ASX 200 up another 50 points to 7048 (+0.7%) as banks and resources rally pre-Jackson Hole. Resources continue to find friends on Chinese stimulus moves. Iron ore stocks wilted from highs, with BHP up 0.7%, FMG up 0.1%, and RIO lagging slightly although still up 0.2%. Base metals also doing well despite nickel falling overnight, S32 good results up 1.0% and IGO up 1.8%. Lithium stocks took a slight breather, PLS down 1.7% as uranium took centre stage on Japanese moves to embrace more nuclear power. PDN rose 11.6%, BOE up 5.2% and BMN up 15.4%. Oil and gas stocks continue to find buyers as STO rose 1.3% and WDS up 2.0%. WHC results today saw early losses as buyers stepped back in and erased the fall closing only down 1.4%. Even gold miners put in a better day, NCM up 3.0% and DEG up 5.3%. Banks were better as bond yields rose, CBA up 0.6% and WBC the stars, the Big Bank Basket rose 0.7% to $172.57. IFL pushed 11.4% ahead as MLC integration looks to be working out. MQG saw a rebound too up 1.7% with insurers a little left out. Healthcare better as CSL bouncing back 0.4%. SHL up 2.2% saw upgrades from brokers, RHC up 0.8% as BlackRock becomes a substantial shareholder at 5.1%. Industrials were firm with the exception of the staples which again came under pressure as WOW fell 3.2% on results. Plenty of ex-dividends today as well. Tech was firm but unremarkable with the All-Tech Index up 0.5%. In corporate news, Super Thursday today, QAN announced a $400m buyback and Joyce gave $50 vouchers to say sorry, up 7%. NEC streaming 9.0% higher on better numbers, IEL doing well on its pivot up 7.5% and KAR better on a full year of Bauna, up 8.4%. Nothing much on the economic front. In Asia, markets pushing higher although HK suffering from storm disruptions Japan up 0.7% China up 0.4% and HK up 1.7%. 10-year yields higher again at 3.67%.

Headlines

  • Winners: DYL, SLX, PDN, IFL, NEC, QUB, PDL, KAR.
  • Losers: CCX, KLS, DMP, PPT, MGX, JBH, FLT. MAD.
  • Positive sectors: Banks. Uranium. Gold. Tech. Healthcare.
  • Negative sectors: Staples.Pizza.
  • High 7058 Low 6992. Tight range. Results dominate.
  • Big Bank Basket: Back up to $172.57 (+0.7%)
  • All-Tech index: Up 0.5%
  • Gold: Steady at $2525
  • Bitcoin: Better at US$21535
  • Aussie Dollar: Drifts up to 69.70c.
  • 10-Year Yield:  Pushes higher to 3.67%.
  • Asian markets: Japan up 0.7% China up 0.4% and HK up 1.7%.
  • US Futures: Dow up 246 Nasdaq up 130
  • European Markets: set to open around 0.7% higher.

Major Movers

  • DYL +18.30% PDN +11.56% BMN +15.38% Japan fires up uranium sector.
  • IFL +11.36% good results MLC going well.
  • PDL +8.40% merger with PPT.
  • NEC +9.00% good results.
  • KAR +8.38% first full year result from Bauna.
  • ASN +26.19% MOU with DLE Sunresin to develop Li Plant.
  • SLX +11.75% uranium and results
  • PRL +4.17% expands licence are for HyEnergy.
  • PGC +13.33% results cheer.
  • CCX- 19.31% not so city chic after all.
  • DMP -9.55% stuffed crust again.
  • FLT -4.56% broker downgrades.
  • PLS -1.73% running out of steam
  • MGX -5.81% results underwhelm.
  • LRS -11.11% company presentation.
  • CBE -7.84% profit taking.
  • Speculative Stock of the Day: Ragusa Minerals (RAS) +26.42% good volume and building. Recent ASX please explain plays the Schultz card.

In The News

  • Zip Co (ZIP) full-year statutory profit -$1.11bn vs year-ago -$678.1m. Revenue $620m vs consensus $617.1m.
  • Ardent Leisure Group (ALG) full-year profit -$97.4m vs year-ago -$86.9m. Revenue $637.6m vs year-ago $390.7m and consensus $595.9m. Now solely focused on maximising the performance of its Theme Parks & Attractions business. Theme Parks and Attractions Division CEO Greg Yong will also assume position of Group CEO.
  • Eagers Automotive (APE) first half underlying profit before tax $195.1m vs guidance ~$195m. Revenue $4.22bn vs consensus $4.33bn. Interim dividend 22c vs year-ago 20c. expects the current dynamic of demand outstripping supply to continue in H2.
  • South32 (S32) full-year underlying profit US$2.60bn vs consensus US$2.56bn. Revenue US$10.63bn vs consensus US$9.77bn. Final dividend 14c, and special dividend 3c, both fully franked. Expected to deliver +14% copper equivalent production growth y/y in FY23.
  • Nine Entertainment Co. Holdings (NEC) full-year profit $348.5m vs consensus $338.5m. Revenue $2.69bn vs consensus $2.64bn. Final dividend 7c (fully franked), taking the full-year dividend to 14c vs consensus 13c. The new year has started on a positive note in terms of audiences, across all platforms, and while broader economic conditions have become more uncertain, the advertising market to date, has remained resilient. Expecting first half FY23 Group EBITDA of $380-400m. Announce on-market buy-back of up to 10% of its issued share capital.
  • Charter Hall Group (CHC) full-year operating EPS $1.156 vs consensus $1.14. Dividend 40.1c vs year-ago 37.9c. In FY23 sees, EPS at least 90c vs consensus 88c.
  • Woolworths Group (WOW) full-year profit $1.51bn vs consensus $1.48bn. Revenue $60.85bn vs consensus $61.25bn. Final dividend of 53c, fully franked. Full-year dividend of 92c vs consensus 89c. The start of F23 is clouded by the cycling of the Delta COVID outbreak at the beginning of F22 in Australian Food business, which disproportionately impacted its largest state, NSW. Operating conditions in New Zealand Food remain challenging. BIG W total sales have been strong in the first eight weeks of F23. Operating capex will remain at similar levels to F22 at around $2bn. Major spend in F23 includes ongoing supply chain transformation, store renewals, eCommerce and digital investment.
  • Whitehaven Coal (WHC) full-year profit $1.95bn vs consensus $1.90bn. Revenue $4.92bn vs consensus $4.88bn. EBITDA $3.06bn vs consensus $3.01bn. Final dividend 40c, fully franked. Expects FY23 ROM coal production of 20.0-22.0Mt vs FY22 20.0Mt. Announces retirement of deputy Chairman.
  • Qantas Airways (QAN) full-year underlying profit before tax -$1.86bn vs consensus -$1.84bn. Revenue $9.11bn vs consensus $8.68bn. No dividend. Launches $400m buyback. Expects FY23 EBIT between $425-450m. Sees international capacity at 65% in the first half of FY23 and 84% in the second half. Domestic capacity at 95% in the first half of FY23 and 106% in the second half.
  • Appen (APX) confirms first half underlying profit -$3.8m, in line with the preliminary announcement. No dividend. FY22 EBITDA and EBITDA margin expected to be materially lower than FY21.
  • IDP Education (IEL) full-year adjusted profit $106.6m vs consensus $102.1m. Revenue $793.3m vs consensus $810.1m. EBIT $163.2m vs consensus $153.3m. Final dividend 13.5c.
  • Allkem (AKE) full-year profit US$337.2m vs consensus US$311.1m. Revenue US$769.8m vs consensus US$759.9m.
  • Flight Centre (FLT) full-year underlying EBITDA -$183.1m vs consensus -$183.7m and guidance of -$180m to -190m. Revenue $1.01bn vs consensus $1.01bn. Group TTV $10.34bn vs consensus $10.12bn and guidance of over $10bn. Notes FLT has started FY23 with strong momentum and is well-placed to capitalise on opportunities that will arise. While supply constraints and macro-economic changes are being monitored, they are not currently noticeably impacting demand. Profit and TTV recovery are unlikely to be linear and are again expected to be heavily 2H weighted, reflecting both seasonality (peak booking months are typically during the January June period) and the anticipated capacity and pricing stabilisation as the year progresses.
  • Regis Resources (RRL) full-year statutory profit $14m vs company guidance $10-20m. Revenue $1.02bn vs consensus $1.01bn. Final dividend 2c (fully franked). FY23 guidance repeated, sees production 450-500Koz at an AISC of $1,525-1,625/oz.
  • SKYCITY Entertainment Group (SKC) full-year normalised profit NZ$9.7m vs consensus NZ$5.9m. Normalised revenue NZ$631.5m vs consensus NZ$620.6m. No final dividend. In Fy23, normalised EBITDA is expected to be in line with pre-Covid levels. Notes strong performance FY23 year to date.
  • Pendal Group (PDL) and Perpetual (PPT) are expected to announce a merger agreement today.
  • IVE Group (IGL) full-year underlying profit $33.1m vs consensus $33m. Revenue $759m vs consensus $749m. Final dividend 8c (fully franked). In FY23 sees, underlying EBITDA of $105m excluding Lasoo. Dividend policy remains unchanged, targeting a full year payout ratio of 65-75% of underlying NPAT.
  • City Chic Collective (CCX) full-year underlying profit $28.5m vs consensus $28m. Sales revenue $369.2m vs consensus $359.1m. No dividend declared. Trading for the first seven first weeks of FY23 is broadly in line with year-ago. In FY23, expects growth to be supported by strong in-market inventory that was received in advance. Shipping availability, rates and transit times are improving, although costs are still above pre pandemic levels and origin supply chain inflation and uncertainty continues.

Economic News/Bond Markets

At the end of June, there were 2,569,900 actively trading businesses in the Australian economy.

In 2021-22 there was a:

  • 7.0%, or 167,646 increase in the number of businesses, of which 140,102 are non-employing businesses.
  • 19.7% entry rate, with 472,731 entries.
  • 12.7% exit rate, with 305,085 exits.

Asian Markets

  • Hong Kong scrapped trading of stocks Thursday morning due to a tropical storm.
  • China upped its stimulus with another 1 trillion yuan into infrastructure support.
  • The State Council, China’s Cabinet, outlined a 19-point policy package. Premier Li Keqiang, and the State Council vowed to make use of “tools available in the toolbox” to maintain a reasonable policy scale. Goldman Sachs Group Inc. economists said the measures announced Wednesday won’t be enough to lift the overall growth rate from the 3% they’re projecting.
  • Xpeng dropped details about two new vehicles it plans to release next year, with one positioned to be a competitor to the Model Y.

US and European Headlines

  • Blackstone set to buy Pink Floyd catalogue. Maybe they will find the ‘Dark Side of the Moon’.
  • Amazon to close US telehealth service as it shifts sector ambitions.’No more breathing room’.
  • Novartis to spin out Sandoz with a Swiss listing. ‘Run like hell’
  • Tesla share split today.’Shine on you crazy diamond’.
  • Nvidia disappoints ‘high hopes’ dashed. Salesforce also underwhelms ‘goodbye blue sky’
  • Germany calling ‘time’ on lighting up public buildings. Things are getting real.
  • Biden cancels $10k of student loans. Critics not happy with stimulus potential. Cheaper now, ‘learning to fly’.
  • International hedge funds look set to attack Italian debt ahead of the election next weekend. ‘Money, so they say’.
  • British workers may abandon working from home as energy prices rise. Winter is coming and it’s ‘comfortably numb’ with cold at home.
  • Vale Tim Page.War Correspondent.’Wish you were here’.

And finally……back in a month

Clarence

Europe awaits.

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