Markets at a glance 19 August
Around the grounds
The local market has started the weak relatively flat as gains in gold and financials isn’t enough to offset weakness in other sectors, though fears of a possible U.S. recession continue to cool following robust economic data.
Sector specific, financials have advanced 0.3%, while gold stocks dazzle up at one point by 2.6% after bullion prices hit a record high of $2,500 an ounce last week. The miners though have edged lower, tracking a drop in underlying commodity prices.
Finally, looking bigger picture at reporting season so far, Macquarie analysts say it’s been a ‘positive surprise’ so far, thanks to investor euphoria over estimate-beating margins, but has warned by historical measures, results could take a turn as the earnings season approaches its end.
Looking ahead, the bulk of earnings season remains, with heavy hitters BHP (BHP), Fortescue (FMG), Woodside (WDS), Santos (STO), Woolworths (WOW) and Coles (COL) all on the docket in the coming weeks.
In the news
Let’s dive into the detail of those on the corporate calendar today.
Australian listed shares of Ampol (ALD) have sunk to touch a 10-month low as it reports a near 30% plunge in half year profit, a miss on estimates and slashes its dividend. Driving the weakness, disrupted production at its Lytton refinery in Queensland and softer global third-party sales. Shareholders will get a 60 cent a share interim dividend, well below last year’s 95 cent payout.
BlueScope Steel (BSL) has reported its weakest annual underlying profit in four years and flagged a weaker start to fiscal 2025 hurt by “bottom of cycle” steel prices, soft construction activity and high costs.
On the flip side, shares of Westpac (WBC) have touched their highest level since 2018 after the lender reported unaudited Q3 net profit of AU$1.8 billion, up 6% on a quarterly annualised basis. The stock is up over 30% this year as of last close.
Australian insurer Suncorp (SUN) has posted a 17% pop in annual cash earnings but sees slower growth in the financial year ahead for gross written premiums as rates moderate and inflation eases.
Shares have recovered earlier losses to sit in the black. A final dividend of 44 cents per share has been declared, slightly ahead of consensus.
Meantime, shares of Nuix (NXL) have surged over 22% to touch their highest level since April 2021 after the Australian analytics and intelligence software firm posted a near 40% jump in full year underlying EBITDA. Statutory revenue also spiked nearly 21% from a year earlier. The stock is up over 84% this year, as of last close.
Finally, A2 Milk (A2M) shares have taken a beating, down as much as 21% in today’s trade after the company forecast annual revenue growth below expectations thanks to what it calls “challenging market conditions in China”. On the numbers, full year revenue in the company’s top money-making segment, China and other parts of Asia, jumped more than 14%, while China label IMF sales jumped 9.5%.
Going global
Globally, stocks around the Asian region are taking a breather after global equities notched their best week in nine months last week, on expectations the U.S. economy will dodge a recession and signs of cooling inflation will kick off cycle of interest rate cuts. Investors focus now shifts to the all important Jackson Hole Symposium this week where FOMC Chair Jerome Powell will be speaking on Friday where it is assumed he will acknowledge the case for a cut.
Markets have all but fully priced in a 25 basis point move in September, with a 25% chance of a 50bps cut according to the latest CME FedWatch Tool.
US futures are back online pointing to a positive start to the Wall Street session.
More broadly, MSCI’s broadest index of Asia-Pacific shares outside Japan is flat to positive, up 0.2%, having rallied 2.8% last week. Japan’s Nikkei 225 however has slipped but that’s off the back of a near 9% surge last week.
In currency markets, the big dollar has dipped against the euro, while the safe haven yen and Swiss franc receded as risk appetite recovered. And the Australian dollar has jumped to a one month high, buoyed by that risk appetite and expectations here at home interest rates will not be cut anytime soon.
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