Five-Day Streak: Telstra Mobile Gains, Cochlear Sinks

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Welcome to Equity Espresso’s Market Recap.

The Australian share market finished higher for the fifth straight session on Thursday in another busy day of corporate earnings. The ASX 200 index added 14.8 points, gaining 0.28% to close at 7,865.50, with six main sectors finishing the day higher.

Telecommunication (+1.69%) was the best-performing sector thanks to a lift in Telstra’s (+2.05%) share price, despite the telco. reporting a 12.8% fall in Net Profit to $1.8 billion after making write-downs on its enterprise business. Telstra’s mobile earnings grew by over 9% to $5 billion after adding 560,00 new customers.

The Utilities (-4.06%) sector closed the day lower as Origin Energy (-9.43%) shares plunged after it warned that profits for the coming year could be softer than expected. Materials (-1.20%) also fell as the Iron Ore price continued to decline, with futures trading below US$94/t, the lowest level since 2022. Rio Tinto (-3.58%), Fortescue (-2.89%) and BHP Group (-1.04%) all continued to see the share price fall.

In company news:

• NRW Holdings' (+9.72%) shares hit a 12-month high after the company reported a net profit increase of 18.6% to $123.8 million.

• Cochlear (-7.33%) fell after providing weaker-than-expected profit guidance that fell short of expectations. The hearing aid manufacturer expects profit to grow by 6% - 11% in FY25. Cochlear reported an underlying net profit increase of 27% to $357 million during FY24.

• Goodmans Group (-1.28%) shares fell as it reported a 14.9% increase in Operating profit to $2.0 billion and a statutory net loss of $99 million after negative revaluation movements of $1.5 billion.

• Magellan Financial (+7.63%) jumped after it said it would take a stake in Vinva Investment Management. The fund manager reported an adjusted net profit of $177.9 million, up 2% from FY24.

Wall Street

U.S. stocks ended Wednesday's session higher, with the S&P 500 (+0.38%) making it five straight days of gains. July's inflation data added to the consensus that the Federal Reserve will cut interest rates next month.

The Dow Jones (+0.61%) also ended the day higher, thanks to rises from Goldman Sachs (+1.37%) and Home Depot (+1.60%). The NASDAQ (+0.03%) also made it five straight days of gains, albeit with the slimmest gains, as Tesla (-3.10%) and Alphabet (-2.35%) finished the day lower.

Consumer prices in the U.S. rose moderately in July, with the annual inflation rate slowing to below 3.0% for the first time since early 2021. The previous day, data on producer prices showed that inflation was still decreasing, but it had not yet reached the U.S. central bank's 2% target.

Starbucks's (-2.09%) share price fell after rocketing 24% yesterday after it announced that it is replacing CEO Laxman Narasimhan with Chipotle CEO Brian Niccol. Chili’s parent company, Brinker International (-10.71%), share price plummeted after providing weaker-than-expected full-year profit forecasts.

S&P500 Sector Performance

Economic Data

• Australia’s Unemployment rate rose to 4.2% in July, slightly above forecasts and last month’s figure of 4.1%. The figure marked the highest jobless rate since January 2022, as unemployed individuals rose by 24,000 to 637,000.

• U.S. Annual Inflation continues to slow, with a 2.9% rise during July, slightly below estimates of 3.0%. This marks the lowest figure since March 2021 and is down from June’s read of 3.0%.

• U.K. GDP expanded by 0.6% QoQ during Q2 2024 after a 0.7% increase in Q1, which aligned with forecasts.

• Japan’s GDP expanded by 0.8% QoQ during Q2 of 2024, above market forecasts of 0.5%, following a fall of 0.6% in Q1.

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🌎️ Around The Globe

• The Department of Justice is considering breaking up Alphabet following a ruling that found the company monopolised the online search market.

• Avon Products has filed for Chapter 11 bankruptcy in Delaware to offload $1.3 billion in debt amid hundreds of lawsuits alleging cancer links to talc in its eye shadows.

• Fitbit is partnering with Peloton Interactive to give its premium users access to the exercise equipment maker's fitness content starting in early September.

• Ford and Mazda have issued do-not-drive warnings for more than 457,000 vehicles containing recalled Takata airbags. Ford’s warning covers 374,290 cars from 2004-2014, comprising a range of models that were part of previous recall campaigns.

• Google has launched Gemini Live, a mobile conversational AI with advanced voice capabilities. Gemini Live lets users have “in-depth” voice chats with Gemini on their smartphones.

• Paramount will shut down its’ 11-year-old TV studio by the end of the week in a cost-cutting effort in preparation for a merger with Skydance Media.

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