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.

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New updates

ASX 200 lower for the week, miners and small caps tumble

[2:15 pm] That's a wrap! The ASX 200 is down 63 points (-0.72%) to 8,777.1, while seven of eleven sectors are trading higher, it's been a brutal session for miner, with most heavyweight names like BHP, Rio Tinto, South32 and Northern Star down 3-4%. The Materials index is down 3.1%, trading right on the key 200-day moving average and set to close at the lowest since 7 April. Defensives outperformed, with Energy up 1.49%, Utilities up 1.19%, Staples up 1.10% and Telcos up 1.05%. The pain was worst towards the smaller end of town, with the S&P/Small Ordinaries is down 1.95% and the Emerging Companies index now at its lowest since 24 March, off 8.3% across the past nine sessions. While the ASX 200 is down just 0.33% for the week, the strength in banks, energy and discretionary has masked the carnage underneath.

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Top ASX 200 gainers and losers for the week

[1:38 pm] Mesoblast tops the leaderboard after delivering a solid commercial debut for Ryoncil in paediatric steroid refractory acute graft versus host disease, while a sea of gold, defence and uranium stocks struggled.

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Commodities trading mostly lower, miners near three-month low

[12:42 pm] Weakness was broad-based across the commodity complex, with precious and base metals mostly in the red.

• Silver fell 1.05% to US$54.89, while palladium slipped 0.29% to US$1,246.39

• Gold edged down 0.06% to US$3,974.13

• Copper fell 0.80% to US$6.27, while nickel dropped 1.10% to US$16,862.53

• Singapore iron ore futures up 0.05% to US$99.35

Miners are getting smashed today, with the S&P/ASX 200 Materials Index down 3.1%, currently trading right on the key 200-day moving average. No miners are safe, with notable declines for Evolution Mining (-4.8%), Liontown (-4.3%), Sandfire (-4.3%), Iluka Resources (-3.9%), BHP (-3.2%), MinRes (-3.0%) and South32 (-3.0%).

S&P/ASX 200 Materials daily chart (Source: TradingView)

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APA wins AER approval for $213m South West Pipeline expansion

[12:40 pm] The regulated expansion will add compression capacity to move more Otway Basin gas into Victoria's transmission system to meet projected peak-day shortfalls from 2029.

• The AER approved APA's $213m expansion of the South West Pipeline, including two new compressor stations at Pirron Yallock and Stonehaven

• A further $31m was approved for early works to keep open a future looping option across the South West and Brooklyn-Lara pipelines

• The compression solution is about 40% cheaper than partial looping and about 60% cheaper than full looping for the same capacity

• The investment will be funded from existing balance sheet capacity and forms part of APA's $3bn organic growth pipeline, joining the asset's regulated base at regulated returns

• It adds to more than $700m already invested over four years in the East Coast Gas Grid, plus a further $260m committed in February 2026 to lift north-south capacity by 11%

• Work starts immediately, with compression unit procurement targeted for end-July 2026

The announcement was released at 11:51 am, APA shares are up 0.9% to $10.15 at the time of writing.

Company page: APA Group (APA)

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Regis Resources slides as FY27 guidance disappoints on costs

[12:39 pm] The market focused on AISC and growth capex running well ahead of expectations, with the production and cost guide both landing softer than Macquarie's earlier modelling.

• Shares fell 7.4% as the FY27 guide came in softer than anticipated, with sentiment cautious on the near-term production outlook

• The 380koz production midpoint sits about 4.0% below Macquarie's April estimate of 396koz, while the $3,190/oz AISC midpoint is about 22% above the broker's $2,607 forecast

• Growth capital questioned, with the $250-270m guide running significantly above consensus alongside stepped-up exploration commitments

• AISC performance was still viewed as resilient given operational headwinds at Tropicana, where lower Havana open-pit ore lifts the share of low-grade stockpile feed

Company page: Regis Resources (RRL)

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Gold miners continue to tumble

[11:37 am] The All Ords Gold Index is copping another beating, down 4.0% and on the cusp of trading at the lowest since September 2025. The index is now down 22.7% year-to-date and down 36.5% from its 3 March record high.

All the gold names below are down today, and all except Genesis are negative for the week.

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Analysts' take on Netwealth

[11:34 am] Netwealth's Q4 update on Thursday confirmed FUA ahead of consensus and strong growth on pcp, driven by favourable market movements as net flows had already been disclosed the prior week, with flow softness reflecting elevated withdrawals from a small number of ultra high net worth accounts and caution linked to proposed tax changes that management viewed as temporary. The stock closed 1.4% higher on the day.

• E&P retained Positive, lowered target from $35.40 to $35.30, flagging ultra high net worth outflows and slowing managed account momentum as watchpoints, with revenue density pressures driving modest earnings downgrades.

• Bell Potter retained Buy, target unchanged at $30.00, highlighting strong gross inflow growth and record managed account trailing annual flows, while noting noncustodial holder identification assets carry different revenue economics.

• Jarden retained Neutral, lowered target from $25.00 to $24.70, estimating the wealthy client outflows were tied to personal capital events while platform market share continued rising and account and intermediary growth showed strong momentum.

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Analysts' take on BHP

[11:32 am] BHP delivered a Q4 on Friday that was in line with expectations with all assets meeting guidance and net debt closing below broker forecasts on divestment proceeds and strong cash generation, though maiden FY27 copper guidance disappointed on grade decline at Escondida, ore variability at Spence and a conveyor failure at Carrapateena.

Shares closed 2.3% lower against a flat market, largely reflecting the lower FY27 copper outlook and increased capex at Jansen.

• UBS retained Neutral, lowered target from $60.00 to $59.00, noting a solid quarter with contained costs and a net debt beat, though FY27 guidance sat modestly below consensus across key commodities.

• RBC Capital Markets retained Sector Perform, target unchanged at $57.00, seeing FY26 production in line with FY27 copper guidance slightly light on Copper SA, while flagging the Vicuña FID as a potential top five mine.

• Goldman Sachs retained Buy, lowered target from $63.60 to $63.50, noting coal beat consensus while the copper guidance disappointed and the Copper SA downgrade raised execution risk questions ahead of the November site tour.

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Cleanaway to book $27.5m provision as it appeals landfill levy ruling

[11:31 am] The waste group is challenging a Victorian Supreme Court decision on historical landfill levy underpayments at Melbourne Regional Landfill while provisioning for disputed amounts across three years.

• Cleanaway has appealed the Supreme Court decision on the FY18 landfill levy underpayment at Melbourne Regional Landfill, which totals $6.9m

• The EPA has claimed further underpayments of $4.7m for FY19 and $7.2m for FY22 on similar products, neither of which was part of the Supreme Court proceedings

• A $27.5m provision will be taken for the FY18, FY19 and FY22 levies plus assessed costs and accrued interest, treated as an underlying adjustment

• The FY27 cash flow impact is about $12.3m, covering payment of the disputed FY18 levy and associated costs and interest

The announcement was released at 11:05 am, marked as non-price sensitive. Cleanaway shares are down 0.4% to $2.33 at the time of writing.

Company page: Cleanaway Waste Management (CWY)

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ASX 200 dips as heavyweight banks and miners fall

[11:00 am] The S&P/ASX 200 is down 0.66% in early trade as weakness from heavyweight banks and miners offset strength from everywhere else.

S&P/ASX 200 sectors (Source: Market Index)

The market's largest companies are weighing on the index, with BHP now down ~5% in the last two sessions.

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Macquarie upgrades Woodside to outperform on Exxon takeover appeal

[10:36 am] The broker argues the Strait of Hormuz crisis has de-rated Qatari LNG and could spur M&A, making Woodside a viable target for a US major able to unlock value through an all-stock offer.

• Upgraded to Outperform from Neutral, with the price target lifted 9% to $32.80

• ExxonMobil is the speculated suitor, having missed out on pre-empting Hess' Guyana oil assets and now reportedly screening LNG acquisitions including Woodside

• US majors trade on 40-50% higher multiples than European and Australian energy names, enabling all-stock offers that unlock value unavailable in Woodside's current structure

• Synergies in Exxon's hands are estimated above US$20bn (about $17/share), roughly half from the discount rate differential plus LNG portfolio uplift, asset integration and cost savings

• Deal hurdles include FIRB approval, potential board reluctance and a large retail shareholder base, likely requiring a local Exxon CDI listing, CGT rollover relief and a special fully franked dividend

• Strategic appeal is seen supporting the shares, with a floor pegged at $25-26, though Macquarie advises against paying a full takeover premium without evidence of an approach

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A rough day for copper names

[10:34 am] Copper stocks are down 2-4% in early trade after copper prices slipped 1.4% overnight to US$6.31/lb.

Despite copper prices trading flattish over the past week, the average copper stock below is down 2.9%.

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SpaceX slips as Starship test launch scrubbed on engine failure

[10:33 am] The company aborted Thursday's 13th major Starship mission when some engines failed to fire, pushing the stock lower again after a run of recent weakness.

• Starship remained on the pad at the planned 5:45pm liftoff after an engine failure triggered an automatic launch abort, with SpaceX offloading propellant and targeting another attempt in a few days

• Shares fell about 3% postmarket after closing lower in regular trading, and traded more than 6% down on the Blue Ocean platform ahead of Friday's US session

• The test was the first since June's IPO, which raised about US$86bn, with the stock having soared then slumped, though analysts remain largely bullish

• The V3 rocket is central to Musk's ambitions for space-based data centres, Starlink expansion and crewed moon and Mars missions, with full reusability targeted before year-end

• SpaceX holds US$4bn of NASA contracts to land astronauts on the moon as soon as 2028, which will require in-space refuelling and a dozen or more consecutive launches

• More than US$15bn has been spent developing Starship, which has yet to complete a full orbital mission

Source: Bloomberg

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Top ASX 200 gainers and losers

[10:30 am] Coles rallies as it walks away from a potential Greencross buyout, AMP extends gains after yesterday's profit update, while gold, copper and uranium names trade broadly lower.

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Macquarie stays constructive on lithium as equities sell off harder than prices

[10:02 am] The broker views the recent share price weakness as disproportionate to fundamentals, keeping IGO as its preferred exposure as the confirmed Jianxiawo restart weighs on CY27 supply expectations.

• Lithium equities have sold off more sharply than prices, with LTR down about 45% and PLS, IGO and ELV down about 30% since June, against a roughly 15% fall in lithium prices

• Spot spodumene has retraced to about US$2,200/t from a May peak of US$2,890/t, while front-month GFE lithium carbonate futures fell to a late-June low of Rmb145,000/t (US$21,350/t)

• IGO is the preferred name, offering attractive free cash flow yields across price scenarios without major project commitment

• The Jianxiawo lepidolite mine restart in early July is seen driving near-term weakness, with incremental CY26 lithium carbonate supply estimates ranging widely from 18-40kt given limited ramp-up visibility

• Restart risks remain, with two of three refineries fully shut during the 11-month suspension and the environmental approval application still under review

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UBS holds BHP at Neutral as strong Q4 is offset by soft FY27 guidance

[9:58 am] The broker trimmed its price target about 1% to $59.00 after BHP hit FY26 output and cost targets but guided FY27 production below consensus across all key assets on Thursday.

• Retains a Neutral rating and cuts the price target to $59 from $60

• FY27 production guidance came in soft, with copper about 15kt, WAIO about 1Mt and BMA about 0.5t below consensus, with unit cost and capex guidance due with results on 18 August

• June-quarter iron ore sales of 75Mt were in line, with realised prices of US$6.53/lb copper up 8% on consensus and the benchmark discount broadly unchanged despite the CMRG contract

• Net debt guided to about US$9bn at June 2026, down from US$14.7bn in December and below the US$9.5bn consensus, helped by US$5.2bn of disposals and strong free cash flow

• FY27 copper guidance of 1.65-1.8Mt marks a step down from FY26's 1.96Mt on Escondida grade decline and preparatory work at Copper South Australia ahead of the FY28 smelter rebuild

• Jansen Stage 1 is about 84% complete and on track for first production in mid-CY27, with Stage 2 at 16% and first production targeted late FY31

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Corporate Travel Management company secretary to resign

[9:35 am] Shelley Sorrenson will step down as Company Secretary and Group Chief Legal Officer effective 14 August 2026, with the company to update the market once a replacement is appointed.

CTD shares have been suspended from ASX trading since 22 August 2025, when the company requested a trading halt, then four days later moved into voluntary suspension while it investigated potential rectification and restatement of prior financial statements.

Company page: Corporate Travel Management (CTD)

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Why I'm watching Coles today

[9:30 am] Coles has made the level-headed decision not to pursue the Greencross acquisition. TPG Capital bought the vet care business back in 2019 for about $675 million, and reports put the mooted price this time around near $4 billion, a hefty sum against Coles' $30 billion market cap that would likely have required additional debt or a capital raising. The takeover news emerged on 1 July, which drove a negative reaction for both Woolworths and Coles.

Coles has underperformed Woolworths by a sizeable margin in the past month. You'd expect today's news to drive some upward pressure on Coles, and potentially close this underperformance.

Cole (red) vs. Woolworths (blue) in the past month (Source: TradingView)

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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)

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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)

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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)

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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)

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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)

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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)

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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