Good Evening,

Welcome to the ASX News Daily Recap.

Lost track of what happened today? Don’t stress. We’re here to catch you up.

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

1. 🏉 Pointsbet continues to kick goals

2. 🛍️ We take a look at June Retail Sales

3. 🪄 Is SBF the Houdini of Crypto?

4. 🥼 Superconductor Breakthrough?

5. 🍚 Got Rice?

The Recap

Despite Today’s Dip, July Marks Continued Green Momentum

The ASX ended the day 0.70% or 51.9 pts lower after a sluggish lead-in from Wall Street overnight. A surprisingly weaker-than-expected retail sales report was today's only critical data point - more on that in today’s Top Story. Overall, it was a positive week for the ASX, ending the week in the green and closing out July 4.02% higher in what’s proving to be a great 2023 so far for markets.

Lots of red today, with 8 of the 11 sectors finishing the day in the lower. Real Estate (-1.85%) and Materials (-1.12%) fell the most, whilst Utilities (+0.12%) posted modest gains.

As we tick over next week to August, companies will begin publishing their FY23 earnings reports. Some of the more prominent companies on the ASX to report next week include - Janus Henderson, BWP Trust, Credit Corp, Genworth, Block, and ResMed. We’ll have you covered throughout the earnings season!

Over in the U.S., the streak ended for the Dow Jones, closing down 0.67%, with the 2-year and 10-year bond yields trading higher. The Q2 advanced GDP read of 2.4% exceeded estimates of 1.8%. The S&P500 (-0.64%) and NASDAQ (-0.55%) also fell, despite Meta’s 4.4% rise in regular trading on Thursday.

Economic News

• The Advanced US GDP in the June quarter came in unexpectedly hotter, supporting the Federal Reserves’ narrative that inflation might be stickier than we would like. Gross Domestic Product rose at a 2.4% annualised rate - well above estimates of 1.8% with consumers resilient in the face of rising interest rates.

• U.S. Jobless Claims came in lower than expected at 221k, a drop from 228k and below estimates of 235k.

• Closer to home, the RBA meets next Tuesday, where economists have a mixed view on what they will do with the cash rate.

• The European Central Bank followed the script, raising interest rates by 0.25% to 3.75% - making it nine rate increases in a row. The focus turned to the next meeting in September, with European markets trading higher as some economists believe we could be nearing the end of the rate rises. The ECB said that it would keep rates high enough to restrict economic activity “for as long as necessary” to bring down inflation.

• Japan’s benchmark government bond yield rose above the central bank’s ceiling amid speculation that policymakers are discussing loosening their tight grip on interest rates. The 10-year yield climbed to 0.505% during Friday’s session, above the Bank of Japan’s cap of 0.5 per cent, as pressure builds on the BoJ to adjust policy.

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Charts and Prices

Index & Commodity Prices

ASX By Sector

ETF Watch

Quick Singles

Local News 🪃

• Rice prices have hit decade highs after India’s decision last week to block exports of non-basmati rice exports to keep prices low at home. Your Rogan Josh just got more expensive!

• Westpac and CBA expect the Reserve Bank to raise the cash rate at next week’s meeting to 4.35%. On the other hand, NAB says the softer-than-expected retail data should see the Reserve Bank keep the cash rate on hold next week. ANZ agrees, saying weaker retail sales out today should deter the Reserve Bank from raising rates further.

• Centaurus Metals is in a trading halt pending an announcement regarding a capital raising.

• Liontown said that its Kathleen Valley Lithium project remains on target for production by mid-2024. The company reported cash holdings of $305.4 million as of June 30.

• BeforePay finished the day 14% higher after reporting a positive Q4 EBITDA of $0.57m - its first profitable EBITDA as a public company. Quarterly operating revenue increased 49% from PCP.

• Champion Iron fell by 2.7% to $5.84 after reporting quarterly production of 3.4 million wet metric tonnes of iron ore concentrate for the June quarter - an increase of 10% from the prior quarter.

• Estia Health said it continues to engage in constructive discussions with Bain Capital about a potential takeover despite Bains exclusivity agreements ending on July 27. Bain proposed to acquire the residential aged care provider for $3.20 per share

Around The Globe 🌏

• Meta, Microsoft, Amazon Web Services, and TomTom are collaborating on an initiative called Overture Maps Foundation, which aims to provide cleaned map data for free, enabling companies to develop their own map applications without relying on the tech giants.

• Mastercard has told financial institutions to stop allowing marijuana transactions on its debit cards, dealing a blow to an industry already on the fringes of the financial system in the United States.

• Apparel giant Gap has appointed branding veteran and one of the key people behind reinvigorating the Barbie franchise, Richard Dickson, as its new CEO. Mr Dickson has spent much of his career at Mattel and was the CEO of the company’s Barbie franchise.

• Seven of the world's largest automakers are forming a new company to build a vast network of electric vehicle (E.V.) chargers across America. The joint venture aims to become "the leading network of reliable, high-powered charging stations in North America." 

Top Story

From Retail Highs to June Sighs - Wallets Tighten as Rates Rise

Retail sales in Australia took an unexpected downturn in June, with a decline of 0.8% month-on-month, according to the latest data from the Australian Bureau of Statistics (ABS). This comes on the heels of a promising 0.7% gain in May, with markets forecasting a flat outcome for June.

A closer look at the data reveals that department stores suffered the most:

• Department Stores (-5.0%)

• Clothing (-2.2%)

• Footwear (-2.2%)

• Household Goods (-0.1%)

Food fared better, with cafes, restaurants, and takeaway food services seeing a +0.3% rise, whilst food retailing experienced a slight uptick of +0.1%.

ANZ economists believe that this downturn strengthens the case for the Reserve Bank of Australia (RBA) to maintain the cash rate at 4.1% in next week’s meeting, saying, "Spending is slowing as household budgets are squeezed by rising mortgage payments and cost of living pressures,"

This sentiment was echoed by Ben Dorber, ABS head of retail statistics, who attributed the sharp decline in June to weaker spending during the end of financial year sales. He highlighted that while there was a surge in discounting and promotional activity in May, it was short-lived as consumers reined in spending the following month.

Geographically, NSW (-1.1%), VIC (-1.3%), QLD(-0.7%), S.A. (-0.2%), and the ACT (-1.0%) all reported declines in sales. In contrast, WA (+0.5%) and TAS (+0.6%) witnessed modest growth.

Monthly Retail Turnover - % Change & Turnover level

Movers and Shakers

✅ Biggest Winners

SiteMinder (SDR) was one of the bigger winners in today’s market, posting strong revenue growth of over 30% YoY, reaching $151.4m - with an increase of 19% in subscription revenue and 66% in transaction revenue. Despite reporting an underlying negative FCF of ($34.0m), SiteMinder reiterated its growth guidance and expects to become EBITDA profitable and FCF positive by H2FY24. The company ended the day 21.5% higher to close at a 6-month high of $4.29.

Pointsbet (PBH) rose in a day of slim pickings for winners, ending the day 1.5% higher to close at $1.68. PBH reported a 10% increase in its Total Net Win for the quarter of $61.1m from its remaining Australian and Canada business’, taking the full-year result to $230.0m - a 7% rise from the PCP. As a result of the sale of its U.S. business, it expects significant cost reductions in FY24 and expects to report breakeven EBITDA by April 2024.

🔻Biggest Losers 

Capricorn Metals (CMM) fell by 8%, caught up in the broader sell-off of gold miners after reporting gold production of 28,859 ounces in Q4 2023 at their Karlawinda Gold Project (KGP), slightly down from 30,841 ounces in Q3. Capricorn achieved a record annual production of 120,014 ounces with an AISC of $1,208 per ounce. The company provided a forecast of FY24 production of 115,000 – 125,000 ounces and an AISC of $1,270 - $1,370 per ounce. The forecasted production reduction and higher costs may have been the catalyst for the share price fall.

Resolute Mining (RSG) took another tumble today in a bad trading day for gold miners. Resolute updated the market yesterday with a weaker-than-expected production outlook of 415koz - 455koz after producing 458.4koz in FY23. After a 10% drop yesterday, shares fell by another 7% today, closing at $0.38 to end the week.

Crypto Corner

FTX Founder Sam Bankman-Fried Sees Key Charge Dropped: What's Next?

Why was SBF Charged?

In case you need a refresher - Sam Bankman-Fried, the founder of the crypto exchange FTX, has been under the legal microscope for allegedly precipitating the collapse of his crypto exchange through a multibillion-dollar fraud.

Initially, he faced multiple charges, including wire and securities fraud, conspiracy to make unlawful campaign contributions, and violating anti-bribery statutes. Prosecutors alleged that Bankman-Fried funnelled vast sums in bipartisan campaign financing to sidestep contribution limits.

What this latest development means?

Federal prosecutors have decided not to pursue the campaign finance charge against Bankman-Fried. This decision came after the U.S. Attorney's Office in Manhattan realised they had not obtained permission from the Bahamas government for this charge when Bankman-Fried was extradited in December.

This marks the second time charges against him have been narrowed, with a previous charge related to anti-bribery statutes also being dropped on similar grounds.

The Bahamas has now clarified that they did not intend to extradite Bankman-Fried for the campaign contribution charge, leading the U.S. government to respect its treaty obligations and drop the charges.

So What’s Next?

Despite the dropped charge, Bankman-Fried is not out of the woods yet. He still faces other charges and is expected to face trial later this year.

Several former FTX executives, including Caroline Ellison, Gary Wang, and Nishad Singh, have pleaded guilty to federal charges and are cooperating with the government's prosecution against him.

Prosecutors have accused Bankman-Fried of intimidating and attempting to discredit former Alameda Research CEO Caroline Ellison by leaking her private journals to The New York Times.

In response to these allegations, stricter bail conditions have been imposed on him, and imprisonment's possible before his scheduled October trial. Both sides have until August 3 to present their views on whether jailing Bankman-Fried is necessary.

Crypto Price Watch

What The?

From time to time, we find an eye-opener we have to share

The Biggest Physics Discovery off-all time?

Scientists from Korea have announced the synthesis of a new superconducting material, LK-99, that operates at room temperature and standard pressure, which could be one of the most monumental physics discoveries in recent times.

Superconductors are unique materials where electrical resistance disappears, and they repel magnetic fields. Their potential applications are vast, from creating powerful magnets to minimising energy loss in electrical circuits. Recent papers suggest that this new superconductor can be produced relatively easily, sparking widespread enthusiasm in the scientific community.

Some experts, however, are tempering caution, pointing out that research is yet to undergo rigorous peer review and is yet to be replicated elsewhere.

So How Can This Be Used?

• Energy Efficiency: One of the most significant challenges in our current electrical systems is the loss of energy during transmission. Superconductors, by their very nature, have zero electrical resistance. This means electricity can travel through them without loss, leading to highly efficient power grids and reduced energy wastage.

• Revolutionizing Transport: Imagine trains levitating above tracks, thanks to the repelling magnetic fields of superconductors. Known as Maglev (Magnetic Levitation) trains, they could travel at unprecedented speeds with minimal friction, transforming our public transport systems.

• Medical Advancements: MRI machines, used for detailed imaging in hospitals, rely on superconductors. Room-temperature superconductors could make these machines more affordable, accessible, and powerful.

• Compact Electronics: Since superconductors can carry more significant amounts of current compared to conventional conductors of the same size, electronic devices could be made more compact without compromising performance.

We came across this thread tweet that went into a lot more detail about what this could all mean - at the time of writing, it has over 28.5m views!

Broker Reports

• ImpediMed (IPD) upgraded to a Spec. Buy from Hold (Morgans) - P.T. $0.25

• Paragon Care (PGC) downgraded to Hold from a Buy (Bell Potter) - P.T. $0.26