Good Evening,

Welcome to the ASX News Daily Recap.

Lost track of what happened on the market today?

Don’t stress. We’re here to catch you up.

Here’s a sample of what you may have missed:

1. 📱 Apple & Amazon report to a mixed reaction

2. 💰 ACCC puts the brakes on banking deal

3. 👗 City Chic says au revoir to Europe

4. 😴 ResMed disappoints on earnings

5. 🗲 Superconductor Update

The Recap

ACCC Stops Banking Takeover!

ResMed's Margin Woes

It was a topsy-turvy day for the market, coming out of the gate strongly before a downturn after lunch saw it trade in the red for most of the day before ending 0.19% higher to 7,325.3. Despite the positive end to the week, the ASX200 ended the first week of August down 1.75%.

ResMed was one of the larger companies to report today, falling 9%, which dragged the overall Health Care sector lower by 1.20%. Utilities (-0.70%) also finished in the red, whilst Tech (+1.25%) and Energy (+1.09) led the way of the seven sectors to finish higher. Wisetechs share price gained 1.9% today, clocking up another all-time high of $87.00.

Today's big story was that The Australian Competition and Consumer Commission (ACCC) rejected ANZ’s $4.9 billion bid for Suncorp’s banking arm, fearing it would lead to decreased competition in the banking sector.

China and Australia relations appear to be on the mend, with the Chinese Ministry of Commerce saying it would scrap barley tariffs from Aussie exporters effective tomorrow. The tariffs have been in place since May 2020.

Wall Street

The S&P500 fell for the third straight day, finishing 0.25% lower as Bond prices rose. The U.S. 10-year bond yield climbed to 4.17%, approaching highs last seen in October 2022. The NASDAQ also ended the day lower, dropping by 0.10%.

The U.S. job market is proving resilient, with initial jobless claims ticking up by only 6,000 to 227,000 in the week ending July 29, in line with estimates. The four-week average of 228,250 is the lowest since March.

Crude Oil rose by over 2.5% on Thursday after Saudi Arabia said it would extend a voluntary oil output cut of one million barrels per day for another month to September. Production in September will continue to be around 9 million barrels per day.

A mixed earnings reaction from the Tech titans Amazon and Apple, who reported after market close on Thursday:

US Earnings Recap:

• Amazon’s earnings report was met favourably - beating analyst estimates on almost every metric, with the share price rising by over 9% in after-hours markets. A strong performance from its e-commerce business and lower costs were the catalysts. Q2 revenue was $134.4b vs. $131.5b. EPS $0.65 vs. $0.35. Q3 revenue guidance was $138b - $143b & net income of $5.5b - $8.5b.

• Apple shares fell by over 2% in after-hours trade after posting a YoY sales decline for the third consecutive quarter on weaker phone demand. Apple said it expects this to continue into Q3. Q2 revenue was $81.8b vs. $81.69b. iPhone sales were $39.7b vs. $39.8b. EPS $1.26 vs. $1.19. No official guidance for the upcoming quarter was provided.

• Airbnb fell after reporting fewer nights and experiences booked in Q2 than expected. Revenue grew by 18% to $2.48 billion, ahead of expectations. EPS was $0.98 vs. $0.78 estimated - Q3 revenue guidance between $3.3b - $3.4b.

• Atlassian shares skyrocketed by over 20% in after hours, reporting revenue growth of 24% in the quarter to $939.1 million - ahead of estimates of $914.6 million. Adj. EPS was $0.57 vs. $0.45 expected. Next qtr. revenue guidance of $950m and $970m surpassed expectations and was the catalyst for the share price spike.

• Block shares fell on a weaker outlook, although Q2 estimates were better than expected as its consumer Cash App business posted a strong quarter. Adj. EPS was $0.39 - up 116% from a year earlier and slightly ahead of expectations. Net revenue increased 26% to $5.53 billion.

• DraftKings rose by over 12% in after-hours trading, with the online sportsbook company posting an 88% increase in Q2 revenue to $875 million, beating analysts’ estimates of $758 million on the back of a 44% growth in monthly unique users.

Economic News

In its quarterly economic update, The Reserve Bank of Australia (RBA) said it predicts CPI to slow to 4.1% by December-23 and 3.3% by next year.

U.S. Unemployment claims rose by 6,000 to 227,000 for the week ending July 29, in data released Thursday, an indicator the labour market remains strong.

The Bank of England lifted interest rates as expected for the 14th consecutive time to 5.25%.

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🪃 Local News

• Bendigo and Adelaide Bank disclosed impairments to some of its software intangible assets and extra non-cash restructuring charges. This will lead to a non-cash charge of $60.8 million post-tax, which will be reflected in the Group's FY23 earnings report.

• City Chic has sold its Evans business and EMEA inventory to AK Retail Holdings for £8 million, which after transaction costs will be approximately £6.4 million (~A$12 million). City Chic will shut its U.K. warehouse, leading to the closure of its’ Navabi business. The move aims to fortify the company's financials by strengthening the balance sheet, decreasing debt, and reducing inventory. CCX shares rose 28% on the back of the news.

• China said it would scrap tariffs on Australian barley imports from tomorrow, a possible sign that relations between the countries are on the mend. China imposed tariffs of more than 80% on Aussie barley back in May 2020.

• Mageallen’s FUM fell again in July, dropping by $0.5 billion. Magellan reported net outflows of $0.4 billion, most of which came from retail investors, totalling $0.3 billion.

🌏 Around The Globe

• Worldcoin is facing global government backlash as Kenya halts the project. France, Germany, and the U.K. have also initiated investigations. Despite this, Worldcoin has received over 2 million registrations, offering 100 free Worldcoin tokens to users who create a distinct digital identity by scanning their eyes.

• Amazon Fresh is doubling-down on groceries, launching various new strategies to increase in-person stores and grow its market share in the U.S. grocery sector. Some changes include making delivery available to non-prime members, ‘humanising’ the stores with more colour and merging the online checkouts of Amazon, Amazon Fresh and Whole Foods.

• Elon Musks Boring Company received approval to dig 68 miles of tunnels under Las Vegas. The Boring Company transports passengers between different points of the city - known as the “Loop.”

• Meta has launched Audio Craft, an open-source AI tool for generating music and audio from text prompts. This suite of generative AI tools enables content creators to effortlessly produce intricate audio landscapes, compose melodies, and simulate virtual orchestras by inputting straightforward text descriptions.

• Fitch’s rating downgrade was met with backlash, with JP Morgan CEO Jamie calling it ‘ridiculous’, whilst treasury secretary Janet Yellen said it was ‘flawed and entirely unwarranted.’ 

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Movers and Shakers

✅ Biggest Gainers

• Azure Minerals (AZS) skyrocketed today after reporting broad zones of Lithium mineralisation at its Andover project in West Pilbara. Azure said the mineralisation extended for more than 1,800m along strike and down-dip from surface to vertical depths of 400m. Azure rose by 22% to $2.66, with the share price now up a whopping 500% in the last three months.

• Dicker Data provided an earning update on its H12023 results, reporting revenue growth of 9.4% to $1,596m, partly attributed to its Hills acquisition completed in May last year. Dicker reported an NPBT of $54m - an increase of 8%. The company said that whilst there was a decline in demand for personal computing devices, it capitalised on the demand for networking and storage products, along with its software and surveillance business. DDR shares ended the day 4.7% higher to $8.40

🔻Biggest Fallers

• Mesoblast (MSB) lost more than half its value, dropping by a staggering 56.8% to $0.47. This came on the back of an update from the U.S. FDA in response to Mesoblast’s application for the drug therapy remestemcel-L. In short, the FDA wants more data before it can support marketing approval. Mesoblast will launch a study focusing on high-risk adults with higher mortality risks, specifically those with a 90-day survival rate of 20-30%.

• ResMed (RMD) fell today after reporting Q4 earnings. Declining Gross Margins and increased costs likely drove the share price decline, which ended 9.3% lower to $30.70. Q4 revenue growth was 23%, pushing it to $1.1 billion. Operating profit rose by 8%. Gross Margins declined by 210bps to 55.0% due to product mix change and increased component costs. Total SGA expenses were 26% higher; however, this was partly related to the acquisition of MEDIFOX DAN. No forward guidance was provided.

Crypto Corner

Coinbase Q2 Earnings: A Deeper Dive Into Rising Revenues Amid Falling Volumes

Leading cryptocurrency exchange Coinbase surpassed Q2 analyst estimates despite facing transaction revenue and trading volume challenges. The company reported Q2 revenues of $708 million with an adjusted earnings loss of $0.42 per share, still ahead of an estimated loss of $0.76 per share.

The bad news. A decrease in transaction revenue to $327 million from the previous quarter's $375 million, alongside a fall in trading volume from $145 billion to $92 billion, raised eyebrows. Coinbase said the lower transaction volume “reflects multi-year lows in crypto volatility.”

Despite the volume drop, Coinbase’s net revenue benefited from its partnership with Blackrock and an increased institutional focus. It's noteworthy that while competitors like Binance grapple with regulatory uncertainty, Coinbase’s growth is attributed to its dominant market stance in the U.S.

The company has faced its share of challenges, including a sixth consecutive quarterly loss. Yet, there was a silver lining in its adjusted EBITDA, which was $194 million, significantly better than the EBITDA loss of $151 million from the prior year. CEO Brian Armstrong remains optimistic about the platform's future, expressing plans to centre on non-trading segments over the next three to five years, targeting scalability, regulatory clarity, and fostering crypto utility.

Key Financial Metrics

While Q2 saw a decline in consumer trading volume by 33% and institutional volume by 37%, Coinbase's non-trading revenue, mainly from subscriptions and services, surpassed its trading revenue with a net of $335.4 million.

After the release of Q2 results, Coinbase’s stock witnessed some initial volatility but stabilised shortly after. Coinbase stock price is up by approximately 165% year-to-date, although it remains well below its all-time high of $343 in November 2021.

Crypto Price Watch

What The?

A follow-up to last Friday’s Recap

 Superconductors have long been the holy grail in materials science. These compounds can conduct electricity without any losses, meaning no wasted energy in the form of heat.

The dream? Creating a room-temperature, ambient-pressure superconductor. It might just have been realised with the discovery of LK-99. Unveiled initially by a Korean team, this compound has triggered waves of excitement and scepticism in the scientific community.

The initial excitement around LK-99 stemmed from its potential as a room-temperature superconductor. Current superconductors require extremely low temperatures or high pressures to function, making them costly and limited in their applications.

Two preliminary studies have provided some validation for the initial LK-99 findings, with Chinese researchers even providing video evidence of its superconductivity. The methodology involved in creating LK-99—combining lanarkite and copper phosphide and then undergoing a complex synthesis process—has raised eyebrows amongst the science community. Notably, simulations suggest that the material's superconducting pathways form only in specific, high-energy areas. While the initial research suggests promise, more validations are required before its practical implications can be fully understood.

So what does this mean for markets?

A lot if you trade small-caps on the South Korean stock exchange.

Duksung Co. and Sunam Co., have seen significant spikes in their shares. Duksung's shares surged 170%, and Sunam saw a 260% increase in just six sessions. Sunma manufactures and distributes high-temperature superconducting wires.

If only we had got onto these stocks about two weeks ago!

📊 Broker Ratings

• Aeris Resources (AIS) - Downgraded to Hold from Buy (Ord Minnett)

• Flight Centre Travel (FLT) - Downgraded to Neutral from Outperform (Macquarie)

• Core Lithium (CXO) Cut to Underweight by Wilsons

🗓️ Economic Calendar