Time to go home when the ferris wheel breaks. Pic via Getty Images.
CLOSING BELL: Because it’s time to go home when the ferris wheel breaks
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- ASX takes a pre-Christmas bath, dragged down by InfoTech and Discretionary
- Asian markets fall lower today as Japan widens yield target range
- PolarX is still ruling the playground after one of the big kids said it was cool
With apologies to Brett Woodward for stealing the title of his amazing book, today’s market performance (off the back of yesterday’s weary waddling into the red), is looking anything but very Christmassy.
Unless it’s trying to dress all in red like Santa Claus, but honestly no one needs or wants yet another big fat red thing hanging around and stinking the place up, even if it is meant to be handing out presents while posing for photos with strangers’ kids.
Both hands where we can see ‘em please, Santa…
The market’s drop of 1.5% today was largely the fault of… basically everybody. But InfoTech (4.44%) and Consumer Discretionary (3.36%) in particular.
Consumer Discretionary is the interesting one, down alarmingly despite early estimates for spending this year from Roy Morgan told us that we were supposed to be spending $63.9 billion in the pre-Christmas sales period (November 14 – December 24), up 3% on last year.
Not sure if someone’s missed a Christmas shopping memo or two, but the Discretionary sector is down 7.5% since the beginning of December.
Nowhere is the issue with Discretionary clearer today than for Small Capper City Chic Collective (ASX:CCX), which is down more than 25% after releasing a trading update that made people sad.
Up the top end of town, things were a bit exciting (the bad kind of exciting, though – just so we’re clear).
The big mover and shaker was “Disaster Capitalism” company Johns Lyng Group (ASX:JLG) which has fallen ~11% after news broke that executive director and group chief operating officer Lindsay Barber had offloaded a few of the company shares.
And by a few, we mean about 4,000,000 of them, a 31% chunk of his holdings in the company, leaving Barber with some 8.87 million shares of JLG, which the company says “continues to reflect the major proportion of his personal wealth and investments”.
Senior management dumping stock (in any company – not just this example) is always going to test the intestinal fortitude of investors – something JLG knows all too well.
Today’s dump isn’t JLG’s first insider sell-off rodeo this year. Hell, it’s not even Barber’s first rodeo this year – he and CEO Scott Didier have been selling off huge tranches of their holdings in JLG throughout 2022.
In May, Didier and Barber offloaded 1 million shares apiece, around the middle of a major price slump for JLG that saw it fall from $8.94 to $5.58, and in October, Didier dropped 4 million shares in an on-market selloff.
That one was explained away as necessary because Didier needed the cash to pay for his new home in Colorado.
Today, it was Barber’s turn again and the market has reacted poorly to the news, which – despite being explained by JLG as being driven by Barber’s desire to diversify his holdings – has tied a rope to the ankle of the company’s price and kicked the attached concrete block over the side of the ship.
NOT THE ASX
In Asia, it’s all a bit grim today as well.
Japan’s central bank announced that it’s widening its yield target range, modified its yield curve control tolerance range while holding its already super-low benchmark interest rates on an even keel.
The BoJ’s decision helped bolster the yen (up 3% against the USD after the announcement), and injected a slim quantity of confidence into an otherwise moribund market, helping the Nikkei to climb 0.29% while the rest of the region fumbled.
In Hong Kong, the market fell 1.25% and in Shanghai the losses were slimmer, down 0.75% – despite a pledge from Chinese President Xi Jinping to focus on his country’s economy in the face of a spike in Covid-related hospitalisations.
The ongoing effect of China’s recent, and horribly abrupt, decision to essentially “let ‘er rip” with Covid is hard to predict… but the effects of locking the citizens of China in their homes for so long are very much being felt already.
Anyone hoping for the desperately-needed turnaround in consumer spending in China as a result of the policy change is likely going to have to wait longer than expected.
The country is staring down the barrel of potentially millions of deaths now that lockdowns are voluntary (rather than strictly enforced) – and China’s already tanking economic activity in November is more likely than not to be kicked in the guts even harder as more of the population falls sick.
FROM THE HEADLINES
‘ASX Wolf’ cops a slapdown
It’s not been a great day for social media influencer Tyson Scholz, who has been roundly scolded by the Federal Court, which found that the Lambo-driving luxury lifestyle dude has “contravened s911A of the Corporations Act by carrying on a financial service business (between March 2020 and November 2021) without an Australian financial services licence”.
That is, obviously, a massive no-no in the eyes of the law – and an even bigger black eye for the self-proclaimed “ASX Wolf”, whose social media posts talking about particular stocks were mixed in with the usual wretchedly smug and terminally boring smorgasbord of fast cars, pretty girlfriend, speedboats and private jets… #OverCompensating
Scholz’s Instagram is currently set to private, so those photos aren’t readily available – so here’s a picture of his Lambo being towed away by the Queensland Police.
But seriously, the young fella’s in a whole heap of trouble after today’s finding.
“It did not matter that the stories did not contain any overt recommendation to acquire the shares: it was enough that Mr Scholz referred to a company or its shares in the stories, which was usually done in a way which indicated that he liked that company,” Federal Court Justice Kylie Downes said in the finding.
Scholz was pinged in 2021 after he charged subscribers $500, $1,000 or $1,500 for access to what amounted – according to ASIC and the courts – to financial advice, despite Scholz not holding the appropriate bits of paper.
Subscribers also had access to Scholz’s “Black Wolf Pit” Discord channel, and could purchase “one-off share tips for a fee”, The Australian says.
No word just yet on how brutally Scholz is going to be dealt with for breaking the law, but The Australian says ASIC is “seeking that Mr Scholz be prohibited from promoting or carrying on the business of providing recommendations in return for payments of money or other benefits, directly or indirectly carrying on any financial services business in Australia, and receive, soliciting, transferring or disposing of customer funds received in connection to providing recommendations or opinions about the purchase of shares.”
It’s a clear indication that ASIC isn’t dicking around with its plans to go after social media influencers who are involved in similar activities, with ASIC deputy chair Sarah Court stating that the regulator is keeping a close eye on influencers and how they’re conducting themselves in this space.
RBA Minutes Drop
Meanwhile, the other big news today came via the release of the Reserve Bank’s meeting minutes from December, which revealed that there is a sizable chunk of uncertainty among the policy makers at the table.
The board considered – at length – two options: The first was a pause for the official interest rate, a fairly cautious approach that would have made for a nice Christmas gift for mortgage and loan holders around the country.
But in the end, the RBA landed on “noting that inflation in Australia remained too high” – so we all got walloped again on 06 December… and look set to keep getting the heat turned up for a while to come.
The RBA’s 2-3% inflation band target still looks set to be outflanked, well into 2025 according to more than a few people, including Westpac chief economist Bill Evans.
“The key is that the current forecasts which have rates rising further are still pointing to a number of years where the inflation rate is outside the range. So unless there has been a change in the data since those November forecasts were released, the board needs to press on,” Evans said.
Any way you slice that, the outlook isn’t fabulous – so let’s finish up on some positive news about what’s happened among the Small Caps today.
ASX SMALL CAP LEADERS
Here are the best performing ASX small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Price | % | Volume | Market Cap |
|---|---|---|---|---|---|
| NGY | Nuenergy Gas Ltd | 0.025 | 39% | 180,000 | $26,657,199 |
| GLV | Global Oil & Gas | 0.002 | 33% | 287,584 | $4,017,407 |
| PXX | Polarx Limited | 0.02 | 33% | 48,347,159 | $17,521,255 |
| CAV | Carnavale Resources | 0.005 | 25% | 400,000 | $10,934,207 |
| MTL | Mantle Minerals Ltd | 0.0025 | 25% | 440,000 | $10,691,210 |
| 3DA | Amaero International | 0.17 | 21% | 1,278,920 | $58,164,430 |
| AUH | Austchina Holdings | 0.006 | 20% | 117,000 | $10,389,418 |
| RNX | Renegade Exploration | 0.006 | 20% | 318,333 | $4,608,419 |
| FIJ | Fiji Kava Limited | 0.02 | 18% | 1,088,652 | $4,856,125 |
| IVZ | Invictus Energy Ltd | 0.345 | 17% | 13,154,250 | $260,284,784 |
| AOA | Ausmon Resorces | 0.007 | 17% | 1,853,581 | $5,143,736 |
| ATU | Atrum Coal Ltd | 0.007 | 17% | 100,001 | $8,350,195 |
| CHK | Cohiba Min Ltd | 0.007 | 17% | 12,216,255 | $9,765,965 |
| MCT | Metalicity Limited | 0.0035 | 17% | 3,684,294 | $10,476,118 |
| SI6 | SI6 Metals Limited | 0.007 | 17% | 183,000 | $8,972,368 |
| SKN | Skin Elements Ltd | 0.014 | 17% | 1,791,773 | $5,593,619 |
| LBT | LBT Innovations | 0.058 | 16% | 452,661 | $16,531,719 |
| M24 | Mamba Exploration | 0.15 | 15% | 65,700 | $5,482,750 |
| ADG | Adelong Gold Limited | 0.008 | 14% | 6,696,327 | $3,102,308 |
| ADX | ADX Energy Ltd | 0.008 | 14% | 804,747 | $24,590,388 |
| ADY | Admiralty Resources | 0.008 | 14% | 420,000 | $9,125,054 |
| IPB | IPB Petroleum Ltd | 0.008 | 14% | 515,000 | $3,194,589 |
| EVR | Ev Resources Ltd | 0.017 | 13% | 760,429 | $13,934,761 |
| WGX | Westgold Resources. | 0.855 | 13% | 7,569,003 | $357,585,161 |
| KWR | Kingwest Resources | 0.035 | 13% | 120,129 | $8,733,531 |
Today’s top performer is once again PolarX (ASX:PXX), still firing on all cylinders after yesterday’s news that major gold miner Northern Star Resources (ASX:NST) became a 10% shareholder in the junior explorer.
On Monday, PXX shot up 25% – and today, it’s climbed even higher, adding another 33% to the bottom line and now trading at… $0.02 a share. Huge.
Another local team having a corker is organic skin care developer Skin Elements (ASX:SKN), which climbed 25% today on no news, but possibly as a result of everyone finally realising that summer is fast approaching, and we’re all gonna need sunscreen that isn’t going to murder vast swathes of the nation’s coral reefs while we’re splashing about in the ocean.
Meanwhile, additive manufacturer Amaero (ASX:3DA) is flying – in a big way – up 21.4% today on no news. In fact, there’s been so little news, that the ASX wrote 3DA a Please Explain, to which 3DA replied “nothing to see here… we’re as mystified as you are”.
The only hint that there’s something waiting in the wings was a teaser announcement of an investor briefing on the company’s binding joint venture agreement with Rabdan Industries for additive manufacturing and powder production in Abu Dhabi.
That’s set to happen on Thursday, and will take place against the backdrop of 3DA rising 76.7% this week alone, and 173.4% for the month so far.
ASX SMALL CAP LAGGARDS
Here are the least best performing ASX small cap stocks:
Swipe or scroll to reveal full table. Click headings to sort:
| Code | Company | Price | % | Volume | Market Cap |
|---|---|---|---|---|---|
| BWX | BWX Limited | 0.295 | -53% | 11,973,857 | 125,992,126 |
| NME | Nex Metals Explorat | 0.02 | -33% | 316,801 | 8,364,571 |
| WBE | Whitebark Energy | 0.001 | -33% | 413,418 | 9,697,329 |
| CCX | City Chic Collective | 0.405 | -31% | 40,338,534 | 136,832,851 |
| FAU | First Au Ltd | 0.003 | -25% | 237,315 | 3,807,973 |
| GNM | Great Northern | 0.003 | -25% | 4,500,000 | 6,836,204 |
| KNM | Kneomedia Limited | 0.012 | -25% | 2,286,724 | 21,660,565 |
| MEB | Medibio Limited | 0.0015 | -25% | 780,826 | 6,641,188 |
| YPB | YPB Group Ltd | 0.003 | -25% | 2,038,180 | 1,626,185 |
| AQX | Alice Queen Ltd | 0.002 | -20% | 265,200 | 5,500,625 |
| EDE | Eden Inv Ltd | 0.004 | -20% | 812,679 | 13,556,151 |
| GTG | Genetic Technologies | 0.002 | -20% | 2,200,000 | 23,084,913 |
| RR1 | Reach Resources Ltd | 0.004 | -20% | 1,130,000 | 9,550,253 |
| SER | Strategic Energy | 0.013 | -19% | 297,800 | 4,747,899 |
| GFN | Gefen Int | 0.041 | -18% | 248,904 | 3,405,006 |
| SIO | Simonds Grp Ltd | 0.115 | -18% | 26,017 | 20,612,798 |
| HAR | Harangaresources | 0.1 | -17% | 20,000 | 5,017,682 |
| MBX | Myfoodieboxlimited | 0.025 | -17% | 500,000 | 1,005,000 |
| PUA | Peak Minerals Ltd | 0.005 | -17% | 4,499,926 | 6,248,225 |
| RDN | Raiden Resources Ltd | 0.005 | -17% | 5,026,858 | 9,927,495 |
| INR | Ioneer Ltd | 0.4 | -16% | 13,906,852 | 996,710,677 |
| GRV | Greenvale Energy Ltd | 0.135 | -16% | 817,597 | 67,475,553 |
| TFL | Tasfoods Ltd | 0.041 | -15% | 134,512 | 21,199,133 |
| AAJ | Aruma Resources Ltd | 0.055 | -15% | 888,084 | 10,202,498 |
| 1AG | Alterra Limited | 0.011 | -15% | 48,000 | 9,055,183 |
TRADING HALTS
Tombola Gold (ASX:TBA) – Halted pending the release of an announcement regarding a material announcement regarding gold processing and commercial operations.
Gold Mountain (ASX:GMN) – Capital Raising.
MoneyMe (ASX:MME) – MME is finalising amendments to the corporate facility with its lender, PEP.
Happy Valley Nutrition (ASX:HVM) – Update on the way concerning a previously-announced proposed offtake agreement for milk protein. Stay tuned.
