Zip soars 17% but miners keep ASX flat

Market volatility up as ASX finishes flat, Zip Co jumps 17%, Cleanaway’s new deal

The ASX200 (ASX:XJO) finished flat for the day with gains in the IT sector, which was 2.2% higher, insufficient to offset weakness across cyclical businesses including energy, -0.7%, and utilities, -1.1%.

The standout by far was Buy Now Pay Later firm Zip Co (ASX:Z1P) which jumped 16.9% after a stunning quarterly update. (I own shares in Z1P).

The company reported an 80% increase in revenue for the quarter, jumping to $114.4 million on the back of another 114% increase in transaction volumes through their platform to $1.6 billion.

The US business has nearly overtaken Australia when it comes to revenue contribution, with Quadpay seeing 188% growth in revenue and a 234% increase in transactions.

Australian volumes were up a more ‘modest’ 61%. Bad debts also reduced from 1.93% to 1.78% of their loan book in a positive sign for shareholders.

Sticking with the theme of good news, NAB’s Business Confidence survey hit a record of 25 points, and so it should.

Large businesses are flushed with cash following 2020’s JobKeeper support and capital raisings, which when combined with near-zero borrowing rates may represent the best conditions in decades.

Cleanaway out of Suez, Blackstone amends Crown terms, ETFs hit $100 billion 

Crown Ltd (ASX:CWN) fell 0.2% as news was released confirming that Blackstone had amended the terms of their conditional offer for the company.

In light of the ongoing inquiries in both WA and Victoria, the group has included terms indicating they will not proceed if the company’s casino licenses are threatened or not granted or if any other ‘material adverse change’ occurs.

On the positive side, Cleanaway’s target Suez has agreed to be acquired by French giant Veolia, ending the ill-fated attempt to acquire their Australian operations.

Cleanaway did, however, managed to negotiate the purchase of two NSW landfills and five transfer stations that fill a number of gaps in their collection activities; the market responded by sending the share 2.4% higher (again, I own shares in CWY).

After seeing some $33 billion in capital flows during the volatility of 2020, the exchange traded fund market has finally reached $100 billion in 2021, with BetaShares predicting another 25% growth before the year is out.

Two records, inflation on the way up, Uber’s record month

Both the Nasdaq and S&P500 hit record highs overnight, adding 1.1% and 0.3% respectively, as bond yields continued to fall.

This comes despite news overnight that the US inflation rate had jumped significantly in March to 2.6%, well above the 1.7% in February and sub 1% figures from 2020. 

Predictably, the rise was almost solely due to energy costs, including fuel and electricity, as conditions return to normal in the world’s biggest economy.

Rather than showing concern, this reiterated the Federal Reserve’s recent comments that inflation should be expected, but that they would not be raising rates unless it was out of control.

According to Bloomberg, traders are now more concerned about inflation and higher rates than the Coronavirus.

Johnson & Johnson (NYSE:JNJ) was forced to pause the rollout of its vaccine over blood clot issues at the same time Biden confirmed he had enough vaccines for the entire country.

Rideshare and food delivery platform Uber Technologies (NYSE:UBER) jumped 2.1% after reporting record annualised bookings in March of $52 billion and suggesting the company could reach breakeven far quicker than expected in 2021.