ASX 200 Live Today - Wednesday, 1st July

Welcome to our live ASX coverage for Wednesday, July 1. 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.

UBS cuts Autosports target as BEV order surge delays deliveries into FY27

[9:24 am] UBS has retained a Buy on Autosports Group but trimmed its price target after a softer FY26 guidance update, viewing the miss as largely timing-related from a sharp shift to battery electric vehicles.

• FY26 Adj. PBT guidance of $51-54m vs pcp $47.1m, with the $52.5m midpoint about 31% below UBS estimates on a like-for-like basis

• BEV demand jumped from about 15% of customer orders before March to over 40% in April, outpacing inventory and pushing a portion of 4Q26 deliveries into FY27, with the unwind expected to start towards end-1Q27

• 2H26 order write rose 22% year-on-year to end-May, on track for a record FY26, with costs for the order bank incurred in 2H26 but revenue landing in FY27

• UBS cut its price target to $2.90 from $3.35, implying a 1-year forward P/E of 13.3x, after lifting its WACC to 14.1% from 13.3% on earnings uncertainty

• The broker flagged ASG as undemanding on 7.7x 1-year forward P/E with an 11% FY27-30 EPS CAGR, and noted a recent Jaguar Land Rover stop-sale likely also hit 4Q26

• UBS sees the customer base as relatively resilient to rate rises, with 23% of FY27 PBT from EV greenfields (Zeekr Geely, Polestar) and further upside if ASG stays acquisitive

Despite the sharp consensus miss, Autosports shared managed to trade 4.1% higher on Tuesday.

Company page: Autosports Group (ASG)

Monadelphous wins more than $200m in resources and energy contracts

[9:19 am] Monadelphous has secured a suite of new construction and maintenance contracts across the resources and energy sectors, including multiple awards with Fortescue and Santos.

• Two Fortescue contracts: installation of wind turbine generators for the Nullagine Wind Project, plus a three-year maintenance contract across its Pilbara operations

• A three-year Santos contract (with two one-year extension options) for multidisciplinary services at its Queensland upstream field development and production operations

• A Santos contract to build temporary camp facilities for the APF Tie-In Project in Papua New Guinea's Southern Highlands, due for completion by end-2026

• A three-year contract to continue operation and maintenance services at Synergy's Muja Power Station in Collie, Western Australia

Company page: Monadelphous (MND)

South32 approves Sierra Gorda fourth grinding line, lifting copper output about 30%

[9:14 am] South32's Sierra Gorda joint venture has given final investment approval to a brownfield expansion expected to deliver attractive returns and lower unit costs.

• The project lifts processing capacity from about 48Mtpa to about 60Mtpa (100% basis) via a fourth grinding line plus expanded crushing and flotation, with first production in mid-FY30 and full rates in FY31

• Annual average payable production rises to about 195kt copper, 6kt molybdenum, 58koz gold and 1,700koz silver, or about 250kt copper equivalent (100% basis), a roughly 30% increase on current levels

• The expansion is expected to cut average operating unit costs by about 10%

• Growth capex of about US$725m (100% basis) over FY27 to FY30 implies a capital intensity of about US$21k/t CuEq, aided by existing water and power infrastructure

• The feasibility study points to an IRR of about 20% at a long-term copper price of US$5/lb, rising to about 23% at US$6/lb, funded from operating cash flow and JV debt

Company page: South32 (S32)

South32 to sell aluminium value chain to Alcoa for up to US$5.6bn as Daley takes over as CEO

[9:12 am] South32 has agreed to sell its aluminium assets to Alcoa for an implied enterprise value of up to US$5.6 billion, repositioning as an upstream base metals company, alongside a completed CEO handover to Matt Daley.

• The up to US$5.6bn enterprise value comprises US$3.1bn upfront cash, US$1.0bn in Alcoa shares (about 17.0m shares, roughly 6% of Alcoa), about US$750m in assumed net debt and lease liabilities, and up to US$750m in price-linked contingent consideration to 2030, with Alcoa also assuming about US$1.2bn in rehabilitation provisions

• Alcoa acquires Worsley Alumina (86%), Hillside Aluminium (100%), the MRN bauxite mine (33%) and South32's Brazil alumina (36%) and aluminium (40%) interests, with Mozal excluded and divestment under consideration

• Implied multiples are about 6.8x through-the-cycle EBITDA and about 12.7x average free cash flow, with directors unanimously recommending the deal absent a superior proposal

• An initial about US$500m will be returned via an in-specie fully franked special dividend of half the Alcoa equity consideration, with further returns to be considered post-completion

• Matt Daley has commenced as CEO and MD, with Graham Kerr stepping down to a strategic advisory role, while completion is expected in H2 FY27 subject to shareholder, FIRB, ACCC and other regulatory approvals, with a 5.0% per annum ticking fee on the cash consideration from shareholder approval to completion

Company page: South32 (S32)

Experience Co expands with Adelaide acquisition and $4m grant for new reef vessel

[9:04 am] Experience Co has unveiled two growth initiatives across its Treetops Adventure and Reef Unlimited units, marking its first move into South Australia.

• Acquired West Beach Adventure in Adelaide for $1.25m, the first Treetops Adventure site in South Australia, on pro-forma EBITDA of about $450,000 (implying an acquisition multiple of roughly 2.8x)

• The park sits within the 135-hectare West Beach Parks precinct and draws over 20,000 visitors annually

• Reef Magic Cruises secured a $4m Queensland Government Tourism Icons Investment Fund grant towards a new vessel, Reef Magic IV, for launch in December 2027

• The 385-passenger vessel lifts capacity about 25% and adds a 28-seat premium class, servicing the Remoora pontoon off Moore Reef from Cairns

• Total vessel cost is about $10.6m, funded by debt, the grant and disposal of the existing vessel, leaving an estimated net project cost to EXP of about $4.7m

Company page: Experience Co (EXP)

July seasonality flagged as a tailwind for US equities

[9:03 am] JPMorgan has highlighted July as a historically strong month for US stocks, with supportive inflow dynamics adding to the case.

• The S&P 500 has averaged a 3.37% return in July over the past ten years with a 100% hit rate, making it the index's second-best month

• July has been the best month for the Nasdaq 100 over the same period, averaging a 4.35% return with a 90% hit rate

US job openings hold near six-month high but consumer confidence misses

[9:01 am] May labour market data showed resilient job openings while June consumer confidence came in soft, even as cooler oil prices eased inflation fears.

• May JOLTS job openings rose to 7.594m vs 7.300m consensus and April's 7.585m, the highest since November 2024, with the openings rate unchanged at 4.6%

• The hiring rate (3.3%), quit rate (1.9%) and total separations rate (3.2%) were all unchanged, while layoffs and discharges ticked up to 1.1% from 1.0%

• June consumer confidence fell to 91.2 vs 94.7 consensus and May's downwardly revised 90.6 (from 93.1)

Nike falls after hours as cautious outlook overshadows revenue beat

[8:59 am] Nike slipped in late trading after executives warned of careful consumer spending and flagged sequential deceleration next quarter, offsetting a top- and bottom-line beat.

• Shares fell 2% in extended trading after paring a steeper decline, with the stock already down 36% this year through Tuesday's close

• Fiscal Q4: revenue declined year-on-year but topped consensus, while EPS also beat, helped by expected tariff-related refunds

• Management guided to "sequential deceleration" next quarter on wholesale shipment timing in North America, with outgoing CFO Matt Friend saying it does not expect the environment to improve meaningfully over the next six months

• Greater China remained a drag, with results in line but weak, prompting a "comprehensive reset" and a more local approach to product creation as consumers shift to domestic brands

• Converse weakness persisted, while CFO David Denton (ex-Pfizer) takes over in August and Nike will host an investor event on 16-17 November

Source: Bloomberg

Morgan Stanley cuts oil forecasts again, warns market is back to surplus

[8:55 am] Morgan Stanley has lowered its crude forecasts for the second time in about two weeks as Hormuz flows return faster than expected against a backdrop of strong US supply and weak Chinese demand.

• Morgan Stanley sees Dated Brent averaging US$75 a barrel in Q3 and Q4, down US$15 and US$5 respectively, with all four quarters of 2027 also cut and Dated seen at US$70 by end-2027

• The bank cited "twin solvers" of high US exports and low Chinese imports, arguing the market has come full circle back to surplus as attention turns to 2027

Source: Bloomberg

Hormuz traffic recovers as Iran presses for control, but reopening tips oil toward a glut

[8:53 am] US envoys are in Doha for fresh Iran talks as shipping returns to the Strait of Hormuz, though Iran's push to control the waterway and a wave of returning Gulf supply are reshaping the oil market.

• US envoys Steve Witkoff and Jared Kushner met Qatar's PM in Doha, but Qatar confirmed there are no high-level US-Iran meetings, with technical talks continuing indirectly and Iran's delegation set to meet Qatari officials separately on Wednesday

• Iran reiterated it wants to manage Hormuz traffic alongside Oman and may proceed alone if Oman declines, raising the prospect of shipping fees that the US, Europe and Gulf Arab states strongly oppose

• The JMIC raised the maritime threat level to "substantial" on mine risk and clearance operations, even as around 24 to 40 vessels transited the strait in recent days, still well below the pre-war average of about 110 a day

• Tanker confidence is building, with five VLCCs and one Suezmax (about 11m barrels of crude-lifting capacity) entering the Persian Gulf as Gulf producers race to restart idled output

• The reopening is flooding the market, with Asian refiners well supplied through August and now offering UAE grades as far as the US West Coast and Hawaii, potentially the first Middle East oil there since 2018

• Price differentials have flipped, with many Middle East grades now at discounts to Dubai while US inventories tighten, Cushing stockpiles at their lowest since 2014 and July US sales to Asia set to more than halve to 800,000-900,000 b/d

China stocks trail world by most since 2001

[8:48 am] Chinese equities have become a global laggard in 2026, with weak consumer demand, a lack of AI hardware names and renewed regulatory risk driving a sharp reversal from last year's rally.

• MSCI China Index has fallen 15%, the worst global performance after Indonesia, and last week hit its lowest level relative to MSCI's world index since the aftermath of the September 2001 attacks

• Tencent and Alibaba, the index's two largest weightings, have each plunged more than 29%, wiping out a combined US$337bn, against Goldman Sachs' start-of-year call for a 20% MSCI China rally

• Investor preference for chipmakers over hyperscalers disadvantages China given its lack of major hardware names, with regional benchmarks in South Korea, Taiwan and Japan up between 17% and 99%

• Earnings are deteriorating, with Tencent posting its slowest revenue growth in six quarters and Alibaba recording its first quarterly operating loss since 2021, while Macquarie sees Q2 GDP growth sliding to around 4.4%, below the official target

Source: Bloomberg

HSBC flags 'explosive' dollar rally as one of the biggest pain trades of 2H26

[8:47 am] HSBC sees a sharp dollar advance as a leading risk for the second half, driven by a more hawkish Fed and the potential for renewed geopolitical tension.

• HSBC expects the dollar to strengthen gradually through the first half of 2027, but warns the rally could turn "explosive" if the Fed signals more tightening than markets have priced in or if geopolitical tensions flare

• Bloomberg's dollar gauge hit a seven-month high earlier in June, while hedge funds have lifted bullish greenback bets to a 16-month high

• Tightening expectations elsewhere are fading, with Europe's outlook softening as oil retreats and the yen at a 40-year low

• HSBC flags a second pain trade in Treasuries, where sticky inflation and a hawkish Fed have flattened rather than steepened the curve, leaving crowded flattening bets exposed to a sharp unwind if the economy weakens enough to force easing

Source: Bloomberg

Yen hits four-decade low against the dollar, raising intervention risk

[8:46 am] The yen has slid to its weakest level since 1986, lifting exporter profits and stocks but swelling import costs and fuelling speculation that Japanese authorities will step in.

• The yen breached 161.95 vs the dollar overnight, passing its July 2024 low, before extending losses to 162.40 in Tokyo, with jawboning from officials having little immediate impact

• The slide persists despite the BOJ lifting its benchmark rate to 1% on June 16, the highest since 1995, as a wide yield gap versus the US and other economies keeps capital flowing out

• The government spent a record ¥11.73 trillion (US$72.4bn) on intervention from 28 April to 27 May, likely drawing on foreign securities including US Treasuries to fund the defence

• Weakness is a tailwind for carmakers, with Toyota estimating every ¥1 of depreciation adds ¥50bn to operating profit, pointing to a potential US$5.8bn windfall for Japan's automakers this year

• Swelling import costs, notably for dollar-priced oil and gas, are fuelling inflation and threatening the popularity of PM Sanae Takaichi's government

Source: Bloomberg

US equities post mixed June but strongest quarter since 2020

[8:44 am] US stocks were mixed in June even as quarterly returns delivered the strongest performance since 2020, with semiconductors and memory the standout drivers across both periods.

• For June, the Dow rose 2.52% and the Russell 2000 gained 3.60%, while the S&P 500 fell 1.06% and the Nasdaq dropped 2.81%, both retreating after fresh record closes early in the month

• The S&P 500 equal-weight index (RSP) outpaced the cap-weighted index by around 300bp in June, reflecting a broadening-out move beyond mega-caps

• All of the Mag 7 fell in June, led lower by Microsoft (down 17.2%), Amazon (down 11.9%) and Meta (down 10.9%), while semis (SOX up 11.1%) and memory (DRAM up 16.7%) were the standouts

• For Q2, the Nasdaq surged 21.41% and the Russell 2000 gained 21.15%, with the S&P 500 up 14.87% for its best quarter since Q2 2020 despite ending shy of record levels

• The SOX jumped 87.8% in Q2, its best quarter since the index's 1993 inception, with memory names Micron (up 241.7%) and SanDisk (up 257.9%) among the standouts

• Q2 strength was broad, with the equal-weight S&P up 10.9%, though energy, chemicals, utilities, staples retailers and food lagged

Good morning!

[8:27 am] ASX 200 futures are up 8 pts (+0.09%).

The overnight session in a nutshell:

• S&P 500 up 0.8%, Nasdaq up 1.5% and the Dow to a record close, capping Wall Street's best quarter since 2020

• Chip stocks led again, with the SOX closing out the quarter up 87.8%

• Yen slid to a 40-year low near 162 per dollar, reviving Japan intervention talk, while strong JOLTS data hardened Fed rate-hike bets

• Massive day for South32 after announcing plans to sell its aluminium value chain assets to Alcoa for up to US$5.6bn, as well as completing its CEO transition and approving upgrades for Sierra Gorda