Markets at glance 13 August

Around the grounds

It’s a relatively lacklustre day for the Australia share market, as the S&P/ASX200 trades flat with gains in commodity and banking stocks not enough to offset falls in healthcare as top biotech CSL slides on a lower-than-expected full year profit.

Across the sectors, gold plays are up nearly 3% to touch a one month high on the back of a strong bullion price, as investors hopes for a September rate cut from the Fed gain ground. Oil prices have jumped on the prospect of a widening Middle east conflict, which in turn is driving the sector higher.

And financials have extended gains for a fourth straight session.

In economic news, Australian wages are risen at their slowest pace in a year in the June quarter, signalling the peak for this cycle has passed and wages alone would not be a bar to cut interest rates. Annual pay growth held steady at 4.1% in the period, with growth in the private sector up 0.7%.

In the news

Getting to the all-important numbers as reporting season kicks on locally. Market darling CSL Ltd (CSL) sees higher profit for fiscal 2025, thanks to strong performance at its plasma manufacturing business. This after reporting a 15% jump in profit in FY24.

Shareholders will get an AU$1.45 per share dividend, up on the AU$1.29 payout a year ago.  Shares though are down as that guidance for the year ahead underwhelms the market. The stock is up 7.8% YTD, as of last close.

James Hardie (JHX) has posted a 2% rise in first-quarter profit, underpinned by strong sales in its North American market, and while FY 2025 guidance has been reaffirmed, the company has flagged challenges ahead in the second quarter sending shares lower in today’s trade.  

JHX is down nearly 12% this year, as of last close.

Temple & Webster (TPW) shares are going gangbusters, up a whopping 28% as the company logs record revenue in FY24, up 26% on a year ago, and slightly ahead of estimates. Looking ahead, the company says FY25 has started strongly with trading up 26%.  

The stock is up nearly 9% this year, as of last close.

Challenger Financial (CGF) shares have hit a one-and-a-half-year peak on a strong FY result which saw net profit surge 17%, slightly better than consensus. AS of last close the stock is up 6% YTD.

Australian listed shares of Seek (SEK) have taken a hit on disappointing full year results. Revenue and EBITDA took a dive down 6 and 14% respectively on the tails of a significant reduction in job ad volumes from record highs on PCP.  Adjusted net profit also plunged 33% with an after-tax loss of nearly AU$60 million clocked. Investors are also disappointed in a cut to the dividend, down 25.5% to 35 cents per share.

Netwealth (NWL) has also reported a full year profit miss as revenue margins came in lower-than-expected. The payout also missed, coming in at 28 AU cents a share, 7% below Visible Alpha consensus.

The stock is down over 7% in today’s trade, but up over 42% this year, as of last close.  

Finally, outside of reporting season, a union representing workers at BHP’s Escondida mine have warned they could accuse the company of anti-union practices for making an offer on a new collective bargaining agreement outside of a government-mandated mediation process.

And Orora (ORA) has rejected an AU$3.42 billion non-binding takeover offer from Lone Star Fund, stating it materially undervalues the company. Shares are eyeing their best day in 15 years on the back of that news, though the stock is down 26.7% YTD, as of last close.

Going global

Finishing it up on the global stage, stocks around the Asian region are higher, led by Tokyo’s Nikkei 225 with tech shares leading the rally as sentiment gets a boost from a more stable yen. MSCI’s broadest index of Asian shares outside Japan is marginally higher, while Chinese stocks are little changed.

Sentiment though remains fragile ahead of a slew of economic data out of the US that is expected to help sharpen the view on the Federal Reserve’s next policy move. Markets are now evenly split between a 25 basis points cut of a 50 bps cut at the next meeting in September, according to the CME FedWatch Tool.

CPI data for July is due on Wednesday and is expected to show that month-on-month inflation has ticked up to o.2% with the annual rate unchanged at 3%.

Finally in currencies, the dollar index is a tick higher, the euro is steady and sterling is little changed.

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