Food costs hit 9% for December

The ASX started the week flat with the Tech sector the shining light after the NASDAQ rose by 2.6% on Friday trade in the United States. The ASX ended the day the day 5.10 pts higher, to close at 7,457.30. The Tech sector rose by 1.31% with Block (+6.1%), Altium (+1.4%) and Xero (+1.4%) some of the big movers on the index.

Energy was another sector that rose today, ending the day 0.86% higher. There were five sectors which ended the day in the red, with Utilities falling by -0.5% to be the biggest faller on the day.

Battery Mineral companies were another that had a positive day's trade, as brokers upgraded their ratings. Some of the big winners were Pilbara Minerals (+6.2%), Core Lithium (+5.7%), and Allkem (+4.2%).

A busy week overseas as some of heavy hitters in United States will report this week including Microsoft (Tuesday) and Tesla (Wednesday) as the busy season commences. Alphabet is scheduled to report on 30th January with Apple and Amazon set for February 2.

Both Karoon Energy and Liontown Resources saw their share prices increase by 7.41% and 6.91% respectively, making them the best performing companies in this index.

Quick Singles

• Serkos (ASX: SKO) share price increased by 11.6% to $2.11 after the company raised its revenue projection for FY23 due to stronger-than-expected revenue performance in its key markets.

• Perpetual (ASX: PPT) rose by 2% to $26.7 following the completion of its massive acquisition of Pendal Group Ltd. (ASX: PDL)

• Booktopia Group Ltd (ASX: BKG) increased its share price by 34.2% to $0.28 after announcing plans to increase earnings by $12 - $15 million.

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Top Story

Food costs continue to rise

A UBS study reported today indicated that food costs at the two major supermarket chains Woolworths (ASX:WOW) and Coles (ASX:COL) increased by an average of 9.2% during the December quarter, accelerating from an average increase of 8.2% during the September quarter.

Broker UBS, who analysed the costs of more than 60,000 food items, reported that fresh food inflation was the steepest, followed by dairy and meat. According to the Australian Bureau of Statistics (ABS), food and grocery price increases have been a major contribution to Australia's three-decade high inflation rate, which reached 7.3% in November-22 (ABS).

In the December quarter, the inflation rate for fresh foods was 9.6%, while the inflation rate for dry food items was slightly less at 9%. UBS data indicated that supermarket price increases have intensified over the past three months of 2022, with Woolworths leading the way. Wednesday will see the release of the latest official inflation numbers, which are widely anticipated to reveal that consumer prices grew 7.5% year-over-year through December.

Movers and Shakers

✅Biggest Winners

Sezzle (ASX: SZL) share price was up 38.9% to $0.75. This was due to the buy now pay later (BNPL) provider's trade update this morning. Sezzle reported that in the month of December, it had accomplished its second consecutive profitable month. This was supported by a 15.7% increase in revenue year-over-year to $19.9 million in December.

Zip Co (ASX: ZIP) share price was up 22.8% to $0.84, likely due to the positive report released by Sezzle this morning. Zip has also been the target of shorting in recent times and is consistently one of the top 20 most shorted stocks on the ASX. Today's price increase may also have been the result of a 'short squeeze'.

❌ Biggest Losers 

Stanmore Resources (ASX: SMR) share price fell 6.6% to $3.42. This followed the release of the coal miner's update for the fourth quarter. Even though Stanmore met its second-half guidance, investors were quick to sell the stock. Stanmore delivered 6.4 Mt for the quarter, in the middle of its projections of 6Mt to 6.6Mt.

Fisher & Paykel Healthcare (ASX: FPH) decreased by over 2.8% to $23.63 likely driven by a broker downgrade released by Citi Group this morning. Following a three-month rally, analysts have reduced the medical device company's stock to a neutral recommendation on valuation reasons.

Small-Cap of the Day

Laybay Holdings requests ASX removal

The trading of Laybuy Holding shares (ASX:LBY) has been halted this morning after submitting an application this morning to be removed from the ASX. It comes after a difficult stretch for the stock experienced by most other BNPL peers. In the past year, the share price of Laybuy has decreased by 69%, closing at price of 6 cents on Friday.

Econcomic Calender

Outlook

CPI in Australia gets reported on Wednesday whilst housing data in the US is the big new from an economic front this week.

24th January

• AU NAB Business confidence

25th January

• AU CPI Q4 - est. 7.5%

26th January

• US Jobless claims

• US Durable goods

• US Single home sales

28th January

• US Pending home sales

That's it from the team at ASX-News today. We hope you enjoyed our EOD wrap-up. Good night and happy investing!