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Major US benchmarks closed near breakeven ahead of key inflation data, while gold prices surged to a record high due to escalating tensions in the Middle East. Speculation continues over the sale of Albemarle's (ASX:ALB) stake in the Greenbushes lithium mine to IGO (ASX:IGO). Additionally, more FY24 results are expected to be released this morning.
OVERNIGHT MARKETS Major US benchmarks finished mixed, with most sectors ending lower, except for gains from Nvidia (+4.0%) and energy stocks. The session was relatively uneventful as the market weighed familiar themes, including normalizing positioning and sentiment, the Fed pivot, broadening earnings, and rising geopolitical tensions in the Middle East.
Deutsche Bank reported that aggregate equity positioning dropped sharply last week, from a mid-July peak at the 97th percentile to below average at the 31st percentile. Goldman Sachs noted that the positioning dynamic has shifted significantly since July 17 and is now showing early signs of recovery.
Gold closed at a record high, while oil prices spiked ~3% amid concerns over Israel and Iran, raising supply fears.
ASX TODAY
- Abacus Storage (ASX:ASK): Reporting FY24 results.
- Albemarle (ASX:ALB): Considering selling its 49% stake in the Greenbushes lithium mine.
- Challenger (ASX:CGF): Reporting FY24 results.
- CSL (ASX:CSL): Reporting FY24 results.
- Qatar: In talks to acquire up to a 20% stake in Virgin Airlines.
- Sigma Healthcare (ASX:SIG): Deal with Chemist Warehouse decision pushed back by ACCC until October.
- Sims (ASX:SGM): To sell its UK metal business for after-tax cash proceeds of ~A$385 million.
- Temple & Webster (ASX:TPW): Reporting FY24 results, providing a trading update, and announcing a CFO appointment.
WHAT TO WATCH TODAY Wall Street ended mostly flat overnight, with only tech and energy sectors showing strength. This could result in some weakness in the local market today. Our overnight ETF watchlist was mixed. Key sectors to watch include:
- Gold: Prices surged 1.7% overnight, reaching a record high of US$2,470 an ounce. This sparked a strong response from the VanEck Gold Miners ETF (+2.96%), with NYSE-listed Newmont (NYSE:NEM) shares up 2.2%. Expect local gold stocks to open higher.
- Energy: Oil prices rose ~3% overnight due to escalating concerns in the Middle East. Despite mixed fundamentals, geopolitical risks are driving prices higher. The S&P 500 Energy Sector showed resilience, rebounding from a 2.1% drop to close 0.5% higher.
KEY NUMBERS FOR TODAY'S REPORTERS
- CSL (ASX:CSL): Macquarie expects US$14.62bn in revenue, US$2.57bn NPAT, adjusted EPS of 603 US cents, and a full-year dividend of 258 cents per share. For FY25, analysts forecast NPATA of US$3.36bn.
- Seek (ASX:SEK): Macquarie analysts predict FY24 revenue of $1.08bn, EBITDA of $475m, NPAT of $181m, and a full-year dividend of 31 cents per share. Job ad volumes are expected to decline 19% year-on-year, partly offset by a 10% price increase.
- Netwealth (ASX:NWL): Morgan Stanley forecasts FY24 revenue of $263m, EBITDA of $130m, net income of $89m, and EPS of 36 cents per share.
- Temple & Webster (ASX:TPW): Citi analysts project FY24 revenue of $502m, EBITDA of $10.9m, net profit of $3.4m, and a closing cash balance of $108.5m.
ALSO WATCH FOR YESTERDAY'S REPORTERS:
- Aurizon (ASX:AZJ): Missed Macquarie's FY24 net profit and full-year dividend expectations by around 5% and 2.2%, respectively. FY25 guidance was also a 2.2% miss. A miss from a stable income stock could lead to significant selling pressure, following a 5% drop on Monday and an 8.8% decline. Broker downgrades are also noted.
- JB Hi-Fi (ASX:JBH): Delivered strong results, beating expectations across the board, and announced an unexpected special dividend of 80 cents per share. However, the stock is trading at a PE of around 17.5-times, slightly above its historical average.
