Evening Wrap: ASX 200 dips as WES and WOW go ex-dividend, coal stocks on fire as coal prices surge

The ASX 200 fell as the market's daily rotation delivered a familiar result: energy, gold, and materials surged while consumer stocks, technology, and the banks gave ground. Why? Benchmark US 10-year Treasury yields rose for a third consecutive session to their highest level since January.

Be sure to click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all the key economic data in tonight's Evening Wrap. Also, I have detailed technical analysis on the Nasdaq Composite and the S&P/ASX 200 in today's ChartWatch.

Let’s dive in!

The S&P/ASX 200 (XJO) finished 9.3 points lower at 9,066.7, 0.5% from its session low and just 0.1% from its high. Despite the headline loss, in the broader-based S&P/ASX 300 (XKO) advancers just managed to sneak past decliners by 144 to 136.

Readers will no doubt expect the well-worn pattern to continue: Energy, gold and materials up… Financials and probably Consumer stocks down.

It occurs like clockwork on a daily basis, and today it was the former group’s time to shine. Which meant money rotated out of the latter group to pay for it.

Why? Brent crude prices edged uncomfortably higher as tensions in the Middle East remained elevated — sending consumer stocks and interest rate sensitives lower. Key benchmark US bond yields rose for the third straight session, pushing the yield on the 10-year T-bond to 4.78% — its highest level since January last year.

If you dig it up or pump it out — apparently you're immune! 💉

US 10-Year T-Bond Yield chart

Energy (XEJ) (+1.2%) was the session's standout as coking coal continued its remarkable month-long surge — SGX Australian Premium Coking Coal futures gained 4.4% to US$282/t, a level that is now more than 30% above where it was just four weeks ago. That kind of move is likely to contribute directly to an earnings upgrade cycle across coking coal names. Coronado Global Resources (CRN) (+8.9%) and Stanmore Resources (SMR) (+6.6%) were the sector's biggest movers, with New Hope Corp. (NHC) (+1.3%) and Whitehaven Coal (WHC) (+1.2%) also firmer as globalCoal Newcastle Coal futures added 1.4% to US$144.90/t.

ICE Brent crude futures gained 0.7% to US$91.13/bbl as US strikes on Iranian military targets continued, with oil and gas producers responding — Beach Energy (BPT) (+3.5%), Karoon Energy (KAR) (+2.6%), and Santos (STO) (+1.7%) were all firmly higher. Refiners Viva Energy (VEA) (+2.7%), Ampol (ALD) (+1.7%) were also well bid.

SGX Australian Premium Coking Coal futures chart

Interestingly, the higher risk-free rate didn’t hurt the gold sector (nor did higher crude prices), and even more interestingly, the gold price was flat at US$4,483/oz,— so no positive commodity lead there… The most credible explanation is that FY26 results — uniformly strong given the elevated gold price environment through most of the year — are still being absorbed. Resolute Mining (RSG) (+5.8%), Black Cat Syndicate (BC8) (+5.1%), Catalyst Metals (CYL) (+3.7%), and Unico Silver (USL) (+3.5%) all gained.

Base metals were also flat / mixed overnight, but the price of benchmark copper futures traded modestly firmer in Asia today, and the benchmark iron ore futures contract continued to trade just shy of the psychological US$100 mark and at 6-week highs. South32 (S32) (+1.6%), Rio Tinto (RIO) (+1.5%), Capstone Copper (CSC) (+1.1%), and BHP (BHP) (+0.9%) all advanced in a session where sentiment rather than commodity price leads appears to have done most of the work.

S&P-ASX 200 Materials Sector Index chart

Health Care (XHJ) (+0.4%) was the only defensive sector to advance — a notable distinction from the usual pattern where defensives lag on risk-on days. Ramsay Health Care (RHC) (+1.9%), Ansell (ANN) (+1.5%), ResMed (RMD) (+0.5%), and CSL (CSL) (+0.4%) were all modestly firmer.

Consumer Discretionary (XDJ) (-1.8%) was Tuesday's worst sector, but much of this would have been Wesfarmers (WES) (-3.0%) going ex-dividend $1.20 fully franked. Still, the sector faces genuine pressure from the rate-hike repricing that threatens household spending capacity. Harvey Norman (HVN) (-2.6%), Lovisa (LOV) (-2.4%), and Super Retail Group (SUL) (-2.2%) all fell.

Consumer Staples (XSJ) (-1.4%) fell for a similar reason to Discretionary — Woolworths (WOW) (-2.4%) went ex-dividend 52 cents fully franked — and on the same higher-rate/cost-of-living logic that pressures discretionary spending. Coles (COL) (-1.5%) also dipped.

Information Technology (XIJ) (-0.7%) was modestly negative as higher benchmark yields raised the discount rate on long-duration tech earnings — the same mechanism hit Communication Services. NextDC (NXT) (-4.2%), Weebit Nano (WBT) (-3.5%), WiseTech Global (WTC) (-1.7%), and Technology One (TNE) (-1.2%) were all lower in tech, while REA Group (REA) (-4.2%), CAR Group (CAR) (-4.2%), and Seek (SEK) (-2.5%) were all sharply lower in Communication Services (XTJ) (-1.7%).

Financials (XFJ) (-0.4%) reversed Monday's recovery as the higher-yield environment reasserted twin pressure on the sector — rising rates hurts consumers and credit quality, plus it makes bank dividends seem not-so-juicy! GQG Partners (GQG) (-3.8%), Generation Development Group (GDG) (-3.8%), and HUB24 (HUB) (-2.7%) led the falls, with Westpac (WBC) (-0.6%), Commonwealth Bank (CBA) (-0.5%), and National Australia Bank (NAB) (-0.3%) all modestly softer.

In other commodities moves, lithium stocks extended their run to a third consecutive positive session as the Australian spodumene price held near recent highs — GFEX lithium carbonate futures in China actually fell 2.0% to CNY 157,860/t after the ASX closed, a move that was likely not reflected in today's equity prices given it occurred after the ASX closed. Wildcat Resources (WC8) (+6.6%), Liontown Resources (LTR) (+6.5%), Elevra Lithium (ELV) (+4.2%), and Pilbara Minerals (PLS) (+1.5%) all advanced.

GFEX Lithium carbonate futures chart

Analysis

From every newswire bulletin you read this morning covering US stocks:

(Blah, blah, blah)... escalating Middle East tensions and rising oil prices weighed on investor sentiment on Wall Street, as fears grew that the Fed would deliver an interest-rate hike before the end of the year...(blah, blah, blah).

I hope you can see the futility in even reading this stuff! It's mass produced (probably now AI produced) generic waffle. It's noise. It's a pile of plausible excuses for why S was greater than D which caused P to ⬇️.

But I guess the finance journo's can't exactly write just that and be done with it? Right? Who would read the pixels they get paid to put on our various screens! 😉

That's where ChartWatch is a bit different. Hey Carl, why was the Comp down on Monday night?

"Oh, that was because supply was greater than demand. Yep, definitely — that's it..."

That's all you need to know. But one session / candle does not a complete picture of the prevailing demand and supply environment make!

That's why we look at many candles, but also price action, short and long term trends, volume, and volatility (OTR).

Our job is to make a case over X timeframe that one of these scenarios is MOST LIKELY true:

• D > S = P⬆️

• D = S = P➡️

• S > D = P⬇️

As you know, I prefer "short term" and "long term" — and for each timeframe to agree with each other. This is our Analysis.

Next, we Accept that MOTN the price will continue to move in the direction dictated by its current D vs S state (logically it will, just like the body in motion in Newton's First Law).

Finally, we Act accordingly by allocating our risk prudently: risking more if the Analysis suggests strong demand side control, or less if it doesn't.

And at no point do we ask: Is such and such expensive? What's Trump / Warsh / Bessent about to do next? What about the oil price? What about 10, 20, 50, 100 years ago when valuations were this high? What about that great tip the taxi driver gave me on the way to that meeting today? 🤔

For each of those pointless plausible excuses would be ignoring the most important and basic tenet of economics: D vs S = P.

It's the most important / basic tenet now, it was way back when cave men were exchanging shiny stones for a goat, and it will be until AI eventually enslaves the human race! 🤖

Which brings me to Monday's candle on the Comp (I probably should comment on that at some point!) But then again, I expect you've already glanced at the chart above and ascertained in about one second:

• ST Trend: D = S = P➡️ ⚖️

• LT Trend: D > S = P⬆️ ✅

View

Which means the best course of Action is to be invested (LT trend ✅) — but to also keep a bit of powder dry (ST trend ⚖️). The only thing you have to decide is how much powder to keep dry.

Me? I'm at 50-50 = 1/2RP. (RP = Risk Position — it reflects my personal allowable capital allocation limit for my investments in US stocks. So 1/2RP is 50%, 2/3RP is 67% and FRP is 100%).

Key Levels

26863 is the key point of supply vs 25910 and then the long term trend ribbon (presently 24131-25027) is the key point / zone of demand.

Analysis

That's two lower peaks now: 9221 and 9123 (note, 9123 is designated as a peak today because today's lower high and lower low candle reverses the prior higher high and higher lows regime).

Lower peaks are NOT representative of:

• FOMO 👍

• HOFU 👍

• BTD 👍

• Supply removal 👍

All good bull market stuff. They are, however, representative of:

• NUTE ⚠️

• FOHO ⚠️

• STR ⚠️

• Supply reinforcement ⚠️

All nasty bear market stuff. But! The short term uptrend ribbon continues to hold (just!) and 9019 appears somehow rock solid (probably to all of our surprise!).

When considered in conjunction with the prevailing long term uptrend, the OTP must be a "not all-in but enough skin in the game to make it count if the short term trend realigns with the long term trend" proposition.

I can see a decent downward pointing shadow on today's candle, confirming for the third time 9019's credentials as a point of excess demand. As long as it holds, I hold... 🤷

View

I am 2/3RP on Australian shares (67% of my capital allocated to ASX shares can be invested, while 33% should be retained as cash).

Key Levels

9221-9297 is the key zone of supply to contend with, while 9019 is the go-no-go point for the current short term uptrend.

(Glossary of acronyms! Old Tin Pot (OTP): S&P/ASX 200 | MOTN: More Often Than Not | FOMO: Fear Of Missing Out | HOFU: Holding On For Upside | BTD: Buy The Dip | NUTE: No Urgency To Enter | FOHO: Fear Of Holding On | STR: Sell The Rally | RP: Risk Position | FFS: Fund Flow Shenanigans!)

***CHARTWATCH LIVE WEBINARS — NEW VIDEO DROPPED!!! 📺🍿***

Copper is rising, ASX copper stocks are surging – how high can BHP, RIO and SFR go? Plus: Lithium 🔋

TODAY

• AUS July Building Approvals

  • Result: -3.6% m/m vs -4.8% m/m forecast and +7.2% in June (down, better than forecast)

• AUS Current Account

  • Result: -27.2 billion vs -29.7 billion forecast and -27.1 billion in June (about the same, better than forecast)

LATER THIS WEEK

WEDNESDAY

• 00:00 USA August ISM Manufacturing PMI (55.2 forecast vs 55.6 in July)

• 00:00 USA August JOLTS Job Openings (7.33 million forecast vs 7.36 million in July)

• 11:30 AUS June Quarter Gross Domestic Product (GDP) (+0.3% q/q vs +0.3% q/q in March)

THURSDAY

• No major economic data releases scheduled for this day...

FRIDAY

• 00:00 USA August ISM Services PMI (54.1 forecast vs 54.1 in July)

• 22:30 USA August Non-Farm Payroll

  • Non-Farm Employment Change: +58,000 forecast vs -23,000 in July

  • Unemployment Rate: 4.1% forecast vs 4.1% in July

  • Average Hourly Earnings: +0.3% m/m forecast vs +0.1% m/m in July