The ASX spent the morning confirming that gravity exists, with a mighty demonstration of the ancient adage that states “what goes up, must come down”.
On the heels of a cracker of a Thursday, local investors were nursing a bit of a hangover Friday morning, and the benchmark is -0.5% worse off because of it.
I’ll get into the details of why that might be happening shortly…
But first, to news from the US state of Massachusetts, where locals had their lives changed forever last year with the introduction of legalised sports betting.
I know, I know… you’re probably wondering how such a paradise could exist, wistfully imagine an ad-break on commercial TV that doesn’t not-very-subtley question your masculinity for not “having a punt with the lads”.
But, I am talking about America… a land of awe-inspiring contradictions, plentiful guns and and quantum-level lawmakers who are able to embody two equally strong, yet oppposing, obsessions:
Defending to the death their rights and personal freedoms, and
Finding out what their neighbours are doing and figuring out how to stop them.
Prior to that year, putting a bet on the footy in Massachusetts was very, very much against the law – but lobbying eventually turned the state government’s stance around, despite opposition to the measure from sectors of the community that were worried that increased access to gambling would, in turn, lead to an increase in gambling problems.
Supporters of the sports betting industry pointed out that Massachusetts already had a gambling hotline, for people to call up if their gambling was turning into a problem, the measure passed, and the state was off to the proverbial races.
Sports betting hit the state’s casinos on 31 January, 2023, and mobile sports betting kicked off a few months later on 10 March – and recently, some truly alarming statistics have come to light.
The state’s gambling hotline has seen an enormous influx of calls, and a quick check of the numbers showed a 121% increase in calls from July 2022 to June 2023, leading many to believe that perhaps the wowsers were right, and the state’s population couldn’t be trusted with the kind of life-destroying power that can come from putting a multi together while you’re sitting on the bog.
There was a 41% increase in referrals to treatment and a 40% increase in calls looking for help for a loved one, and an alarming spike in calls from men aged 30-39 whose gambling had spiralled well out of control.
But the good news is that while those increases are something of a sign that legalised sports betting is a cancerous blight on the community, it might not be quite as bad as it seems.
Because it turns out that the people of Massachusetts aren’t gambling addicts… they’re just helplessly, recklessly stupid.
Of the 2,069 calls made to the state gambling hotline, from February to June 2023, 1,043 – more than half of the calls – were from people asking for technical assistance with the sports betting app on their phone.
In other words, a very good sign that maybe the people of Massachusetts really weren’t ready for this kind of gambling after all.
TO MARKETS
Local markets are singin’ the blues this morning, after a see-sawing session on Wall Street overnight that saw another record high, and a day that somehow still managed to end in the trenches.
Heavy bleeding in the local Health Care sector, combined with Consumer Discretionary, InfoTech and Real Estate apparently losing the will to live have dragged the benchmark lower, leaving the Materials sector to battle valiantly while the rest of the market scuttles to an inglorious retreat.
Chart via Martketindex.com.au
A look at the ASX indices shows that Resources is the only area still doing better than breaking even, and that’s most likely off the back of strong performances from iron ore miners and the ASX’s lithium players.
Chart via Martketindex.com.au
Broadly speaking, though, it looks like this morning was one of those mornings where things are moving in mysterious ways, with one of the only large caps in among the top gainers proof of that theory.
Bendigo and Adelaide Bank (ASX:BEN) released a trading update on Friday morning, that was short and to the point: “Unaudited cash earnings (after tax) year-to-date (YTD) of approximately $464 million, down 2.3% on prior corresponding period.”
Bendigo and Adelaide Bank was up +7.8% at lunch time, which is the opposite of where I was expecting to go, yet here we are.
The other big player in the headlines, Vulcan Energy Resources (ASX:VUL), climbed on Friday morning after announcing that the final financing phase of of its project-level debt and equity funding package has been launched.
Vulcan is looking to secure funding through a 65%:35% mix of debt and equity, and the second phase – a formal debt launch package – was issued today, with negotiations among Tier 1 partners who have expressed in-principle and non-binding interest set to begin shortly.
NOT THE ASX
In the US overnight, the banner headline was venerable the Dow Jones index breaking through 40,000 points for the first time in its existence.
The Dow’s time in that rarified air was, however, quite short and word on the street is that the index emerged from its burrow, saw its own shadow and scurried away again, which as we all know means another six weeks of chaos in New York.
By the end of the session, the Dow closed -0.1% lower at 39,869. The S&P 500 was also down by -0.21%, while the tech heavy Nasdaq fell by -0.26%.
That’s most likely because perennial party-poopers from The US Fed were out in droves overnight, with three officials – Loretta Mester, Thomas Barkin, and John Williams – all saying that the central bank should be in no hurry to raise rates, and that it should keep rates high for a bit longer as it waits for more signs that inflation is cooling down.
In US Stock news, OpenAI has just made a deal to access real-time content from Reddit‘s data API. This means ChatGPT and other new products can now include Reddit discussions. Reddit’s shares gained +9% on the news.
Walmart jumped +7% after reporting that sales at stores open for at least a year went up by 3.8% in the latest quarter compared to the same time last year. The company also raised its sales and profit forecasts for the year.
Meta Platforms fell -1.7% after it was revealed that the European Union was investigating whether the company’s algorithms are taking advantage of kids to get them hooked on Facebook and Instagram.
Meanwhile, Gamestop crashed by 30% and AMC Entertainment plunged by -15% as the meme stocks frenzy faded and a lot of people failed to learn their lesson. Again.
ASX SMALL CAP WINNERS
Here are the best performing ASX small cap stocks for 17 May [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Last % Volume Market Cap APC Aust Potash Ltd 0.0015 50% 375,612 $4,000,189 NC6 Nanollose Limited 0.032 39% 225,424 $3,956,146 HLX Helix Resources 0.0055 38% 22,563,764 $9,292,583 POS Poseidon Nick Ltd 0.0055 38% 7,514,056 $14,854,139 AON Apollo Minerals Ltd 0.029 32% 520,802 $15,319,544 KP2 Kore Potash PLC 0.018 29% 1,431,347 $9,215,703 REM Remsensetechnologies 0.025 25% 600,040 $2,997,194 RML Resolution Minerals 0.0025 25% 372,499 $3,220,044 PNN Power Minerals Ltd 0.165 22% 1,742,605 $12,501,680 SUM Summitminerals 0.195 22% 4,850,061 $7,625,140 KLI Killiresources 0.046 21% 797,720 $3,068,502 PPY Papyrus Australia 0.012 20% 386,200 $4,926,926 LPE Locality Planning 0.1 18% 1,975,602 $15,317,375 PH2 Pure Hydrogen Corp 0.17 17% 3,146,112 $51,979,719 EMU EMU NL 0.035 17% 417,036 $2,024,789 CCO The Calmer Co Int 0.007 17% 4,652,936 $8,165,278 ICG Inca Minerals Ltd 0.007 17% 504,658 $4,828,433 SFG Seafarms Group Ltd 0.0035 17% 30,000 $14,509,798 TSL Titanium Sands Ltd 0.007 17% 900,127 $13,270,483 TMX Terrain Minerals 0.004 14% 300,000 $5,010,847 RCR Rincon 0.125 14% 3,474,761 $25,553,625 NMR Native Mineral Res 0.025 14% 760,692 $4,616,711 RRR Revolverresources 0.092 14% 661,517 $21,029,565 SS1 Sun Silver Limited 0.605 13% 6,530,419 $37,278,265 KOB Kobaresourceslimited 0.13 13% 72,910 $18,234,586
Helix Resources (ASX:HLX) built on gains from earlier in the week on Friday morning, after announcing that a rights issue seeking to raise $2.3 million has closed heavily oversubscribed, with an extra $0.5 million likely to be accepted to meet the excess demand.
Nickel hunter Poseidon Nickel (ASX:POS) announced it has recommenced greenfields exploration activities at Lake Johnston, following a four-month hiatus whilst the company was focused on the Lake Johnston sales process.
In particular, the company says that it’s ready to start renewed exploration around numerous pegmatites identified near an “exciting broad, coherent >100ppm Li2O anomaly”, which the company already informed the market about in January of this year.
Power Minerals (ASX:PNN) was up on Friday morning on news that it has entered into a Binding Term Sheet and Convertible Loan Agreement for the strategic funding and development of the Rincon Project at its Salta Lithium Project in Argentina.
Power will receive initial strategic funding of US$5 million, in two tranches, from Singaporean entities Repenergy Investment Private and Legendary Star Investment Asia, alongside Chinese entity Li Energy Technology.
And Locality Planning Energy (ASX:LPE) was up Friday after announcing updated guidance to the ASX, telling investors that the company is now expecting a significant improvement in net profit to the range of $1.95m to $2.0m, and offereds EBITDA guidance between $3.3 million and $3.5 million, which is loads better than the company’s net loss of $12 million for FY23.
ASX SMALL CAP LOSERS
Here are the most-worst performing ASX small cap stocks for 17 May [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
Code Company Price % Volume Market Cap IEC Intra Energy Corp 0.002 -33% 2,701,597 $5,072,345 SIH Sihayo Gold Limited 0.002 -33% 1,060,128 $36,612,769 EDE Eden Inv Ltd 0.0015 -25% 12,055 $7,356,542 MSI Multistack Internat. 0.01 -23% 982 $1,771,951 MKT The Market Limited 0.155 -23% 20,000 $64,194,516 SP8 Streamplay Studio 0.007 -22% 452,023 $10,355,614 KPO Kalina Power Limited 0.004 -20% 1,187,105 $12,431,970 FTL Firetail Resources 0.05 -17% 10,000 $8,934,333 HIQ Hitiq Limited 0.015 -17% 673,908 $6,333,209 LPD Lepidico Ltd 0.0025 -17% 1,524,365 $25,767,358 ME1 Melodiol Glb Health 0.0025 -17% 1,536,549 $2,140,462 MTL Mantle Minerals Ltd 0.0025 -17% 250,667 $18,592,338 ASR Asra Minerals Ltd 0.006 -14% 4,037,436 $11,647,970 EMP Emperor Energy Ltd 0.012 -14% 1,800,319 $5,368,507 BGE Bridgesaaslimited 0.019 -14% 231,056 $2,626,735 RMI Resource Mining Corp 0.019 -14% 1,026,994 $14,131,652 AQD Ausquest Limited 0.014 -13% 856,564 $13,202,388 AQX Alice Queen Ltd 0.007 -13% 150,000 $5,527,921 BFC Beston Global Ltd 0.0035 -13% 44,879 $7,988,188 CMB Cambium Bio Limited 0.007 -13% 221,935 $6,128,738 HHR Hartshead Resources 0.007 -13% 8,810,000 $22,469,457 ODE Odessa Minerals Ltd 0.0035 -13% 1,150,954 $4,173,130 AFL Af Legal Group Ltd 0.14 -13% 266 $14,607,873 OIL Optiscan Imaging 0.105 -13% 137,055 $100,240,896 ILT Iltani Resources Lim 0.3 -12% 757,595 $11,563,572
ICYMI – AM EDITION
Blue Star Helium (ASX:BNL) has spudded the State 16 SWSE 3054 helium development well at its Galactica project in Las Animas County, Colorado.
The well is expected to take 5-7 days to reach the projected total depth, following which the company will carry out wireline logging and testing of the target Lyons reservoir.
Galactica is part of the broader Galactica/Pegasus development where four exploration wells have already proven its helium credentials after returning strong helium concentrations of 2-6.1% along with gas flow rates of between 125,000 and 412,000 cubic feet per day.
Impact Minerals (ASX:IPT) is now funded to complete the pre-feasibility study for its Lake Hope high purity alumina project on the border of WA’s Goldfields and Wheatbelt regions after raising $3m through a strategic placement.
The placement of 150 million shares priced at 2c each was made to sophisticated investors and includes the issue of one free attaching option exercisable at 2.7c and expiring 15 months from the date of issue for every three shares subscribed for.
“We are now very well-funded to complete the pre-feasibility study on our unique Lake Hope high purity alumina project located here in Western Australia by the end of this year,” managing director Mike Jones said.
At Stockhead, we tell it like it is. While Blue Star Helium and Impact Minerals are Stockhead advertisers, they did not sponsor this article.
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