Evening Wrap: ASX 200 claws back from inflation disappointment to close flat, financials and supermarkets lead way

Sorry for the late arrival of today's Evening Wrap, it was unfortunately delayed due to the old "unforeseen technical issues".

Given its tardiness, it's best we skip to the good bits so...

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 0.2 points higher at 8,071.4, % from its session low smack-bang on its session high. Despite the slender gain on the benchmark, in the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a substantial 89 to 180.

Defensives like Consumer Staples (XSJ) (+1.4%) and Financials (XFJ) (+0.77%) led the way, but as is the case for the last four weeks now, most sector moves have been earnings related. In these two, Woolworths Group (WOW) (+3.3%) and Zip Co. (ZIP) (+13.9%) were respective standouts.

The best of the XSJ and XFJ today

Doing it tough today, Energy (XEJ) (+-%), Communication Services (XTJ) (+-%), and Resources (XJR) (+-%). Scratch Telcos – that was pretty much all Telstra Group (TLS) (-2.5%) going ex-dividend.

As for Energy and Resources? Crude oil was down overnight, but base metals and iron ore are generally higher over the last 24-hours – though this didn't really help associated stocks today. Uranium and Lithium feature heavily in the table below, the prices of both of those commodities are lower. That makes sense.

One thing that is for sure – both sectors have been serial underperformers for months now, and perhaps that is excuse enough.

Energy and Resources stocks did it tough today

ChartWatch

NASDAQ Composite Index

Steady as she goes...

The last time we covered COMP was in ChartWatch in the Evening Wrap on 20 August.

In that update, I said: “I wouldn’t be fussed by a short, sharp pullback here – particularly one punctuated by downward pointing shadows. It would be constructive to firming the evidence of demand-side control and give us valuable information about the supply-side’s remaining capacity to wage war.”

Check on the (so far) short (and not all that) sharp pullback. If I squint, last night’s candle checks the box on the downward pointing shadow – it’s a small but decent demand-side candle for what it’s worth.

In short, the supply side is challenging – that’s not a bad thing. The demand-side appears to be holding up – that’s a good thing.

I’d like to see the COMP to continue to close above the short term uptrend ribbon, that kicks in around 17470-17500.

I’d also like to see continued demand-side candles, so they’re the ones with white bodies and or downward pointing shadows.

I’d also like to see a close above key points of supply at 18018 (22 August peak) and 18129.

If we get all these things, then the US bull market is very much alive and well, and we would have every reason to expect at least a test of the all time high at 18671 in the near future.

The alternative, that is supply-side candles (those with black bodies and upward pointing shadows), lower peaks, and closing below the short term uptrend ribbon, likely set the COMP up for a retest of the long term uptrend ribbon – which kicks in around 16680.

Russell 2000 Index (RUT)

Trends remain intact

The last time we covered RUT was also in ChartWatch in the Evening Wrap on 20 August.

In that update, we noted it was tracking “a little more subdued” than the COMP, but there were still plenty of positive signals the demand-side had regained control of the price.

I’m going to say in this update that the super strong demand-side showing on 23 August (it’s the big white candle extending from the dynamic demand of the short term uptrend ribbon) puts the RUT in a better place than the COMP in terms of manifesting demand-side control.

The pullback since then has been mild – again the demand-side looks firm here – and the point of supply at 2176 has been nicely bested.

It’s critical now that this little pullback remains just that – little – and we see a quick and resounding resumption of upside momentum in the form of large demand-side candles. That should seal the deal for another test of the recent high here – 2300 on the knocker.

Again, pay attention to anything that appears to manifest supply-side control – black candles, upward pointing shadows, lower peaks – that kind of stuff!

Economy

Today

• AUS Consumer Price Index (CPI) monthly series July

  • 3.5% p.a. vs +3.4% p.a. forecast and +3.8% p.a. June

  • So, check for slowing, but cross for higher than forecast.

  • Housing (+4% p.a.), food and non-alcoholic beverages (+3.8% p.a.), alcohol and tobacco (+7.2% p.a.) and transport (+3.4% p.a.) were the main culprits

  • Solidifies RBA on hold (looking closely at both sides of the equation) mantra

Later this week

Thursday

• 22:30 USA Prelim GDP June Qtr y/y (+2.8% p.a. forecast vs +2.8% p.a. previous)

Friday

• 00:00 USA Pending Home Sales m/m (+0.2% forecast vs +4.8% previous)

• 09:30 JPN Tokyo Core CPI y/y (+2.2% p.a. forecast vs +2.2% p.a. previous)

• 11:30 AUS Retail Sales m/m (+0.3% forecast vs +0.5% previous)

• 19:00 EUR CPI Flash Estimate y/y (+2.2% p.a. forecast vs +2.6% p.a. previous)

• 22:30 USA Core PCE Price Index m/m (+0.2% m/m forecast vs +0.2% m/m previous)

Latest News

Interesting Movers

Trading higher

• +13.9% Zip Co. (ZIP) - Brokers responded positively to yesterday's FY24 Investor Presentation, including 1 upgrade to buy (Jefferies), and several price target increases (see Broker Notes section below), rise is consistent with prevailing short and long term uptrends 🔎📈

• +10.2% Syrah Resources (SYR) - No news

• +9.8% Droneshield (DRO) - Brokers responded positively to yesterday's 2024 Half Year Results - Investor Presentation, (see Broker Notes section below)

• +8.8% Iperionx (IPX) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈

• +8.3% Duratec (DUR) - Annual Report to shareholders and FY24 Results Presentation

Trading lower

• -15.0% Tabcorp (TAH) - Appendix 4E and Annual Report and Full Year Results - Investor Presentation, it has been a regular in ChartWatch Scans Feature Downtrends lists...fall is consistent with prevailing short and long term uptrends 🔎📈

• -10.9% McMillan Shakespeare (MMS) - Continued negative response to yesterday's FY24 Results Investor Presentation, downgraded to hold from buy at Canaccord Genuity, price target cut by several other brokers

• -7.1% EML Payments (EML) - 2024 Appendix 4E and Annual Report and FY24 Results Investor Presentation, fall is consistent with prevailing short and long term uptrends 🔎📈

• -6.2% Johns Lyng Group (JLG) - Continued negative response to yesterday's FY2024 Results Presentation, a regular in ChartWatch Scans Feature Downtrends lists...fall is consistent with prevailing short and long term uptrends 🔎📈

• -6.0% Lotus Resources (LOT) - No news, tough day for ASX uranium stocks, see this article for analysis. Fall is consistent with prevailing short and long term uptrends 🔎📈

• -5.9% Telix Pharmaceuticals (TLX) - Telix Submits NDA for TLX101-CDx Brain Cancer Imaging Agent

• -5.9% Paladin Energy (PDN) - Ditto uranium

Broker Notes

• 29METALS (29M)

  • Retained at neutral at Citi; Price Target: $0.45

  • Retained at neutral at Macquarie; Price Target: $0.37

  • Retained at overweight at Morgan Stanley; Price Target: $0.55

• Ainsworth Game Technology (AGI)

  • Retained at neutral at Macquarie; Price Target: $0.90 from $1.10

• Austin Engineering (ANG)

  • Retained at buy at Shaw and Partners; Price Target: $0.70 from $0.78

• APA Group (APA)

  • Retained at neutral at UBS; Price Target: $8.70

• Beforepay Group (B4P)

  • Retained at buy at Shaw and Partners; Price Target: $1.75 from $1.15

• Bapcor (BAP)

  • Retained at neutral at Citi; Price Target: $5.04 from $4.70

• Baby Bunting Group (BBN)

  • Retained at neutral at Citi; Price Target: $1.80 from $1.79

• BHP Group (BHP)

  • Retained at buy at Citi; Price Target: $46.00

  • Retained at buy at Goldman Sachs; Price Target: $48.80 from $48.40

  • Retained at neutral at Macquarie; Price Target: $43.00 from $42.00

  • Retained at equal-weight at Morgan Stanley; Price Target: $46.30

  • Retained at add at Morgans; Price Target: $48.30 from $49.20

  • Retained at accumulate at Ord Minnett; Price Target: $45.00

  • Retained at sector perform at RBC Capital Markets; Price Target: $45.00

  • Retained at neutral at UBS; Price Target: $42.00 from $43.00

• Chrysos Corporation (C79)

  • Retained at hold at Bell Potter; Price Target: $5.70

  • Retained at accumulate at Ord Minnett; Price Target: $6.09 from $5.99

• City Chic Collective (CCX)

  • Retained at neutral at Citi; Price Target: $0.16

• Charter Hall Group (CHC)

  • Retained at accumulate at Ord Minnett; Price Target: $14.50

• Cooper Energy (COE)

  • Retained at hold at Bell Potter; Price Target: $0.23 from $0.22

  • Retained at outperform at Macquarie; Price Target: $0.30

  • Retained at add at Morgans; Price Target: $0.31 from $0.30

• Coles Group (COL)

  • Retained at buy at Citi; Price Target: $21.00 from $19.00

  • Retained at neutral at Goldman Sachs; Price Target: $18.00

  • Retained at hold at Jefferies; Price Target: $18.50 from $17.00

  • Retained at outperform at Macquarie; Price Target: $20.20 from $19.40

  • Retained at equal-weight at Morgan Stanley; Price Target: $18.80 from $18.00

  • Downgraded to hold from add at Morgans; Price Target: $19.20 from $18.95

  • Retained at buy at UBS; Price Target: $21.00 from $19.50

• Clean Seas Seafood (CSS)

  • Retained at hold at Bell Potter; Price Target: $0.19 from $0.22

• Calix (CXL)

  • Retained at buy at Bell Potter; Price Target: $1.90 from $2.40

• Cyclopharm (CYC)

  • Retained at buy at Bell Potter; Price Target: $2.70 from $3.10

• Droneshield (DRO)

  • Retained at buy at Bell Potter; Price Target: $1.35 from $1.25

  • Retained at buy at Shaw and Partners; Price Target: $1.30

• EBR Systems (EBR)

  • Retained at buy at Bell Potter; Price Target: $1.96 from $1.43

• Electro Optic Systems (EOS)

  • Retained at buy at Bell Potter; Price Target: $2.20

  • Retained at buy at Ord Minnett; Price Target: $2.80

• Earlypay (EPY)

  • Retained at add at Morgans; Price Target: $0.29 from $0.28

• Flight Centre Travel Group (FLT)

  • Retained at buy at Citi; Price Target: $24.15

• Fortescue (FMG)

  • Retained at neutral at Citi; Price Target: $19.40

  • Retained at sell at UBS; Price Target: $17.70

• Guzman y Gomez (GYG)

  • Retained at overweight at Morgan Stanley; Price Target: $38.50 from $31.80

  • Downgraded to hold from add at Morgans; Price Target: $38.50 from $31.80

  • Retained at neutral at UBS; Price Target: $31.00

  • Retained at overweight at Wilsons; Price Target: $41.14 from $31.98

• Helloworld Travel (HLO)

  • Downgraded to hold from add at Morgans; Price Target: $2.30 from $3.33

  • Retained at buy at Ord Minnett; Price Target: $2.65 from $3.10

  • Retained at buy at Shaw and Partners; Price Target: $3.50 from $3.80

• Integral Diagnostics (IDX)

  • Upgraded to positive from neutral at E&P; Price Target: $3.10 from $2.40

  • Upgraded to overweight from neutral at Jarden; Price Target: $2.83 from $2.59

  • Retained at outperform at Macquarie; Price Target: $2.90 from $2.85

  • Retained at buy at Ord Minnett; Price Target: $3.00 from $2.70

  • Upgraded to overweight from marketperform at Wilsons; Price Target: $2.88 from $2.12

• IDP Education (IEL)

  • Retained at buy at Goldman Sachs; Price Target: $21.75

  • Retained at overweight at Morgan Stanley; Price Target: $19.20

  • Retained at neutral at UBS; Price Target: $16.10

• Johns Lyng Group (JLG)

  • Retained at hold at Bell Potter; Price Target: $4.20 from $6.30

  • Downgraded to neutral from buy at Citi; Price Target: $4.55 from $7.85

  • Downgraded to neutral from positive at E&P; Price Target: $4.44 from $6.27

  • Upgraded to buy from hold at Jefferies; Price Target: $5.50 from $6.50

  • Retained at overweight at JP Morgan; Price Target: $5.50 from $7.60

  • Retained at outperform at Macquarie; Price Target: $5.10 from $7.40

  • Retained at overweight at Morgan Stanley; Price Target: $7.20

  • Retained at add at Morgans; Price Target: $5.10 from $7.30

• Karoon Energy (KAR)

  • Retained at buy at Citi; Price Target: $2.35

• Lovisa (LOV)

  • Retained at hold at Canaccord Genuity; Price Target: $31.20 from $29.00

  • Retained at neutral at Citi; Price Target: $32.16 from $31.65

  • Retained at neutral at E&P; Price Target: $26.97 from $27.74

  • Downgraded to neutral from buy at Jarden; Price Target: $30.59 from $33.08

  • Retained at outperform at Macquarie; Price Target: $35.10 from $33.70

  • Retained at equal-weight at Morgan Stanley; Price Target: $33.25 from $30.25

  • Retained at add at Morgans; Price Target: $36.50 from $37.00

  • Downgraded to underperform from sector perform at RBC Capital Markets; Price Target: $25.00 from $28.00

  • Retained at neutral at UBS; Price Target: $33.00 from $32.50

• Lynas Rare Earths (LYC)

  • Retained at sell at Citi; Price Target: $5.20

• McMillan Shakespeare (MMS)

  • Downgraded to hold from buy at Canaccord Genuity; Price Target: $18.50 from $21.80

  • Retained at buy at Citi; Price Target: $20.05 from $22.50

  • Retained at outperform at Macquarie; Price Target: $20.78 from $22.63

  • Retained at overweight at Morgan Stanley; Price Target: $21.50

  • Retained at accumulate at Ord Minnett; Price Target: $19.00 from $21.10

• Mitchell Services (MSV)

  • Retained at buy at Morgans; Price Target: $0.55 from $0.56

• Nanosonics (NAN)

  • Retained at hold at Bell Potter; Price Target: $4.45

  • Retained at add at Morgans; Price Target: $3.75

• Nine Entertainment (NEC)

  • Retained at buy at UBS; Price Target: $1.95

• Neuren Pharmaceuticals (NEU)

  • Retained at buy at Bell Potter; Price Target: $25.00

• Navigator Global Investments (NGI)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $2.02 from $2.22

  • Retained at buy at Ord Minnett; Price Target: $2.15 from $2.20

• NIB (NHF)

  • Retained at add at Morgans; Price Target: $7.31 from $7.92

  • Retained at buy at Ord Minnett; Price Target: $7.25 from $8.65

• Nickel Industries (NIC)

  • Retained at buy at UBS; Price Target: $1.05 from $1.10

• Noumi (NOU)

  • Retained at buy at Bell Potter; Price Target: $0.20 from $0.18

• National Storage Reit (NSR)

  • Upgraded to outperform from hold at CLSA; Price Target: $2.64 from $2.25

• Nextdc (NXT)

  • Retained at buy at Citi; Price Target: $19.25

  • Retained at buy at Goldman Sachs; Price Target: $19.00

• Propel Funeral Partners (PFP)

  • Retained at buy at Bell Potter; Price Target: $6.40 from $6.20

  • Retained at outperform at Macquarie; Price Target: $6.88 from $6.58

  • Retained at overweight at Morgan Stanley; Price Target: $6.40

• Peoplein (PPE)

  • Retained at buy at Ord Minnett; Price Target: $1.12 from $1.46

• Readytech (RDY)

  • Retained at buy at Goldman Sachs; Price Target: $4.25

  • Retained at outperform at Macquarie; Price Target: $3.80

  • Retained at buy at Shaw and Partners; Price Target: $4.80 from $4.90

• Ramsay Health Care (RHC)

  • Downgraded to hold from outperform at CLSA; Price Target: $49.50 from $50.80

  • Retained at neutral at Macquarie; Price Target: $50.10

• Regal Partners (RPL)

  • Retained at buy at Ord Minnett; Price Target: $4.30

• Scentre Group (SCG)

  • Retained at accumulate at Ord Minnett; Price Target: $3.43 from $3.44

• Siteminder (SDR)

  • Retained at neutral at Goldman Sachs; Price Target: $5.70

  • Retained at overweight at Morgan Stanley; Price Target: $6.80

  • Retained at buy at Ord Minnett; Price Target: $7.55

  • Retained at buy at UBS; Price Target: $6.20 from $6.65

• SG Fleet Group (SGF)

  • Retained at outperform at Macquarie; Price Target: $3.18 from $3.21

  • Retained at overweight at Morgan Stanley; Price Target: $3.60

• Smartgroup Corporation (SIQ)

  • Retained at buy at Citi; Price Target: $10.45

• Silk Logistics (SLH)

  • Retained at buy at Shaw and Partners; Price Target: $2.10

• Supply Network (SNL)

  • Retained at buy at Goldman Sachs; Price Target: $27.40

  • Retained at buy at Ord Minnett; Price Target: $30.50 from $26.60

• Santos (STO)

  • Retained at buy at UBS; Price Target: $8.80

• Tyro Payments (TYR)

  • Retained at buy at Shaw and Partners; Price Target: $1.60

• Vulcan Energy Resources (VUL)

  • Retained at neutral at Jarden; Price Target: $7.80 from $7.68

  • Downgraded to hold from add at Morgans; Price Target: $6.70 from $6.80

  • Retained at sector perform at RBC Capital Markets; Price Target: $7.50 from $7.75

  • Retained at neutral at UBS; Price Target: $7.00 from $7.20

• West African Resources (WAF)

  • Retained at outperform at Macquarie; Price Target: $1.90

• Woodside Energy Group (WDS)

  • Retained at neutral at Citi; Price Target: $25.00

  • Retained at neutral at Goldman Sachs; Price Target: $31.70 from $33.50

  • Retained at overweight at JP Morgan; Price Target: $31.00

  • Retained at outperform at Macquarie; Price Target: $33.00

  • Downgraded to equal-weight from overweight at Morgan Stanley; Price Target: $30.00 from $32.00

  • Retained at add at Morgans; Price Target: $33.00 from $35.00

  • Retained at hold at Ord Minnett; Price Target: $27.50 from $28.50

  • Retained at neutral at UBS; Price Target: $30.70 from $31.00

• Worley (WOR)

  • Retained at buy at Citi; Price Target: $18.00 from $19.00

  • Retained at buy at Goldman Sachs; Price Target: $17.75 from $17.50

  • Upgraded to buy from hold at Jefferies; Price Target: $16.20 from $16.80

  • Upgraded to overweight from neutral at JP Morgan; Price Target: $17.00 from $16.80

  • Retained at outperform at Macquarie; Price Target: $17.92 from $18.10

  • Retained at add at Morgans; Price Target: $17.40 from $18.00

  • Retained at buy at UBS; Price Target: $22.00

• Woolworths Group (WOW)

  • Retained at buy at Citi; Price Target: $39.00

  • Retained at neutral at UBS; Price Target: $34.50

• Wisetech Global (WTC)

  • Retained at hold at Ord Minnett; Price Target: $120.00 from $96.00

• Zip Co. (ZIP)

  • Retained at buy at Citi; Price Target: $1.90

  • Upgraded to buy from hold at Jefferies; Price Target: $2.50 from $1.95

  • Retained at buy at Ord Minnett; Price Target: $2.45 from $1.95

  • Retained at outperform at RBC Capital Markets; Price Target: $2.35 from $1.90

  • Retained at buy at UBS; Price Target: $2.45 from $1.90

  • Retained at buy at Unified Capital Partners; Price Target: $3.03 from $2.58

Scans