Streak Breaker: ASX Dips After 10-Day Run, Inghams and Accent Group Stumble

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Welcome to Equity Espresso’s Market Recap.

After ten straight days in the green, the ASX 200 ended its positive streak, closing down 0.16% or 13.2 points at 8,013.8. Despite an afternoon rally briefly suggesting another positive day, the index couldn't maintain its upward momentum.

The fall came after the U.S. markets experienced a downturn on Thursday, with the tech-heavy Nasdaq suffering the most, dropping 1.7%. Investors showed caution ahead of Federal Reserve Chair Jerome Powell's anticipated address at the annual Jackson Hole economic symposium in Wyoming.

Despite today’s fall, the primary ASX 200 index ended the week positively, up by 0.66%, making it six positive weeks in the last eight.

Utilities (-1.34%), Energy (-1.14%), and Materials (-0.66%) dragged the market down today, with Origin Energy (-2.00%), Yancoal Australia (-3.30%), and Whitehaven Coal (-7.19%) among the worst performers on the day.

Here’s your Corporate Earnings Wrap-Up

• Accent Group (-15.29%) reported a 32.9% decrease in net profit to $59.5 million for the latest financial period, despite a 2.4% increase in sales to $1.454 billion. The company declared a final dividend of 4.5¢ per share. However, Accent Group's fiscal 2025 has started positively, with total sales up 8.7% and like-for-like sales up 3.5% in the first seven weeks compared to the previous year.

• Fisher & Paykel Healthcare (+11.90%) was one of the day's best performers after it raised its fiscal 2025 profit forecast to NZ$320-370 million, with anticipated sales of NZ$1.9-2 billion. The company attributes this improved outlook to recent product launches and hospitals resuming normal operations.

• Inghams Group's (-20.16%) stock price plunged on a weaker FY25 outlook. The company forecasts a slight decline in poultry volume and projects underlying earnings of $236-250 million, citing economic pressures on consumers. For FY24, net profit surged 68% to $101.5 million, driven by strong chicken sales and improved margins.

• Jumbo Interactive (-16.20%) reported strong FY24 results, with revenue up 34.2% to $159.3 million and underlying NPATA up 31.5%. However, the stock fell due to lower-than-expected FY 2025 guidance, particularly an anticipated decline in EBITDA margin to 46-48%, below market expectations and previous years' performance.

• Latitude Financial (-1.71%) reported a significant turnaround in its 1H FY24 results, with cash profit surging 140% to $27.4 million. The company saw strong volume growth of 14% to $4.1 billion and improved net interest margin.

• Telix Pharmaceuticals (-3.03%) stock fell despite reporting strong financial results for the first half of 2024, with a net profit of $29.7 million and a 65% increase in sales to $364 million. The company said it remains confident in meeting its 2024 revenue guidance of $745-$776 million, projecting a 48-54% growth from the previous year.

Wall Street

U.S. stock indexes declined on Thursday, with Technology companies leading the downturn as Treasury yields increased amid reduced recession concerns. The NASDAQ fell 1.67%, heavily impacted by the "Magnificent Seven" megacap stocks. The S&P 500 and Dow Jones also dropped 0.89% and 0.43%, respectively, as central bankers gathered for the Jackson Hole Economic Symposium.

What the frick is the Jackson Hole Symposium anyway, and why does it matter? Find out here.

Technology (-2.13%) led the decline, followed by Discretionary (-1.87%) and Communication Services (-0.93%). Only three sectors gained, with Real Estate (+0.56%) and Financials (+0.48%) leading the positive performers.

Deutsche Bank's U.S. shares rose over 3% after settling with nearly 60% of plaintiffs in the Postbank acquisition case. The bank agreed to pay €31 per share, allowing it to release €430 million in provisions and boost its third-quarter pretax profit by the same amount. Peloton (+35.4%) reported its first sales increase in nine quarters, with revenue growing 0.2% in Q4. The company narrowed losses to $30.5 million from $241.1 million year-over-year, focusing on profitability through reduced marketing spend.

S&P500 Sector Performance

Economic Data

• Japan’s Annual inflation rate was 2.8% in July 2024, holding steady for the third consecutive month while remaining at its highest point since February.

• Japan's Core Inflation Rate (excluding fresh food) increased by 2.7% year over year in July 2024, which is in line with expectations.

• U.S. Initial Jobless Claims rose by 4,000 to 232,000 during the week ending August 17, slightly ahead of expectations of 230,000 - hitting a three-week high.

• U.S. Manufacturing PMI fell to 48 in August 2024 from 49.6 in July, well below market expectations of 49.6. This marks the second consecutive contraction in the sector.

• U.S. Services PMI rose to 55.2 in August from 55 in the prior month, ahead of analysts’ estimates of 54.

• U.S. Existing Home sales rose by 1.3% during July to an annualised rate of 3.95 million after a 5.4% decline in the previous month.

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🌎️ Around The Globe

• Ford Motor Company is cancelling its planned three-row electric SUV and has delayed the electric version of its bestselling F-150 pickup. The company expects to incur about $1.9 billion in related expenses.

• JT Group is acquiring Vector Group Ltd., a discount cigarette maker, for approximately $2.4 billion. The Japanese tobacco company is offering $15 per share, a 7.2% premium over Vector's Tuesday closing price. This move aims to expand JT Group's presence in the U.S. market.

• Halliburton was hit with a cyberattack that affected certain company systems. The U.S. oilfield services firm said it was actively investigating the cause and extent of the issue.

• China Wars—Shein has filed a lawsuit against its rival Temu, alleging multiple infractions. The fast-fashion retailer accuses Temu of intellectual property theft, trade secret misappropriation, and brand impersonation. Shein also claims Temu is misleading consumers through deceptive marketing practices, manipulating search results, and unlawfully using Shein's proprietary data.

• Volkswagen is finalising details for the U.S. ID Buzz electric van launch later this year. The company is announcing that the long-wheelbase, seven-seat Pro S model will start at $59,995.

• Instagram is testing a potentially significant change to profile pages: making the squares in the profile grid vertical rectangles.

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*1-year, 3-year and 5-year returns are calculated as of 31 July 2024.

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