Market Updates

ASX 200closed up 62 points to 7402 (+0.9%), hitting a five-month high, while the Aussie dollar and bond yields fell on softer-then-expected inflation data reducing pressure on the RBA to tighten policy further. Miners continued their rally today on China’s stimulus pledge, sector majors BHP up 2.3%, RIO gained 1.4% and FMG up 2.3%. Banks up today, recovering yesterday’s losses, with the big four all in positive territory, all gaining over 1.5%. Big Bank Basket up to $180.59 (+1.1%). Tech stocks good, WTC +2.4%, ALU +1.9%, and XRO up 0.7%. Consumer discretionary sector jumped on inflation results, LOV up 3.6%, PMV up 2.8% and WES +1.1%. Energy stocks energetic, BPT up 6.9%, STX +2.3%, and WHC gained 1.8%. Gold struggling to find momentum ahead of Fed meeting tonight. Healthcare sector continues to struggle, CSL off 1.0%. REITS down despite a fall in bond yields, GMG and SCG both down 1.1%. Lithium miners clocked a second great day, with LTR, AKE and PLS up another 1.4%, 2.5%, and 4.6%, respectively.

In corporate news, KGN jumped 10.0% on good results, BGL down 0.3% on construction update, CTD +0.9% on increased EBITDA guidance, MIN up 4.1% despite missing lithium shipments guidance, ASB fell 10.5% after lowering FY EBIT guidance, and CAT rose 5.7% after reporting a 20% growth in revenue.

In economics, local inflation cools down. Q2 CPI fell to 6.0%, beating expectations of 6.2%, down from 7% in the previous quarter. Monthly CPI came in lower as well at 5.4% in June from 5.5% in May, matching expectations. Bond traders pricing in a 54% chance of a rate hike by the RBA next week. Asian markets are down letting go of yesterday’s gains, Japan down 0.1%, HK off 0.7%, with China slipping 0.5%. Australia’s 10Y yield down to 4.01%. Dow Jones futures down 24 points, and Nasdaq futures down 28 points.

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Wall Street closed higher overnight, led by the NASDAQ amid excitement about AI before earnings reports from tech mega-cap companies Google and Microsoft after the bell. Dow Jones finished 27 points higher (+0.08%), marking its longest winning streak in more than six years and the 12th consecutive session of gains just shy of the all-time record of 13 set in 1987. Dow at worst down 46 points. Dow at best up 116 points. Meanwhile, S&P 500 rose 0.28% despite most of its 11 sectors being subdued, and the NASDAQ gained 0.61%. Approximately 25% of S&P 500 companies have reported Q2 results nearly 79% surpassed EPS expectations. Aggregate earnings are beating expectations by 6.8%, slightly below the 8.4% five-year average. US treasury yields advanced. USD Index closed flat, losing earlier session gains, and Gold strengthened as the dollar fell. Among stocks, GE rose 6.2% on higher profit outlook. General Motors fell 3.6% despite lifted profit guidance and cost cuts, and Spotify tumbled 14.3% on weak revenue and guidance.

• ASX to rise. SPI Futures up 19 points (+0.26%)

European markets were mostly up, led by miners logging their best day in over eight months after China pledged more support for its slowing economy. STOXX 600 +0.48%, FTSE 100 +0.17%, DAX +0.13%, and CAC 40 -0.16%. Asian markets are up, with Greater China markets surging, reacting positively to Beijing’s latest support signals, Hang Seng +4.1%, Shanghai +2.12%, Shenzhen +2.51%, and ChiNext +2.1%.

• Russell 2000 +0.02%
• US consumer confidence reached a two-year high in July, rising to 117, beating consensus for 110.5, indicating a positive outlook for the economy in the near term.
• Gold rose 0.52% as the dollar steadies and Fed meeting draws nearer.
• Copper rose 1.63% and base metals gain on China stimulus hopes.
• Nickel +5.51% Aluminium +1.27% Zinc +2.88%, Lead +0.32% Tin +0.56%
• WTI and Brent rose 1.14% and 0.72% as Saudia oil exports drop 40% YoY.
• 10Y Bond Yields: US 3.89%, Australia 4.05%, and Germany 2.40%.

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 ASX 200 closed up 33 points to 7340 (+0.5%), snapping a two-day decline, led by miners and energy stocks, although investors exercised caution ahead of local quarterly CPI results and FOMC meeting both due on Wednesday. Iron ore miners led the advance, sector majors BHP, RIO and FMG up 3.3%, 3.4% and 4.6%, respectively. Energy stocks rose as oil prices extended gains, with WTI crude futures hovering around a 3-month high. Index heavyweights STO up 0.6% and WDS up 1.2%. Lithium miners did well, MIN up 3.9%, AKE up 2.3%, and PLS gained 5.2% despite reporting a 33% drop in spodumene prices in the June quarter. Bucking the trend, bank stocks slipped, with the big four all losing between 0.2% to 1.1%. Big Bank Basket down to $178.6 (-0.3%). Gold stocks edged higher, NST +0.3%, and EVN up 0.8%. Consumer discretionary was the worst-performing sector today, extending losses into afternoon trade down 0.8%. WES down 0.9%, ALL off 0.5% and JBH slipped 1.0%. Tech struggled, XRO down 1.2% and CPU off 0.8%.

In corporate news, 29M fell 6.6% after reporting lower total site costs at its Golden Grove mine in June quarter, COF -0.4% divests 35 Robina Town Centre Drive for $40m, MND +5.4% secured $200m contract with Albemarie, GNG up 3.8% secured $81m contract LOI from K92 mining and NCM off 0.1% despite reporting a 9% increase in gold production.

Nothing on the economic front. Asian markets higher, Japan up 0.2%, HK rose 3.7%, and China jumped 2%, rebounding sharply from multi-week lows after China pledged to 'ramp up policy' support for its struggling economy.  Australian treasury yields edge lower 10Y yield up 4bps to 4.03%. Dow Jones futures down 13 points and Nasdaq futures down 1 point.

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The Dow Jones led US markets higher overnight and notched its 11th straight session of gains, its longest winning streak in six years. Dow Jones up 184 points (+0.52%). Dow at best up 236 points. S&P 500 added 0.4% and the NASDAQ lagged the other indexes up 0.19% as the market looked for non-tech stocks for bargains, lifting energy and bank sectors. 10Y US bond yields closed higher up 3.9bps, rebounding from an early session decline, while the 2Y yield rose 7.7bps. The US dollar gained some ground against major currencies as the latest economic data continued to highlight the strength of the American economy in comparison to other countries. Prices of safe-haven gold were choppy as the dollar advanced, closing -0.29%. Among stocks, Mattel added 1.8% after “Barbie” movie gets the biggest opening of 2023, and Chevron rose 1.97% as the oil giant posted upbeat preliminary quarterly earnings over the weekend.

ASX to open higher. SPI Futures up 45 points (+0.56%).

• Russell 2000 +0.28%
• The likelihood of a 25bps hike at the FOMC meeting at 98.9%.
• The Nasdaq exchange operator cut the weight of key companies comprising almost half of the Nasdaq 100 index to address "over-concentration" in the benchmark.
• July S&P Global Flash Manufacturing PMI rose by 2.7 points to 49.0, beating estimates for a 0.2 point decline to 46.1, marking the highest print since April and ending three-straight monthly declines.
• Still to report this week as the earnings season continues, Alphabet, Meta, Microsoft, GE, 3M, General Motors, Boeing, and Amazon.

HEADLINES

• ASX to rise; Tech giant earnings under scrutiny.
• Global shares, U.S. yields rise as investors eye rates, earnings.
• Dow leads Wall Street higher as investors eye beyond tech.
• Dollar clings to gains with central banks in focus.
• U.S. business activity growth slows as services soften.
• Worsening euro zone business downturn reignites recession fears.
• UK firms grow at slowest in 6 months as rate hikes weigh, PMI.
• Twitter blue bird has flown as Musk says X logo is here.
• Meta's Threads could lure ads from Twitter but it's early days, analysts say.
• US FDIC calls on banks to fix 'inaccurate' financial statements.
• UBS agrees to pay $388 million over Credit Suisse's Archegos failings.
• US IRS ends policy of unannounced revenue officer visits to taxpayers.
• Boeing investors to scrutinize cost of new Spirit AeroSystems labor deal.
• US restaurants set for second-half profit boost as costs ease, demand stays firm.
• Adidas sees smaller 2023 loss thanks to Yeezy sales.
• China property giants tumble as cash crunch bites.
• Tesla to discuss factory plan for new $24,000 car with India commerce minister -source.

ON THE CALENDAR

• US reporting seasoning heating up. To see the Calendar, CLICK HERE.
• Local reporting season also kicking up a gear with NCM releasing today.

ECONOMIC FRONT

• Domestic data: n/a
• US data: S&P Global Composites Flash. CBI Business Optimism Index, CBI Industrial Trends Orders.

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ASX finished down 8 points to 7306 (-0.1%) in a subdued day of trading ahead of CPI release on Wednesday, with forecasts of a further decline in inflation MoM. Energy the biggest gainer as Crude continues to gain, WDS and STO both gaining 2.3% and 2.2%. Banks continuing to ease off from last week, while MQG gained 0.4% ahead of AGM on Wednesday. The Big Bank Basket fell to $179.2 (-0.2%) with CBA down 0.1% and ANZ off 0.2%. Insurers better with QBE up 0.1%. REITs gaining as bond yields fall with GMG up 0.9% and SCG up 1.5%.  Healthcare flat, held down by CSL down 0.3% while RMD and TLX gained 0.4% and 7.7%. Tech continuing to gain after last week’s run. TheAll-Tech Index up 0.4%, as WTC gained 1.9% and XRO dropped 1.2%. Resources are mostly down as China fails to stimulate demand BHP off 1.5% and RIO off 1.3%. Gold miners mostly down, EVN down 0.3% and NST dropping 0.7%. Base metal and lithium stocks hit hard, MIN -2.6%, PLS -5.8% and AKE -5.6%. In corporate news, CXO dropped 17.2% after releasing their quarterly results, failing to impress. S32 lost 2.6% after incurring a $US1.3bn non-cash impairment. On the economic front Aussie manufacturing PMI increased to 49.6, the highest in five months, but still indicating worsening business conditions. New Zealand’s trade surplus narrowed last month to NZ$9m. Asian markets mixed, Japan up 0.8%, HK down 1.9% and China off 0.1%. 10-year yields steady at 4%. Dow futures down 32 points. NASDAQ futures down 5 points

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The Dow Jones managed to inch higher, gaining 3 points (0.01%), marking its tenth consecutive day of advances and its longest rally in nearly six years. At its best, the Dow was up by 115 points, while at its worst, it faced a decline of 39 points. The S&P 500 saw a minor increase of 0.03%, while the NASDAQ suffered a 0.22% loss ahead of the Nasdaq 100 rebalance scheduled for Monday's market opening.

US reporting season now in full swing. American Express experienced a 3.9% drop after failing to meet quarterly revenue estimates. Netflix also faced a decline of 2.3% for the second consecutive day following their disappointing results. Both Nvidia and Meta fell more than 2% each in a volatile trading session.

HEADLINES

• ASX to lift as inflation data and Fed rate rises loom
• Fisher & Paykel Healthcare’s Donal O’Dwyer to retire.
• Global shares slip, dollar soars vs yen on BoJ policy expectations.
• Blinken says Ukraine has taken back 50% of territory that Russia seized.
• Elon Musk says Twitter's legacy blue bird to be replaced by an X.
• Tesla taps Biden tax credits to offset EV price cuts.
• US Commerce secretary still plans China trip despite hacking.
• 'Barbenheimer' frenzy gives sluggish summer box office a major boost.
• Copper fell 0.52% on disappointment over Chinese stimulus.
• Nickel -2.47% Aluminium +0.39% Zinc -0.55%, Lead +1.18% Tin -0.99%
• Brent rose 0.38% on tightening supplies.
• 10Y Bond Yields: US 3.84%, Australia 4.01%, and Germany 2.45%.

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ASX finishes the week down 11 points at 7314 (-0.15%) for 11-point rise for the week. Narrow range again. Low volumes. Once again, some bifurcation with banks now in focus, slipping on some profit-taking. The Big Bank Basket fell to $179.59 (-0.6%) with CBA down 0.7% and ANZ off 0.8%. MQG slipping 1.4% ahead of AGM next week. Insurers better with QBE up 1.4% and SUN up 0.7%. Money managers mixed. REITs eased slightly with CHC down 0.5% and SCG off 1.1%. Industrials held up relatively well, healthcare in the green with CSL up 0.7% and RMD gaining 1.3%. TLS kicked 0.7% higher, staples better and utilities also in demand. Tech wrecked though today with the All-Tech Index under pressure down 2.1%, as WTC fell 2.4% and XRO off 3.9%. Old Skool Platforms also slid, REA down 2.6% and SEK not finding friends down 4.0%. Resources were mixed, Gold miners fell hard, NCM down 5.3% on Newmont results and NST continued to struggle down 0.8%. Base metal and lithium stocks in the doghouse, MIN hit 7.5% on broker downgrades, PLS dropped 4.5% and AKE slumped 3.3%. BHP and RIO though bucked the weakness rising 0.9% and 0.3% respectively. Oil and gas also better WDS up 1.5%. In corporate news, quiet day, ALX fell 1.0% on toll numbers, SSM up 7.3% a contract win, the Noosa Mining conference finished up and 29M slipped another 6.1% on no new apart from a update date. Nothing on the economic front today. Asian markets once again weaker, Japan down 0.1%, HK up 0.2% and China off 0.2%. 10-year yields higher again to 4.03%. Dow futures up 54 points. NASDAQ futures up 11 points.

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Wall Street closed mixed overnight as the market digested the latest round of tech earnings and fresh signs of labour market resiliency. Dow Jones up 164 points (+0.47%), marking its ninth straight day of gains, its longest streak since 2017, supported by Johnson & Johnson, which jumped 6% on upbeat revenue and earnings. Dow at best up 312 points. Meanwhile, the S&P 500 fell 0.68%, and the NASDAQ tumbled 2.05%, weighed down by Tesla -9.7% and Netflix -8.4%. US small caps Russell 2000 fell -0.89%, and Wall Street’s fear gauge VIX edged higher, up 1.3%. The US greenback strengthened, and bond yields jumped, with 2Y yield up 11.4bps and 10Y yield up 9bps.

ASX to rise slightly. SPI Futures up 6 points (+0.08%).

Economics: US Initial jobless claims fell by 9k from the prior week to 228k, the lowest in two months, significantly below market expectations of 242k. Results further underscore the stubborn tightness of the US labour market. US existing home sales fell 13.3% to a seasonally adjusted rate of 4.1m units in June, the lowest level in five months, missing expectations of 4.2m. Philadelphia Fed Manufacturing Index flat, little changed at -13.5 in July from -13.7 in June, worse than expectations of -10.

European markets are higher, with FTSE 100 +0.82%, DAX +0.58%, CAC40 +0.82% STOXX 600 +0.44%. Asian markets are broadly down. China’s markets hit hardest as China's pledge to support private businesses failed to excite markets. Hang Seng -0.13%, Shanghai -0.92%, Shenzhen -1.06%, ChiNext -0.99%.

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The ASX 200closed flat, near unchanged, up 1 point to 7325, after jumping over 50 points in early trade before unemployment data dampened the market’s mood raising bets of further tightening from the RBA. The Aussie dollar jumped 0.6% to 68.15c, clawing back recent losses, and bond yields rose with 2Y yield up 12bps, and 10Y yield up 9bps on jobs data. Financials performed well today, with the big four banks all ending in positive territory. The Big Bank Basket up to $180.66 (+0.3%). Interest rate-sensitive tech stocks are in demand tracking their US peers despite the market betting on further rate hikes to come. CPU +1.4%, XRO +0.3% and WTC +0.6%. Gold miners were punished today in a broad sell-off. NST fell 6.6%, NCM off 0.4%, and EVN down 0.5% despite gold production exceeding guidance. Miners flat, even as iron ore slipped. FMG up 1.4% and RIO up 0.4%. Defensive sectors underperformed, with healthcare and Telecoms in the red. RMD off 0.8%, RHC down 1.0%, and TLS fell 0.12% after confirming its plans to cut 472 jobs. REITS fell as bond yields rose.

In corporate news, MIN +5.2% after it agreed to sell its interest in the Kemerton Lithium refinery, ZIP +2.3% on better results, with revenue up 21%. FLT up 4.0% on upgraded profit guidance, NXL surged 36.6% after announcing it anticipates sales to rise 20% to reach $183m, QBE +2.4% confirmed guidance, BHP flat, meeting production expectations, STO down 0.1% after trimming production forecast, and SMR up 5.8% on solid production results.

In economics, Australia’s jobless rate was unchanged at 3.5% in June, and China left interest rates unchanged. Asian markets mixed, Japan down 0.8%, HK up 0.3% and China down 0.3%. Dow Jones futures up 4 points, and Nasdaq futures down 59 points.

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US equities closed higher overnight, and the US dollar strengthened after a surprise cooling of UK inflation bolstered sentiment across global markets. The Dow rose 109 points (+0.31%), marking its eighth straight day of gains, its longest streak since September 2019. Dow at best up 282 points. S&P 500 up 0.24%, reaching levels not seen since April 2022, while a decline in Microsoft and Google held the NASDAQ near the unchanged mark +0.03%. US 10Y treasury yields fell overnight following new home construction data for June but remained above its month low, as the market bets the Fed is nearing the end of its rate-hiking cycle. Among stocks, Goldman Sachs rose 0.97% despite reporting its lowest quarterly profit in almost six years, while Netflix fell 7.04% during after-market trade after the streaming company missed Wall Streets' earnings forecast.

• ASX to open flat. SPI Futures flat up 2 points (+0.03%)

European markets were mostly higher. UK stocks in the lead after a faster-than-expected slowdown in British inflation helped bolster hopes of peaking interest rates. London’s FTSE up 1.8%, and the pound slipped. Elsewhere STOXX 50 -0.2%, DAX -0.1%, and CAC +0.1%.

HEADLINES

• ASX to open flat; Wall Street keeps rising. Nasdaq futures down 107 currently.
• Stocks advance as earnings pick up; Dow notches 8th day of gains.
• Tesla's margin falls as it boosts discounts to drive demand. Faalls 4% after hours.
• Netflix quarterly revenue falls short of forecasts down 8% after hours. 
• US House panel looks to revive legislation on self-driving cars.
• Goldman profit falls to 3-year low on consumer losses, shares rise on outlook.
• U.S regional bank shares rise on interest income, deposits stabilising.
• United Airlines posts record high quarterly earnings, lifts full-year outlook.
• UAW president meets with Biden as union opens automaker contract talks.
• IBM misses second-quarter revenue estimates as tech spending cools.
• Fed's last rate hike coming at July meeting, economists say.
• US single-family starts drop; building permits hit 12-month high.
• Bank of England's Ramsden calls for faster QE gilt unwind.
• Microsoft, Activision urge U.S. to drop case against deal before internal FTC judge.
• Russia delivers Black Sea shipping warning as Ukraine decries 'hellish' port attacks.

Get up to speed with Henry Jennings’ Pre-Market Podcast.

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