a theory that is so wild, it must be right.
At the beginning of May, there was a cultural event in the Swedish capital Stockholm, which saw a sudden – and relatively massive – influx of tourists to the city, which locals were more than happy to turn into a spot of good-natured price-gouging.
Beyoncé launched her world tour.
For real… that’s the reason why Sweden’s economy is misbehaving. Decades after rising to fame in Destiny’s Child with Michelle Rowland and The Other One, Beyoncé is now enough of a superstar that she’s able to exert Jedi-like influence over entire economies.
It’s the first time in seven years that Beyoncé has (I assume) left the house to harumph about on stage while her sound engineers tie themselves in knots trying to filter out the unending chorus of bilious grunts that surely must accompany the singer’s heavy-handed on-stage choreography.
Which is why more 90,000 fans – quite a number of them coming from overseas – turned up en masse to witness the spectacle, spending up big on hötels, fåst føød and overpriced Chinese-made crap with the singer’s shimmering visage printed on it.
And that, according to Grahn, “probably” accounted for around 0.2 to 0.3% of May’s inflationary bump for Sweden – enough of a gut-punch that local economists are now starting to factor touring musicians, such as Bruce Springsteen’s upcoming visit, into their forecasting.
I reached out to Beyoncé for comment, but I doubt she’ll reply because we’re fighting at the moment. (She knows what she did. And if she doesn’t, I’m not going to tell her.)
But I have precisely zero doubt that she intends to continue her world tour, and is quite prepared to rampage around the world and tank every local economy she can get her hands on.
For her fans, of course.
TO MARKETS
Local markets got off to a cracking start this morning, jumping 0.4% at open after Wall Street cranked out a solid performance in New York overnight.
The good times keep on coming throughout the morning session for the ASX as well, hitting +0.6% on the way towards lunch, thanks to some really strong performances from the Utilities (+2.5%), InfoTech (+2.0%) and Energy (+1.9%) sectors.
The Utilities surge is being driven by a huge 14.2% leap for AGL Energy (ASX:AGL), after it released an updated FY23/24 guidance and dividend policy document this morning, featuring a handful of lovely graphs pointing to just how outrageously the company intends to gouge consumers over the next 12 months or so, and how much of that will end up in the hands of investors.
As we head towards the Magic Sandwich Hour, Consumer Staples is the only sector with the needle in the red – it’s down 0.1% – and Health Care (up just 0.1%) is still struggling to get its feet underneath it following two solid sessions of heavy losses.
Investors seem keen to get digging into the goldies this morning, despite the gold price needle not moving all that much – the XGD All Ords Gold index is out in front of the rest of the market on +1.71%.
Up the top end of town, coal miners Stanmore (ASX:SMR) and Whitehaven (ASX:WHC) are up 6.5% and 5.3% respectively, De Grey (ASX:DEG) has climbed 5.9% following yesterday’s news that the company’s all-conquering Hemi resource has grown 12% to 9.5Moz, and Pilbara (ASX:PLS) is up 4.9% because – honestly – who doesn’t love lithium?
NOT THE ASX
It seems that US investors have finally started listening to me – in particular, my surgically-precise skewering of US Fed chief Jerome Powell – because, despite the old man’s best efforts to turn a rate pause into bad news, Wall Street did really well overnight.
The S&P 500 finished +1.2% higher, while tech heavy Nasdaq rose +1.15% and the Dow – that gross, lumbering dinosaur of thing – gained 1.26%. I know, right?
US investors seem to have cheerfully ignored Old Man Powell’s attempts to ruin Christmas, plus the European Central Bank’s 0.25% rate hike, and – unbelievably – New Zealand finally admiitting it has a bit of a recession problem.
Instead, Wall Street has done what Wall Street seems to do best – ignore hard data in favour of the international rumour mill, which the hot gossip is about a possible stimmy sesh in China, in an attempt to prop up a few key sectors so that the (potentially massively rubbery) economic figures it intends to publish in a few weeks’ time are somewhat plausible.
Little wonder then that, as Earlybird Eddy reported this morning, Alibaba shares rose 4.5% after the company said that it wants to expand rapidly outside of China.
Microsoft climbed to record highs, while Mediterranean restaurant chain Cava doubled to US$43 on its first day of IPO listing.
In Japan, the Nikkei has fallen 0.66% as the country grapples with a fresh outbreak of national shame.
According to official data from Japan’s National Police Agency, the number of people who needed to be rescued after becoming stranded on mountains around the country soared to a record 3,506 in 2022, its highest level since Japan started bothering to rescue people stranded on mountains in 1961.
The National Police Agency said that of that startlingly high number, some 80% of the nation’s people stranded on mountains were “in the mountains for climbing purposes”, while the other 20% (I assume) were in the mountains for getting stranded purposes.
In China, Shanghai markets are up 0.21% after rumours of a government stimulus and a massive surge in Beyoncé merch manufacturing buoyed local investor sentiment, while in Hong Kong the Hang Seng is up 0.33% because of the weather or something.
In Crypto Corner, news that BlackRock – yep, that BlackRock – has applied for a spot BTC EFT has quite a large number of people wondering WTAF is going on.
Including me, because this really is an enormous test of SEC’s resident amphibian Gary “The Gonad” Gensler’s intestinal fortitude … it’s not every day that a company managing a US$9 trillion war chest hands you a note in class, challenging you to a fight behind the change rooms after school on Friday.
There is a massive amount of detail behind this that I honestly don’t have the patience to try to unravel (or, if I’m being honest, understand) – but luckily, Rob “Mr CryptoSponge” Badman has been able to digest the story and you can read his Star Wars-themed analysis over at Mooners & Shakers.
(Before you ask, no… I don’t know why it’s Star Wars themed. But I adore the fact that it is.)
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for June 16 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap XTC Xantippe Res Ltd 0.003 50% 18,127,121 $22,960,199 ADS Adslot 0.004 33% 901,250 $6,613,045 ARV Artemis Resources 0.016 33% 13,641,163 $18,839,020 MTL Mantle Minerals Ltd 0.002 33% 2,200,376 $9,221,169 JRV Jervois Global Ltd 0.094 31% 51,486,856 $149,747,045 AHN Athena Resources 0.009 29% 63,155,689 $7,493,273 LML Lincoln Minerals 0.018 29% 2,152,837 $8,049,772 GRE Greentechmetals 0.415 26% 4,337,465 $13,830,164 LGM Legacy Minerals 0.15 25% 56,734 $6,459,296 OSX Osteopore Limited 0.13 24% 73,423 $15,143,993 DVL Dorsavi Ltd 0.016 23% 178,795 $7,191,742 HAW Hawthorn Resources 0.16 23% 1,463,530 $43,552,030 SES Secos Group Ltd 0.06 22% 873,033 $29,080,553 XAM Xanadu Mines Ltd 0.073 22% 7,943,948 $98,269,451 C1X Cosmos Exploration 0.485 21% 370,181 $17,790,000 NGX NGX Limited 0.24 20% 169,079 $18,122,368 MEG Megado Minerals Ltd 0.06 18% 1,107,488 $12,977,233 ZEU Zeus Resources Ltd 0.055 17% 9,057,716 $20,602,967 CTN Catalina Resources 0.0035 17% 126,892 $3,715,461 CXU Cauldron Energy Ltd 0.007 17% 88,050 $5,589,412 ETR Entyr Limited 0.014 17% 770,484 $20,806,273 IEC Intra Energy Corp 0.007 17% 17,623,950 $4,234,690 GLV Global Oil & Gas 0.015 15% 3,452,082 $4,457,436 BTE Botala Energy 0.115 15% 5,901 $5,331,667
In Small Caps today, the astronomical gains that we’ve seen throughout the week have been replaced with the far-more-familiar sight of little companies making reasonably-sized gains – and fans of stocks that move around on their own, devoid of any apparent external influence, are in luck as well.
Because at the top of the table today is Artemis Resources (ASX:ARV), which has climbed 33.3% this morning with a 7x surge in volume over its 4-week average, on precisely zero fresh news.
However, a bit of digging turned up the fact that Artemis holds a 12.25% stake in recent rocket-rider GreenTech Metals (ASX:GRE), which coincidentally has added another 21% to its gains this morning, taking its weekly rise to 263.6%.
So that’s probably why.
In second place is junior explorer Jervois Mining (ASX:JRV), which is up 31.2% this morning on news that the company has inked a US$15 million deal with the United States Dept of Defence.
The money is to be spent on drilling at JRV’s Idaho Cobalt Operations mine, and the completion of a bankable feasibility study for construction of a cobalt refinery in the United States.
And in third place pre-lunch is Xanadu Mines (ASX:XAM), which is up 25% this morning on week-old news that the company (along with joint venture partner Zijin Mining Group) has turned up new, higher Au-Cu grades through an infill drilling program at the Kharmagtai Stockwork Hill and White Hill deposits.
When the release went live on June 7, the company had completed roughly half of a planned 30,000m Phase One diamond drilling program, with the results of that work proving to be “in line with or materially better than the 2021 Mineral Resource Estimate”, XAM says.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for June 14 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap MTH Mithril Resources 0.001 -33% 19,000 $5,053,207 C29 C29 Metals 0.093 -31% 480,968 $5,584,533 FAU First Au Ltd 0.003 -25% 1,500,000 $5,807,973 VPR Volt Power Group 0.0015 -25% 765,499 $21,432,416 GGX Gas2Grid Limited 0.002 -20% 1 $10,192,755 LSR Lodestar Minerals 0.004 -20% 1,389,900 $9,216,987 ME1 Melodiol Global Health 0.007 -18% 30,501,806 $22,396,219 RR1 Reach Resources Ltd 0.0125 -17% 50,709,073 $41,325,760 AD1 AD1 Holdings Limited 0.005 -17% 423,565 $4,935,414 BP8 BPH Global Ltd 0.0025 -17% 148,364 $3,854,189 CAV Carnavale Resources 0.0025 -17% 1,105,895 $8,200,655 GFN Gefen Int 0.005 -17% 10,000 $408,601 GTG Genetic Technologies 0.0025 -17% 400,000 $34,624,974 OAU Ora Gold Limited 0.0025 -17% 10,269 $11,810,775 PUA Peak Minerals Ltd 0.0025 -17% 1,100,000 $3,124,130 YOJ Yojee Limited 0.017 -15% 1,119,333 $22,669,248 CHK Cohiba Min Ltd 0.003 -14% 10,000 $7,396,355 OAR OAR Resources Ltd 0.003 -14% 1 $8,998,633 RGS Regeneus Ltd 0.006 -14% 120,000 $2,145,058 TIG Tigers Realm Coal 0.006 -14% 7,980,534 $91,466,917 VAL Valor Resources Ltd 0.0035 -13% 1,339,145 $15,212,139 NUH Nuheara Limited 0.175 -13% 202,205 $39,413,977 HVM Happy Valley 0.015 -12% 156,477 $3,883,727 AVC Auctus Invest Grp 0.79 -11% 7,666 $67,300,357 BFC Beston Global Ltd 0.008 -11% 550,070 $17,973,422
