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. 🗼 Telstra Shelves Divestment Plans

2. 👷🏻‍♂️ Aussie Unemployment Rises

3. 🐔 Ingham's Stock Takes Flight

4. 📺 Shift in T.V. Viewing Habits

5. 🩸 Sonic Shares Slide

The Recap

Unemployment Rate Climbs As
Chinese Economy Concerns Linger

The Australian market fell again today despite an afternoon rally on the back of a weaker-than-expected jobs outlook. The ASX200 hit a five-week low, falling by 0.68% or 49.2pts to close at 7,146.0.

The unexpectedly high unemployment rate of 3.7% in July provides further support for the RBA to maintain current interest rates during its upcoming September meeting.

The Australian dollar has hit a nine-month low of US$0.64 due to a decline in China's economy, which is a major purchaser of our commodities. According to economists, the currency could decrease further if the market's outlook on China's economy does not improve.

Treasury yields in Australia and the U.S. continue to climb. The U.S. 10-year bond yield is at points not seen since 2007. The Aussie 10-year bond traded at around 4.30% today, the highest since 2014.

It was the busiest day on the earnings calendar so far, with Telstra, Goodman Group, ASX Ltd., Seven Group and Sonic Health some of the market heavyweights posting full-year earnings.

Goodman Group were one of the big winners today, rising by 5.7%, which dragged the REITs sector higher (+1.11%) Energy (+0.39%) also finished the day higher Industrials (1.30%) fell, whilst Health Care was lower thanks to Sonic Healthcare (-5.7%), and ResMeds (5.91%) continual slide lower.

A quieter earnings schedule tomorrow with Allkem, Centuria Capital, Latitude, and Magellan expected to report.

ASX200 Stock Snapshot

Wall Street

Another day of red across the market, with the S&P500 (-0.76%) and NASDAQ (-1.15%) falling for the second day straight. The Insurance, Utilities and Food Staples sectors were the only areas spared, while the other 17 sectors finished lower.

The FOMC meeting minutes dropped on Wednesday, as Fed. officials remain divided, with some calling for further rate hikes to bring inflation under the target rate of 2%. The Fed. continued to reiterate it will be data-dependent.

U.S. 10-year bonds traded above 4.26%, the highest point since October 2007.

Target rose 2.9% with a surge in profits in Q2 but cut full-year earnings guidance. TJX Companies was another retailer that reported, with the stock rising 4% after beating analysts’ expectations.

Tesla stock fell by 4.2% after further price cuts in China of 6%, this time on the Model S and X.

Economic News

• Australian figures released today showed that the number of employed people fell by 14,600 in July. This was well down from estimates of a 15,000 increase, along with last month’s increase of 32,600. Unemployment ticked up to 3.7%, ahead of Junes read and estimates - both 3.5%

Sponsor

The Worlds #1 Visual Newsletter

Data-driven insights into business, tech, entertainment and society. Our visual newsletter takes 5 minutes to read, and it’s completely free.

Join over 400,000 other visual thinkers and data-driven professionals.

Sign-Up Here

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Earnings

Company Earnings Summary

A quick snapshot of the companies who reported earnings today

• Amcor warned that inflation pressures could continue into FY24 as it must continue to lift prices to manage cost pressures. The company expects profit growth in the second half of FY24 after a “soft patch” bought on by higher costs and slowing consumer spending.

• Telstra shares fell today after the company stated it would not sell its stake in its physical infrastructure unit, InfroCo, saying the unit "plays an important role" in achieving its long-term goals. InfraCo posted a 4.1% rise in annual income to A$2.56 billion ($1.64 billion), contributing 11% to Telstra's total income of A$23.25 billion.

• Sonic Healthcare reported a drop in revenue and profit as Covid-related pathology testing fell, with revenue from those tests dropping by 80%. Despite this, EPS of $1.45 is 19% higher than it was pre-pandemic (FY19: $1.22)

• Super Retail Group, the owner of brands such as Supercheap Auto (SCA), Rebel and BCF, saw its share price rise after reporting a like-for-like sales increase of 8% during FY23. H2 of FY23 saw this slow to 6% due to lower consumer spending. SCA saw the biggest rise, an 8% sales increase to $1.45 billion. A special dividend of 25cps was declared along with a final dividend of 44cps

• ASX Ltd. reported a profit drop due to costs related to its project to replace the market settlement system, CHESS. A $173.8 million significant item was recorded in the FY23 result. ASX reported a 72% rise in interest income of $70.8 million thanks to the lift in the cash rate.

Spread The Word,
Get Rewarded

Refer 5 friends who sign-up to ASX News, and you’ll get a free audiobook of the award-winning bestseller Atomic Habits by James Clear.

Quick Singles

🪃 Local News

• NextEd Group dropped by 29% today after downgrading its 1H24 guidance to $59.0 million - $63.0 million. The drop is due to fewer non-residents studying, with the government’s “temporary COVID-19 408” Visa being extended beyond July-23. The temporary VISA allows non-residents unlimited working rights without needing to study for up to 12 months. NextEd said there had been a four-fold increase in holders of this VISA.

• Core Lithium shares dropped 25% to $0.41 after announcing a $100m capital raise at $0.40 per share.

• Pointerra will raise $3.5 million in capital from institutional and Retail holders at $0.12 per share.

• Sezzle will commence trading on the NASDAQ tonight under the ticker “SEZL.”

• Liontown Resources has awarded Byrnecut Australia a four-year, $1 billion contract to manage the underground mining services for the company’s Kathleen Valley Lithium project in WA.

• James Hardie appointed Rachel Wilson as CFO, effective immediately after Jason Miele stepped down from the role but will stay in an advisory capacity for the next three months.

🌏 Around The Globe

• Is the media landscape at a tipping point? For the first time, the market share of traditional TV (broadcast + cable) has fallen below 50% in the U.S., while streaming captured a record 39.7%. Youtube remains the leader in streaming at 9.2% of the market, followed by Netflix at 8.5%.

• Fitness company F45 said it would voluntarily remove itself from the New York Stock Exchange as it continued to trade below $US1 for more than 30 consecutive trading days. The company failed to report its financial statements on time, citing “material weaknesses” in its accounting practices.

• IBM CEO Arvind Krishna said the company will replace ~8k jobs with A.I., primarily in noncustomer-facing roles

• New York-based short-selling firm, Hindenburg Research, has made a bold move by betting against Freedom Holding Corp. This financial conglomerate operates in Eastern Europe and Central Asia and is listed on Nasdaq. Despite its location in Kazakhstan, the firm has caught the attention of Hindenburg, who are confident in their decision.

• Due to soaring food inflation, Burger King has removed tomatoes from their burgers and wraps in multiple Indian locations, as prices have increased over four times their original amount.

• Intel has terminated its plans to acquire Israeli contract chipmaker Tower Semiconductor as it could not get timely regulatory approvals for the $5.4 billion deal.

₿ Crypto Corner

• Binance plans to shut down its buy-and-sell service Binance Connect to focus on its core product offering in spot and futures trading.

• Coinbase has secured regulatory approval to offer Crypto Futures Trading in the U.S.

• In the legal proceedings against former FTX CEO Sam Bankman-Fried, the prosecution has made an interesting move. They plan to use the personal notes and diary entries of Caroline Ellison, the former CEO of FTX's sister trading firm Alameda Research, as evidence against Bankman-Fried in the upcoming criminal trial.

Movers and Shakers

✅ Biggest Gainers

• For FY23, Ingham (ING) reported a significant profit increase of 72% to $60.4 million due to the recovery of their operations and normalised supply chain conditions. While revenue increased by 12% to $3,044m, there was a slight decline in volume by 0.4%, with Australia down 0.6% due to lower bird numbers processed from a decline in farming performance in 1H. The increase in revenue was driven by higher selling prices as underlying costs rose 11.9% Y/Y. Ingham cited key cost inputs such as feed, fuel, freight, ingredients, cooking oil, and repairs & maintenance as exceeding general inflation. As a result, ING shares rose by 14.8% to $3.19.

• IPH Ltd (IPH), the international intellectual property services provider, reported a 23% increase in NPAT to $64.5 million for FY23, raising its dividend by 9% to 17.5 cps. Growth was partly due to the contribution of the Smart & Bigger business that IPH acquired on October-22, which contributed $31.4 million in underlying EBITDA of $170.0 million. Underlying revenue in the company’s ANZ business declined by 1% due to lower patent market filings. The Asia business saw declines in Hong Kong/China as one of its key clients exited China. IPH finished 10.8% higher at $8.11.

🔻Biggest Fallers

• Domain Holdings (DHG) reported a 28% drop in net profit to $38.6m as residential housing listings in Melbourne & Sydney dropped by double-digits, which should be no surprise after REA Group reported similar declines last week. Despite the listings decrease, revenue was only down 0.5% to $345.8 million. Domain said that trading in the first six weeks of FY24 reflects some early recovery in new for-sale listings in Sydney and Melbourne; however, weakness continues in the QLD and WA market. Costs in FY24 are expected to increase in the “mid to high single range” from FY23s expense of $237.1 million. Domain finished the session 7.8% lower to $3.76.

• Nuix (NXL) share price fell by 9.1% despite reporting a 19.8% rise in statutory revenue to $182.5 million, as the company added new revenue during June and benefited from currency tailwinds. On the downside, multi-year deals fell from 40% to 30%. Nuix reported a loss of $5.6 million for the year, down from a $22.8 million loss a year earlier. Annualised Contract Value (ACV) of $185.5m was up 14.5%, with Nuix targeting a further 10% growth into FY24. Shares ended the day down 9.1% to $1.4 and are down over 80% since listing on the ASX in November 2020.

Deep Dive

Goodman Group Reports Stellar FY23 Results with 17% Rise in Operating Profits

Goodman Group, the largest listed REIT in Australia, achieved excellent FY23 results with operating profits rising by 17% to $1,783 million and EPS growth of 16%. However, due to decreased valuation gains across its portfolio, statutory profits declined by 54%. Despite this, Goodman shares saw a 5.7% increase and ended the day at $20.88.

Report Highlights vs. FY22

• Operating Profit - $1,783 million, +17%

• Operating EPS - 94.3 cps, +16%

• Statutory Profit - $1,560 million, -54%

• Assets Under Management - $81.0 billion, +11%

• Occupancy Rate of 99% occupancy

• Dividend - 30.0cps,

The company's NTA growth was driven by $6.9 billion in development completions, acquisitions, and revaluations across the Group and Partnerships, according to CEO Greg Goodman. He expressed confidence in the Group's strategic site locations and their potential to drive rental growth and development activities. Looking ahead, Goodman is optimistic about FY24, with a focus on high-barrier markets and the digital economy. The forecast distribution for FY24 remains at 30.0 cents per security, with a focus on staying in the lower half of their financial risk management policy range for gearing.

Portfolio occupancy remains strong at 99%, and the development WIP stands at $13.0 billion. The Group's focus on data storage and A.I. has led to a 30% contribution from data centres to the development workbook. Despite global uncertainties, Goodman said the Group is focused on high-barrier markets and the digital economy, exploring opportunities in multi-level industrial and data centre developments.

From an environmental standpoint, Goodman reiterated the Group's commitment to its 2030 sustainability goals, with significant progress made in renewable energy. The Group aims to achieve 400MW of solar PV by 2025.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 11th

1. Core Lithium (CXO) - 10.69%

2. Flight Centre (FLT) - 10.18%

3. IDP Education (IEL) - 9.36%

4. JB Hi-Fi (JBH) - 8.10%

5. Pilbara Resources (PLS) - 7.72%

6. Syrah Resources (SYR) - 7.69%

7. Select Harvest (SHV) - 7.56%

8. Brainchip (BRN) - 7.49%

9. Imugene Resources (IMU) - 7.06%

10. Lake Resources (LKE) - 7.05%

📊Broker Ratings

What do the brokers have to say?

• Lifestyle Communities (LIC) - Downgraded to Neutral from Buy (UBS)

• Mirvac Group (MGR) - Upgraded to Outperform from Neutral (Macquarie)

• Seek (SEK) - Downgraded to Neutral from Buy (UBS)

💲Dividends

Companies trading ex-dividend today

1. QBE Insurance (QBE) - 14cps

2. Secntre Group (SCG) - 8.25cps

3. Korvest (KOV) - 35cps

📅 Economic Calendar

Data to keep an eye on this week

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.