GDP Falls 7% as Aussie Economy Is Hit and Yet Small-Caps Are Booming

By ,

The economy has been ‘savaged’ according to Prime Minister Scott Morrison.

Confirming the news that we all knew was coming. Australia has now officially recorded its first technical recession in 29 years.

An incredible, record-breaking run finally snuffed out.

And it has been a brutal end to the run at that.

GDP has fallen 7% in the June quarter. The worst result on record, with annual growth at its lowest point since the Second World War.

Suffice to say, it’s been a grim shock.

But, no one needs to be told that. After all, we’ve all been living through it.

Yet, you’d be forgiven for thinking there was no recession at all when you look at the state of small-caps…

Extraordinary times, extraordinary opportunities

As we’ve continued to highlight amidst this whole recession (and pandemic), certain small-caps are recording blistering gains.

Nearly every day, some small-cap seems to be lighting up the ASX.

As can be seen with the likes of BrainChip Holdings Ltd [ASX:BRN] today. Or even Pointerra Ltd [ASX:3DP] yesterday. Or the dozens of other stocks we’ve covered over the past few months.

Point is, small-caps are crushing it.

And they may only be just getting started…

Last week for instance, I talked about today. Noting that the inevitable recession was on its way. All we were waiting on was a figure to gauge how bad it would be.

Turns out, it’s pretty bad.

As I noted at the time though; good, bad, or ugly, the result is irrelevant. What matters is what comes after the recession: the recovery. A period that historically has favoured small-caps extremely generously.

For more details check out my article from last week, here.

Because you should see today’s news not as a sign to panic. Rather, it is an opportunity. The first opportunity of its kind to grace the Australian market in nearly three decades!

Small-caps are booming right now, but the best may be yet to come.

With a whole cohort of individual companies or entire sectors likely to play key roles in our recovery. Right now, for example, we’re seeing a massive tech boom. Whether that will continue forward remains to be seen.

One way or another though, there will likely be massive gains up for grabs.

Take our report covering three ‘explosive small-caps’ for instance. A detailed look at stocks at the heart of major trends that could become cornerstones of our future economy.

Read all about them, right here.

It is these kinds of opportunities that investors need to be on the lookout for. The kind of returns that are (usually) only seen in the wake of a major recession.

Now is not the time to be on the sidelines. It is time to prepare for a small-cap bonanza.


Ryan Clarkson-Ledward,
For Money Morning

About Ryan Clarkson-Ledward

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor…

AVZ Minerals Extends Voluntary Suspension

Lithium developer AVZ Minerals [ASX:AVZ] has extended its voluntary suspension on Friday as it continues to work through regulatory and ownership issues concerning its Manono Lithium Project.

OpenPay Shares Jump 25% as BNPL Firm Pauses US Operations

Openpay Group [ASX:OPY] is suspending its US operations indefinitely and materially reducing its US staff as the buy now, pay later (BNPL) stock continues to scale down to drive down costs.

The Fed Finally Admits It Is Clueless

These are the direct words from Jerome Powell at his recent ECB forum appearance, ‘We now understand better, how little we understand about inflation.’

Argosy Shares Rise on Rincon Construction Update

Argosy Minerals [ASX:AGY] shares rose 6% after an update on its Rincon Lithium Project operations in Argentina.

Betmakers Shares Flat on Penn National Deal

Betting tech provider BetMakers Technology Group [ASX:BET] has signed a data and vision content deal with Penn National Gaming.

Why Investors Can’t Afford to Ignore South East Asia and India

What do you think was the biggest factor to the pre-pandemic bull market? It’s a question I’ve been asking myself recently. If you go purely by the stats, then the logical answer has to be the FAANG stocks. This cohort of the US’s biggest tech stocks — Facebook (Meta), Apple, Amazon, Netflix, and Google (Alphabet) … Read More