The inflation data in the US is finally starting to look positive. After a year of very high inflation, things are finally settling down. This could be good news for some ASX shares.
According to reporting by CNBC, the consumer price index (CPI) dropped by 0.1% in December, which is what experts were largely anticipating.
Excluding food and energy, core CPI rose by 0.3%, which analysts were expecting as well.
Compared to a year ago, the headline CPI rose 6.5%, and core inflation was up 5.7%. Of course, that’s still plenty higher than the US Federal Reserve would like. But, month on month, things are looking promising.
Prices at the petrol pump were down by 9.4% for the month and are now down 1.5% year over year, according to CNBC.
While petrol was a core factor in the decline, which isn’t likely to be repeated every month, lower petrol prices can help lower inflation in other areas, such as transport and delivery.
With the inflation picture looking better, this could give the US Federal Reserve some food for thought about how high interest rates need to go. But, there is a risk that company earnings could be impacted by the trickier economic picture because of higher interest rates.
With the prospect of lowering US inflation, I think these three ASX shares are buys after dropping significantly:
Betashares Nasdaq 100 ETF (ASX: NDQ)
This exchange-traded fund (ETF) gives investors the ability to invest in 100 of the largest non-financial businesses on the NASDAQ.
Many readers have probably heard of a number of the ASX ETF’s holdings, including Microsoft, Apple, Amazon.com, Alphabet, Nvidia, Meta Platforms, Tesla, PepsiCo and Costco.
The rising interest rates appear to have hurt the valuation of many of those big names. Interest rates hitting a peak could give investors some more confidence.
While the short-term economic outlook is uncertain, I think plenty of the names I’ve mentioned are among the best globally at what they do. In my opinion, as a group of businesses, the NASDAQ 100 can keep performing well and growing globally if they invest in their current products and services while occasionally starting a new service.
After dropping around 30% since the end of 2021, this is why I think the ETF looks compelling.
Betashares Global Cybersecurity ETF (ASX: HACK)
This ASX share is another ETF full of leading companies. While many positions aren’t household names, they represent some of the global leaders when it comes to cybersecurity.
In an increasingly digital world, protecting data, intellectual property and so on is vitally important. Just look at the reputational damage done by the hacks of Optus and Medibank Private Limited (ASX: MPL) last year.
I believe the cybersecurity sector can continue to achieve higher revenue and earnings as demand increases. As cybercriminals improve their capabilities, businesses and organizations will want to make sure their cyber protections are advancing as well.
After a 26% fall over the past year, this ETF looks to me like an attractive long-term option.
Altium Limited (ASX: ALU)
Altium is one of the leading ASX tech shares in my opinion. It is a world-leading electronic PCB design software business.
The company is also becoming increasingly involved in other elements of the electronics world. For example, it has Octopart (an electrical part search engine) and Altimade (PCB manufacturing on demand).
Altium is indirectly benefiting from the world becoming more electronic and advanced. It has a number of high-profile clients like Apple, Microsoft, Tesla, Space X, NASA, Cochlear Limited (ASX: COH) and Amazon.com.
With the West’s improving relations with China, there is a good chance that Altium’s earnings can increase in the country as well.
The Altium share price is down around 20% since the end of 2021, so it looks better value. Management expects both revenue and the earnings before interest, tax, depreciation and amortization (EBITDA) margin to grow in the next few years.