The ASX has fallen today.
The S&P/ASX200 dropped 61.90 points or 0.85% to 7,229.40. Over the last five days, the index has lost 0.75% and 1.16% over the last 52 weeks.
Bottom-performing stocks in this index are Beach Energy (ASX:BPT) and Paladin Energy (ASX:PDN), down 9.89% and 7.38% respectively.
Beach plunged on the back of Clough Ltd's collapse.
The Western Australian building and engineering company collapsed after its $350 million lifeline ended when another firm pulled out of a merger deal.
Clough Group is now in voluntary administration leaving 1,250 employees wondering what’s next.
Clough released a statement saying the administration process “provides for the possibility of compromise with creditors, through adoption of a Deed of Company Arrangement, a binding arrangement between the company and its creditors governing how the company’s affairs will be dealt with”.
Voluntary administrator and Deloitte Turnaround & Restructuring partner Sal Algeri said in a statement to news.com.au: “With our appointment, over the next two to three days, we will carry out an urgent assessment of the financial position of the Clough Group companies, with a view to sourcing immediate interim funding to be able to continue work on as many projects as possible as quickly as possible.
“An accelerated sale and recapitalisation process will also commence.”
Beach investors are now concerned over the company’s ability to deliver the Waitsia gas project in WA. Clough was a chief contractor on the facility.
Looking at the sectors, only Materials was in the green, lifting 0.60%. The biggest fall was Information technology which lost 3.09% with Energy losing 1.73%, possibly after the Federal Government hinted it wants NSW and Queensland to cap domestic coal prices at $125 a tonne. The government is set to announce a cap on gas prices of $13 per gigajoule in a bid to reduce power prices.
Making news today
Australia performing well but slowdown will come
GDP rose 0.6% in the September quarter prompting Commonwealth Bank economist Gareth Aird to say the Australian economy was running at full capacity.
Data shows household spending holding up but it predates most of the RBA’s 300 basis points of rate hikes.
"The reduction in the savings rate to close to its pre‑pandemic average means the capacity of households to spend from here is more aligned with growth in income than savings accumulated during the pandemic," Aird said.
"The very pessimistic levels of consumer sentiment implies the tailwind on the economy from pent up savings has probably run its course."
Aird believes the economy will slow significantly next year as rate hikes kick in.
"In addition, the big volume of fixed-rate loans due to expire will create an additional wave of de‑facto tightening on the Australian household sector. Many businesses also need to contend with substantially higher interest payments.”
Business Council chief executive Jennifer Westacott agreed Australia was performing better than most, saying reform is needed to protect the country from global uncertainty.
“Today’s national accounts have some good news with workers getting more money in their pockets, but there are storm clouds on the horizon," she said.
“Wages are coming back but relying on labour shortages and a tight jobs market isn’t sustainable, the only way to ensure Australians can get ahead is with a clear focus on reform that drives productivity.
“If we don’t act to lift productivity by driving investment, innovation and new industries, the hip pocket gains for Australians will be short-lived and they’ll continue to fall behind."
Westacott said the government must "pull every lever to boost our competitiveness and attract new investment".
“We can’t control the global economy, but we can act at home to skill Australians, drive investment and supercharge the local economy.
“New complex workplace relations laws and the prospect of big intervention in energy markets risk adding to the uncertainty plaguing the global economy."
What’s happening in crypto
eToro's market analyst and crypto expert Simon Peters lends his views on the state of crypto and blockchain.
Bitcoin in the doldrums
The price of bitcoin was largely stable last week as it entered a third week of trading around the US$17,000 mark. The price of the cryptoasset has remained highly becalmed in the wake of the big sell-off in early November and appears somewhat in the doldrums at this point.
Ethereum meanwhile saw some price movement last week, beginning below US$1,160 before rising above US$1,275 by yesterday. It is currently trading back down around US$1,250.
"We’re now also at the time of year where price predictions for the year ahead are coming thick and fast. Perhaps the most eye-catching has come in from Standard Chartered (LON:STAN) which sees the price going to US$5,000 next year.
"These kinds of predictions and price guides should be taken with a heavy pinch of salt though and investors should always focus on the long-term use cases for the assets which they are holding.
"Bitcoin has been sensitive to major macro trends in 2022 and this could likely continue next year. But with a fresh halving on the horizon, some momentum may begin to shift in due course."
UK Government steps up crypto regulation efforts
The UK Government is expediting its crypto regulation efforts in the wake of the crises of the past few months, according to reports in the Financial Times. The process of codifying rules for the sector was already underway through the Financial Services and Markets Bill but it looks like the timeline is being brought forward and more specific rules could now be brought in.
This is a positive development for the sector after what has been a difficult few months for many market participants, from investors to institutions. Regulatory clarity in the UK will promote much greater stability for those participants so the outcome of regulatory clarity is definitely desirable for the sector.
These rules will quite likely define the landscape of crypto in the UK for years to come. It is essential that users be protected while the sector is allowed to continue to innovate. The Government should avoid knee-jerk reactions but comments from the Treasury at this point are encouraging that this won’t be the case.
Bitcoin mining difficulty plunges
The difficulty of mining new bitcoins has plummeted by more than 7%, its largest fall of the year, and biggest drop since July 2021, according to BTC.com data.
The mining difficulty has come off all-time highs last month as the cryptoasset grapples with declining prices. Miners are also facing headwinds from rising energy costs, especially as we head into winter.
While it is instructive of the health of the network - the difficulty rises and falls depending on the number of miners operating - it is also a lagging indicator of the market. But with the bitcoin price in the doldrums still, it could be some time before miners start turning rigs on again.
Goldman Sachs (NYSE:NYSE:GS) on the hunt for crypto bargains
Major global investment bank Goldman Sachs (NYSE:GS) is on the lookout for crypto firms with depressed valuations to snap up, reports in Reuters today suggest. It marks another interesting signal that while the market reels, smart buyers are looking to make plays into the sector.
It follows the news last week that Goldman Sachs was launching a digital assets platform with the European Investment Bank (EIB) which will enable the instantaneous settlement of digital asset sales such as bond auctions.
What is clear here is that the market valuations of cryptoassets are being largely bypassed by investors looking to snap up deals and buy into projects at favourable valuations. This is a pretty typical modus operandi for a major player such as Goldman and can perhaps give investors some comfort that they’re not the only ones prepared to wait out the crypto winter.
Five at five
Legacy Minerals set for initial diamond drill campaign targeting gold-silver at Bauloora
Legacy Minerals Ltd (ASX:LGM) is preparing to kick off its maiden diamond drilling program into the Mee Mar gold vein trend at Bauloora Project in the prolific Lachlan Fold Belt of New South Wales.
Read more
Spenda shares surge after signing a deal with Carpet Court to roll out payment platform
Spenda Ltd (ASX:SPX) shares surged 22% higher intra-day to 1.1 cents after signing a deal with Carpet Court to deliver an optimised payment solution across all Carpet Court member stores, with target integration by April 2023.
Read more
Venture Minerals partner Chalice begins EM surveys at South West Project to delineate nickel-copper-PGE targets for drilling
Venture Minerals Limited (ASX:VMS, OTC:VTMLF) partner Chalice Mining has kicked off ground and airborne electromagnetic (EM) surveys as well as a geochemical sampling program aimed at delineating existing targets and potentially identifying new targets for future drill testing at the South West Project in Western Australia.
Read more
Creso Pharma subsidiary Halucenex doses first patient in Lucenex Phase 2 trial targeting PTSD
Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) welcomes the news that wholly-owned, Canadian-based psychedelics company Halucenex Life Sciences Inc has successfully administered first doses of its Lucenex branded 10mg and 25mg synthetic psilocybin formulation.
Read more
Tietto Minerals hits 184.55 g/t gold in step-out drilling at Abujar’s South Gamina
Tietto Minerals Ltd (ASX:TIE) has added more shallow high-grade visible gold results from step-out and depth extensional drilling completed at South Gamina (SG), part of its 3.45-million-ounce Abujar Gold Project in Côte d’Ivoire.
Read more
On your six
Cyber hygiene: how to create a safe password
In light of the barrage of cyber-attacks that shook the nation over the past few months, it's about time we re-examined the integrity of our passwords.
Read more
The one to watch
Great Boulder hits more high-grade gold at Mulga Bill
Great Boulder Resources Ltd (ASX:GBR) managing director Andrew Paterson says recent exploration at the Side Well Gold Project near Meekatharra in Western Australia has returned further strong results.
Watch