Good Evening,

Welcome to the ASX News Daily Recap

Did you miss all of the day’s News? Don’t stress. We have you covered.

Here is a sneak peek at some of the day's top stories:

• Google posts strong earnings as it crosses $1.5T

• Kogan & Catpault rise on trading updates

• What does the CPI result mean for rates?

• What’s going on with DogeCoin?

• Mbappe’s $700m decision

The Recap

ASX Higher On Softer June CPI

The ASX200 came out of the gate slightly higher after a strong trading session in the United States; however, all the action occurred after 11:30 am after the June quarterly CPI print dropped. A softer inflation print than expected alleviated concerns about another rate hike at next week’s RBA meeting.

More on that later.

In what’s proving a bumper July, the ASX200 ended the day 62.3 points higher, closing at 7,402.70.

The materials sector was again the stand-out, with BHP (+2.3%), Fortescue Metals (+2.3%) and Rio Tinto (+1.3%) all moving higher as the sector won out for the second day running.

Eight sectors traded in the green today, with Tech (+1.2%), Discretionary (+1.1%) & Financials (+1.1%), some of the others finishing higher. Defensively focused sectors were in the red today, with Health Care and Real Estate falling by -0.49%. 

US Market Recap

What Recession? Tuesday’s trade was positive for the United States, with Alphabet (Google) leading the way for the mega Tech stocks. The S&P500 closed 0.28% higher, finishing at its highest point since April 2022. The Dow Jones gained ground for the 12th day running – its’ longest winning run in six years. The S&P500 is now only 5% away from all-time highs. We’re in the eye of the reporting storm in the United States – we’ve got all the big players covered in the Quick Singles section ⬇️

Economic News

• Locally, the June Quarter CPI was today’s main focus, as a tiny sparkle of hope emerged that it could be the end of rate hikes in the longer term by the RBA. We cover what it all means in today’s Top Story section.

• US Consumer Confidence increased to 117 this month, up from 109.7 in June and the highest reading since July 2021. Despite the strong read, consumers fear a recession over the next year.

• Markets turn their attention to the US Federal Reserve’s monetary policy meeting, which will take place at 4:00 am AEST (don’t wait up!), where it’s all but certain the FOMC will lift rates by 25 basis points.

• The European Central Bank meets on Thursday, where it is expected that a 25 basis point rise will be announced.

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Charts and Prices

Index & Commodity Prices

ASX By Sector

ETF Watch

Quick Singles

Local News 🪃

• Bellevue Gold traded flat at $1.45 after dropping its quarterly cash and activities report this morning. The gold explorer said that construction of its underground gold mine and processing plant remained on track, with the production of its Western Australian mine now underway. Bellevue reported cash on hand of $64.7million at the end of June.

• Corporate Travel Management expects FY23 EBITDA to be between $165 million and $170 million, with a second-half underlying EBITDA between $113.7 million and $118.7 million. CTD finished 1% higher for the day to close at $19.92.

• Dotz Nano announced it would raise around $4 million in capital from institutional investors, issuing 19,807,500 ordinary shares at $0.20 per share. A further 9,903,750 shares were also granted as unlisted options at an exercise price of $0.35, expirable in two years. Dotz fell by 16.3% to close at $0.205.

• Mineral Resources missed production guidance, but that didn’t bother investors, with the share price climbing 4.1% higher to $76.67. The company said that FY23 Lithium spodumene shipments were 143,000(dmt) - slightly below the guidance of 150,000(dmt). Free On Board costs are still expected to be within the $925 - $975/dmt guidance.

• Redbubble shares saw a 15.4% bump to $0.48 today on the back of two favourable decisions from the United States Court of Appeals, which upheld the District Courts judgement that Redbubble cannot be held contributorily liable when third parties misuse the companies platform without their knowledge.

• Rio Tinto dropped its half-year profit report after hours, reporting a 34% fall in profit due to weaker commodity prices. RIO declared a $1.77 interim dividend per share, lower than the prior year.

Around the Globe 🌏

• Wells Fargo announced a share buy-back of up to $30 billion - the share price rose by just under 1% following the announcement.

• TikTok has finally realised not all of us can dance, with users now having the ability to make text posts. Users can edit posts to change the text's appearance and add background colours, music, or stickers with a 1,000-character limit.

• China has removed Foreign Minister Qin Gang after just seven months into the job with no reason provided by the CCP. Qin has been replaced by his predecessor Wang Yi.

• British billionaire Joe Lewis has been charged with insider trading by US prosecutors. The owner of Tottenham Hotspur football club is accused of tipping off employees and associates with non-public information about various entities.

Int’l Earnings Results

• Microsoft - trading 3.8% lower in the after-market after reporting lower than expected quarterly sales with slowing demand in cloud computing. Total sales were 8% higher YoY to $56.2 billion, whilst Earnings Per Share (EPS) was $2.69, above market estimates of $2.54.

• Alphabet - reported second-quarter revenue that exceeded analysts’ expectations, boosted by advertising on the company’s search business. Sales were $62 billion – beating’ expectations of $60.2 billion. The share price is 6.7% higher at $130.48 in after-hoursurs trading.

• Spotify - shares fell by 14.2% after reporting higher losses of €1.55 per share. Revenue was 11% YoY to €3.18 billion. However, this missed analysts’ expectations.

• Texas Instruments - reported quarterly EPS of $1.87, which beat analysts’ expectations of $1.76 but was down from $2.45

• VISA - posted earnings per share of $2.16, up from $1.60 in the PCP. and beat analysts’ expectations of $2.11 per share.

• Snap - landed at the lower end of revenue guidance of $1.07 billion for the quarter with a net loss of $377 million from 397m daily users. The share price is down by 17% in after-hours trading.

Int’l Earnings Calendar

Earning reports roll on…….

Wednesday: Meta, Coca-Cola, Boeing, AT&T, Chipotle, Mattel

Thursday: Intel, Mastercard, McDonald’s, Comcast, Ford, Roku

Friday: ExxonMobil, Chevron, P&G

Top Story

Will Junes CPI Put The Breaks On Rate Hikes?

Headline Results

June’s quarterly top-line inflation eased slightly compared to economists’ expectations - a positive for markets and the cost of your Avo on Toast during Sunday brunch.

• CPI of 6.0% vs. estimates of 6.2%

• Trimmed mean CPI 5.9% vs. estimates of 6.1%

*Trimmed mean CPI excludes food and energy costs which are usually the most volatile parts of the CPI calculation

Against the March quarter, CPI increased by 0.8% vs. estimates of 1.0%

What does this mean?

The lighter-than-expected CPI read may prompt the Reserve Bank of Australia to keep rates on hold when they meet next week. This view supports that bond markets fell this afternoon, which normally indicates that rates won’t be hiked next week. The Aussie 2-year bond yield fell by 110bps to 4.04%

The contrarian view, however, is that a 6.0% CPI read is still much higher than what the RBA wants it to be (2.0%- 3.0%), so the RBA may feel as though the absolute figure is still too high.

The most significant contributors to the CPI rise in this past June quarter were:

• Rents (+2.5%)

• International Holiday Travel & Accommodation (+6.2%)

• Other Financial Services (+2.5%)

• New Dwellings purchased by Owner-Occupiers (+1.0%)

Movers and Shakers

✅ Biggest Winners

Kogan (KGN) provided the market with a business update today which was met favourably, with the share price rising by 9.1% to close at $6.4. The online retailer said that it expects to post adjusted EBIT(excl. one-offs) of $3 million in the second half of FY23 - much improved from the loss of $8.3 million reported in the PCP. Gross Sales for FY23 were down 22.5% from the prior year as consumer spending softened in the sector.

Catapult (CAT) jumped at the chance to provide some positive news today, posting a trading update saying it is on track to be Free Cash Flow positive in FY24. The share price closed at $1.11 - a 5.4% increase. The sports software company also said that revenue growth for the June quarter was over 20%(constant currency) and that annual churn was at record-low levels of below 5%

🔻Biggest Losers 

Grange Resources (GRR) fell by 5.4% to $0.55 after the iron ore mining and pellet producer reported a drop in sales for the quarter to 496KT- down from 714kt in the March qtr. Lower Iron Ore prices also negatively affected the miner, with the average price dropping by 29.5% from US$156.21/t in March to US$108.12/t for the June quarter.

Austal (ASB) sunk like a leaky ship after it downgraded earning guidance for FY23, which the company said was due to various challenges surrounding the costs of constructing the T-ATS vessel for the US Navy, with hyperinflation and changing project specifications. Austal had provided earnings guidance of AU$58m - which has been adjusted to between zero profit and a loss of AU$10m. Shares ended the day at $2.30 - down 11.7%

Crypto Corner

Could Elon Musk's Twitter Overhaul Could Be Huge for DogeCoin?

Dogecoin (DOGE) has surged 25% in the past two weeks amid speculation that the cryptocurrency could be used as a payment mechanism on the rebranded Twitter platform.

The cryptocurrency has also seen a pickup in the perpetual futures market tied to DOGE, with the notional open interest topping the $500 million mark for the first time since April 19.

Traders are speculating that Twitter, which rebranded to the everything app ‘X’ on Monday, could potentially integrate DOGE tokens as a payment method on the platform in the future, given owner Elon Musk's seeming infatuation with the meme coin. Elon has been a known advocate for DOGE and has stated in interviews that he personally owns Bitcoin, Ethereum and DOGE.

Crypto Price Watch

What The?

From time to time, we find something from left field we have to share

Investment in sports from Saudi Arabia isn’t as much of a surprise anymore, considering the money being poured into global football clubs and Liv Golf from the Gulf State; however, the size of the investment continues to raise eyebrows.

After being shunted by superstar Lionel Messi, Saudi Arabia football club Al Hilal has made a monster offer to bring in Paris Saint Germain’s French forward Kylian Mbappe for what would be a world record transfer fee of US$332 million. CBS Sports reported that the club had offered Mbappe a staggering one-year salary of US$776 million (almost as much as a Blackrock banker).

As a comparison, the one-year salary would be 4x more than the salary cap of the 794 players in the Australian Football League (AFL) across all 18 clubs, estimated to be A$250 million this season.

According to Forbes Sports, the amount would be more than LeBron James’ NBA career earnings and Tiger Woods PGA Tour earnings combined!

NBA stars jumped on Twitter X to weigh in on the offer, with Milwaukee Buck’s big man and self-proclaimed Mbappe lookalike Giannis saying he would take the offer.

Broker Ratings

Another quiet day for broker rating changes

• Mader Group reduced to a Hold at Moelis - PT $6.31

• ASX reduced to underweight at Morgan Stanley - PT $55.55

• Pilbara Minerals reduced to a Hold at Morgans - PT $5.00

Economic Calendar