ASX 200 Live Today - Friday, 17th July

Welcome to our live ASX coverage for Friday, July 17. Expect a high volume of posts pre-market and more periodic updates throughout the day. We'll be wrapping the blog up around 2:00 pm AEST. Let us know how we can make it even better.

Coles walks away from Greencross acquisition talks

[9:22 am] The supermarket giant has ended discussions with TPG Capital over a potential purchase of the pet care group, first flagged on 1 July.

• Coles has ceased discussions with TPG Capital regarding the potential acquisition of Greencross Pet Wellness Company

• The move follows its 1 July announcement confirming the talks

• Coles said it applies a disciplined approach to acquisitions and regularly assesses strategic opportunities that complement its business

Company page: Coles Group (COL)

Zip to wind down New Zealand operations

[9:19 am] The buy-now-pay-later group will exit the market to focus capital on its higher-growth Australian and US businesses, with the financial impact expected to be immaterial.

• Zip will begin an orderly wind down of its New Zealand operations following a strategic review of its business portfolio

• The exit reflects a focus on the Australian and US businesses, which it says continue to show strong momentum and profitable growth

• Financial impact of the wind down is expected to be immaterial to the group

Company page: Zip Co (ZIP)

Regis Resources guides FY27 output to 360-400koz

[9:15 am] Higher production from the Duketon mills underpins the guidance, though AISC lands well above the broker's earlier forecast on diesel and lower-margin ounces.

• FY27 group production guidance of 360-400koz

• AISC guidance of $2,990-3,390/oz

• Growth capital of $250-270m, skewed roughly two-thirds to H1, covering Rosemont Stage 3 underground and pre-strip of new Duketon open pits

• Exploration spend of $80-90m, reflecting opportunities across the portfolio, with higher McPhillamys spend to support a final investment decision in H1 CY28

• Duketon production expected higher year-on-year, skewed to H2 on stronger Garden Well and Rosemont output, while Tropicana is down slightly as lower Havana open-pit ore lifts the share of low-grade stockpile feed

• AISC sensitivity of about $25/oz per 10c/L diesel move,

  with guidance assuming $1.35/L at Duketon

I have some slightly dated Macquarie modelling (Apr-26) which have FY27 Group production at 396koz at an AISC of A$2,607. The midpoint of today's FY27 guidance sits 4.0% below for production and 22% above for costs.

Company page: Regis Resources (RRL)

Alcoa flags aluminium price weakness as sentiment, not fundamentals

[9:00 am] Management framed the late-June price retreat as macro-driven while pointing to still-tight markets, Middle East supply outages and a stronger order book at the Q2 earnings call.

• On the Q2 consensus miss: "The variance was driven by lower than expected aluminum price realisation late in the quarter, as LME prices declined sharply in the final two weeks of June," said CFO Molly Beerman, noting the pricing sensitivities assume a 15-day lag that does not capture steep quarter-end moves.

• On the aluminium price retreat: CEO Bill Oplinger attributed it to sentiment, saying the fundamentals have not changed since the Iran conflict began, with an estimated 3-3.5Mt of capacity offline within the Strait of Hormuz and another 3-4Mt in the region at risk the longer the strait stays closed.

• On China output: "We are now projecting that China will run between 45 million metric tons and 46 million metric tons of production during the course of the year," Oplinger said, above the 45Mt cap but which he characterised as creeping existing assets on high prices rather than a policy shift.

• On the Pinjarra disruption: Oplinger said an outbreak from organic compounds in the bauxite was compounded by a gas-supply curtailment tied to Cyclone Narelle, with the refinery struggling in April and May before recovering in June and now "running very well."

• On aluminium fundamentals: "The market remains tight, inventories are low. The global market is still expected to be in deficit this year," Oplinger said, adding that customers in North America and Europe are localising supply chains and lifting regional and value-add premiums even as LME prices fell.

• On the Aligroup acquisition: Oplinger pointed to about US$900m of net present value synergies including roughly US$50m of first-year run-rate cost savings, describing the assets as bought at a valuation well below replacement cost.

• On Australian mine approvals: Oplinger said his confidence in securing the permits is unchanged but "the timing could extend beyond our original expectations," with contingency plans covering a six-month delay at no impact to supply, quality or cost.

Company page: Alcoa (AAI)

Alcoa misses on Q2 profit as Pinjarra instability crimps alumina output

[8:54 am] Refinery disruption in Western Australia drove a sequential drop in alumina production and prompted the company to cut its full-year output and shipment guidance.

• Adjusted EPS of US$2.12 ex-items vs US$2.25 ests (6% miss)

• Revenue of US$3.97bn vs US$3.99bn ests (in line)

• Adjusted EBITDA of US$901m ex-items vs US$943.5m ests (5% miss)

• Alumina production down 6% sequentially to 2.2Mt, hit by lower output at the Pinjarra refinery as instability from late March was worsened by gas supply disruptions tied to Cyclone Narelle

• Aluminium production up 5% sequentially to 636,000t on the San Ciprian restart and progress at Alumar, Lista and Portland

• 2026 alumina production guidance cut to 9.5-9.6Mt, down 0.2-0.3Mt, with shipments trimmed to 11.5-11.6Mt, while aluminium guidance is unchanged

The result was announced after US market close, with Alcoa shares down 2.5% after hours.

Company page: Alcoa (AAI)

REA to exit Housing.com, lifting REA India's Aurum stake to 24.9%

[8:53 am] The sale hands REA India shares in the listed proptech rather than cash and will book a loss on divestment of about $110 million.

• REA India has signed a binding agreement to sell the Housing.com business to Aurum PropTech, receiving Aurum shares worth about $68m as consideration

• REA India's equity interest in Aurum rises to 24.9% from 5.5% on completion, to be accounted for by REA Group as a financial asset

• The deal follows a strategic review of the Indian business after the earlier PropTiger sale to Aurum and closure of Housing Edge in Q1 FY26

• An overall loss on divestment of about $110m is expected, reflecting a goodwill impairment and transaction costs

• The India business contributes about $62m to FY26 group revenue and reduces EBITDA by about $36m, and will be classified as a discontinued operation held for sale

• Completion is expected by end-Q1 FY27, subject to customary conditions including Aurum shareholder approval

Company page: REA Group (REA)

US retail sales rise 0.2% as cheaper gas masks broader spending strength

[8:52 am] A steep drop in gas-station receipts held down the June headline even as most discretionary categories advanced.

• Headline sales up 0.2% vs 0.3% consensus, after a revised 1.0% May gain

• Sales ex-autos down 0.2% vs consensus for a 0.1% decline, after a revised 1.0% May gain

• Control group sales, which feed into GDP, up 0.5% vs 0.4% consensus, after a revised 0.8% May rise

• Gas-station receipts fell 5.3%, the sharpest drop since 2022, as pump prices fell about 50 cents a gallon, while nonstore sales jumped 1.9% on Amazon Prime Day

• Seven of 13 categories rose, with gains in autos, sporting goods, electronics and general merchandise offsetting weakness in gas, health, clothing and food stores

• Rising oil from renewed US-Iran conflict clouds the outlook, with the recent relief on gas and inflation potentially short-lived

China turns up pressure on Fortescue in iron ore pricing standoff

[8:48 am] Beijing's state-backed buyer has begun delaying cargoes and restricting products as it pushes the miner to consolidate sales through its centralised procurement model.

• China Mineral Resources Group has coordinated with traders, mills and port operators to delay Fortescue cargoes, restrict some products from 15 July and discourage new purchases, echoing tactics used against BHP

• The dispute goes beyond price, focused on whether discounts negotiated directly with individual steelmakers should carry over once purchases are routed through CMRG

• CMRG wants Fortescue to keep those historical discounts across more mills while also seeking deeper concessions, which Fortescue has resisted

• The restrictions target Super Special Fines, a cheaper low-grade product many mills have geared operations around, making it hard to replace quickly

• Escalation has been faster than with BHP, suggesting CMRG is now working from an established playbook that could mean blocking more products

Source: Bloomberg

Two Fed hawks push for higher rates as inflation stays above target

[8:46 am] Kansas City's Schmid and Dallas's Logan both argued a single soft June print does not change an inflation picture they see as too hot for too long.

• Logan said modestly higher rates would better balance the dual mandate, calling for finishing the job on inflation rather than reading much into one month of relief

• Logan put headline PCE at 4.1% over the 12 months through May and core PCE at 3.4%, up 0.4 points since December, with her best judgement that inflation is heading toward the mid-2s rather than back to 2%

• Schmid said inflation (ex-energy) is still solidly above 2% and services inflation has been trending higher, with prices above target for five straight years

• Both flagged renewed Middle East conflict and rising oil as an upside inflation risk, and both pointed to the AI investment surge already lifting prices in narrow categories like chips

• Schmid renewed his call to stop excluding food from core inflation, arguing food prices now behave more like other prices and that energy is roughly 10 times as volatile as headline

• Logan noted the labour market looks solid, with unemployment averaging 4.3% in the first half and about 92,000 jobs added a month, leaving little case for easier policy

US steps up Iran strikes for sixth day

[8:41 am] A collapsed ceasefire and a reinstated US naval blockade have shut most Strait of Hormuz traffic, tightening global fuel supply as prices climb.

• US struck Iran for a sixth consecutive night, hitting command centres, air defences and a port city, while Iran retaliated against Gulf states and warns Hormuz is an "unbreakable red line"

• The US has reimposed a naval blockade on Iranian ports, disabling one tanker bound for Kharg Island and enforcing it with more than 10,000 personnel, two carriers and over 20 warships

• Hormuz traffic, which normally sees about 110 ships a day, fell to just three vessels in 24 hours

• Tehran has told the Houthis to ready an attack on the Bab el-Mandeb strait, which now carries about 7% of global energy supply, if the US hits Iranian power infrastructure, threatening both main export routes at once

• US diesel futures have jumped about 20% since early last week, with retail diesel hitting US$5.01 a gallon and analysts flagging a further 20-25 cents given stockpiles near two-decade lows and Russia's export ban

• Trump scrapped a proposed 20% Hormuz transit fee in favour of Gulf investment pledges but kept the blockade in place, with no sign of a return to talks

Short sellers pile into SpaceX as stock breaks below IPO price

[8:39 am] Bearish positioning has surged since last month's float, with short interest now near a third of the tradable stock as SpaceX slips under its $135 debut price.

• Short sellers are sitting on roughly US$8.7bn in paper profit since the IPO

• About 185m shares are sold short, near 29% of the free float and around US$25bn in wagers, up from roughly 40m shares (5-7%) three weeks ago, per S3 Partners

• Stock is down about 20% in July and briefly fell below the US$135 IPO price on Wednesday for the first time before recovering to around US$131-136

• Large short position adds volatility risk, with every US$1 move worth more than US$300m to the short side

• A lockup unlock of about 11% of shares outstanding could hit around Q2 earnings, with Elon Musk's roughly 42% stake locked until June 2027

US mortgage rates climb to 6.55%, highest in nearly a year

[8:39 am] Renewed Middle East tensions have pushed Treasury yields and borrowing costs higher, adding pressure to an already strained housing market.

• The 30-year fixed rate rose to 6.55% from 6.49% a week earlier, the highest since late August 2025, per Freddie Mac

• Rates climbed for a second straight week, tracking Treasury yields higher as the US-Iran ceasefire collapsed

• Sellers outnumbered buyers by almost half a million in June and listings are lingering longer, per Redfin, yet the median sale price hit a fresh record on strength among wealthier buyers

Source: Bloomberg

Bond traders bail on Fed hike bets as inflation cools

[8:39 am] Two soft inflation prints have flipped market pricing from at least one Fed hike this year to the possibility of none.

• Two straight below-consensus inflation reports (CPI Tuesday, PPI Wednesday) reset the outlook from a July hike still on the table to possibly no move at all

• Swaps now imply about 3bps of tightening for the 29 July meeting, roughly 13% odds of a quarter-point hike, down from about 40% at the start of the week

• December contracts price 29bps of tightening, down from 43bps a week earlier

• SOFR put selling dominated options trading as traders unwound hike hedges, with falling open interest confirming exits rather than fresh positions

Source: Bloomberg

TSMC beats and lifts capex as AI demand drives guidance above ests

[8:38 am] Record profit growth, a raised capital budget and a Q3 revenue outlook well ahead of expectations underscored strong AI accelerator demand. However, TSM shares struggled for upside, closing 2.3% lower.

• Revenue up 34% to US$40.2bn

• Net profit up 77% to US$22.36bn vs US$19.74bn ests (13% beat)

• Gross margin of 67.7% vs 67.1% ests (60bps beat)

• EPS of US$4.31 per ADR vs US$3.83 ests (13% beat)

• Capex raised to US$60-64bn from US$52-56bn, with the next three years flagged as significantly higher again

• Q3 revenue guide of US$44.6-45.8bn vs US$43.11bn ests (5% beat at midpoint)

• Announced an extra US$100bn Arizona investment, lifting the total US plan to US$265bn across up to 10 fabs and 2 packaging sites

Netflix tumbles after hours as free cash flow and guidance disappoint

[8:35 am] A soft Q3 revenue and earnings outlook plus a big free cash flow miss overshadowed a modest Q2 beat. The result was announced after market close, with Netflix shares currently down 8.4% after hours.

• Revenue up 13% to US$12.56bn vs US$12.59bn ests (in line)

• EPS up 11% to US$0.80 vs US$0.79 ests (1% beat)

• Operating margin down 70 bps to 33.4%

• FCF down 33% to US$1.53bn vs US$2.72bn ests (44% miss), hit by higher cash tax payments partly tied to the WBD termination fee

• Share repurchases of US$4.7bn, the largest quarter to date

• Q3 guide of US$12.86bn revenue vs US$13.01bn ests and US$0.82 EPS vs US$0.84 ests both land short

UnitedHealth tops earnings expectations, lifts full-year guidance

[8:33 am] A sharp drop in the medical care ratio drove a large Q2 earnings beat, prompting a raised full-year outlook well above market expectations. The stock rallied as much as 10.3% in early trade but finished the session up just 1.1%.

• Revenue flat at US$112.0bn vs US$110.8bn ests (1% beat)

• Adjusted EPS up 56% to US$6.38 vs US$4.85 ests (32% beat)

• Medical care ratio of 86.7% vs 88.6% ests, down 270bps

• UnitedHealthcare operating income up 86% to US$3.9bn, well ahead of the ~41% growth expected

• FY26 adjusted EPS guide lifted to US$19.50-20.00 vs US$18.32 ests, with buybacks raised to at least US$5.0bn from about US$2.5bn

Good morning!

[8:23 am] ASX 200 futures are up 15 pts (-0.17%).

The overnight session in a nutshell:

• Major US benchmarks lower but off worst levels, as chip stocks sold off for a second day but Staples (+2.9%), Healthcare (+2.2%) and Real Estate (+2.1%) sectors surged 

• S&P 500 (-0.51%), Nasdaq (-1.47%), Dow (-0.20%) and Russell 2000 (-0.06%) broadly lower, but strong breadth drove the Equal-weight S&P 500 (+0.98%) to a record close

• A strong TSMC quarterly failed to lift semiconductors, with a lifted capital-spending outlook and AI-spend jitters dragging memory and equipment names lower

• The US-Iran war escalated further, a fifth straight night of US strikes near the Strait of Hormuz kept oil bid and Treasury yields firm

• South Korea issued a temporary ban on single-stock leveraged trading products, gold and copper prices tumbled overnight and Fed policymakers issued hawkish remarks