Evening Wrap: ASX 200 falls, Appen nosedives on revenue decline, investors await US CPI

A rather quiet session ahead of US inflation data, Appen shares dumped after guiding to a material decline in full-year revenues, JPMorgan's playbook for inflation day and a few Goldman Sachs notes on large caps.

Let's dive in.

ASX 200 Session Chart

ASX 200 finishes off worst levels (Source: Market Index)

Markets

Another relatively uneventful session. The ASX 200 was lower but off session lows of -0.40%. Sector performance was mixed. Banks led to the downside but mainly due to NAB (-4.0%) trading ex-dividend. Healthcare outperformed thanks to CSL (+1.1%), which was buoyed by solid results from Spain-based biotech rivals Grifols. Appen (-28.2%) experienced its largest volume day on record (18.9m volume) after posting -21.4% revenue growth for the four months to 30 April. Overall, markets are on hold ahead of the all-important US inflation print at 10:30 pm AEST.

Economy

No major economic announcements. 

Latest news

Market Insights: US Inflation

A few more interest takes for tonight's inflation print.

Implied volatility: The S&P implied move is currently 0.89%, which is tied for the lowest 1-day improved move heading into CPI since February 2022.

Source: Zerohedge

JPMorgan's playbook: JPMorgan have posted a 'Game Plan' for CPI day for the past few months. The first few were pretty good and accurate. But the latest few have been a little stretched for S&P 500 reaction.

Source: Bloomberg

Interesting news and movers

Trading higher

• +15.5% Meteoric Resources (MEI)

• +8.7% Weebit Nano (WBT)

• +6.1% Dicker Data (DDR) – Trading update

• +4.2% SRG Global (SRG) – Guidance

• +3.3% Lynas (LYC) – Continuation rally, up 14% in previous three

• +3.5% Blue Energy (BLU) – Sapphire Pilot gas flows

• Uranium sector move: Alligator Energy (+17.7%), Lotus (+16.2%), Bannerman (+12.6%), Deep Yellow (+12.5%), Paladin Energy (+8.4%) 

Trading lower

• -28.2% Appen (APX) – Trading update

Broker notes

Goldman Sachs notes:

Carsales (CAR): Neutral with $23.30 target price

• “We believe CAR has the most diversified, global growth exposure out of our classifieds coverage with a monetisation model that is somewhat counter cyclical.”

• “However, trading on a 12mf PER that is in-line with historical averages, at a lower discount to domestic classified peers.”

Commonwealth Bank (CBA): Sell with $84.97 target price

• “CBA’s 3Q23 update highlighted the franchise is no more immune to the macro pressures facing the sector.”

• “CBA’s skew to consumer banking leaves it more exposed to elevated mortgage competition.”

• “The stock is trading on a FY24E PER of 17x, a 43% premium to its peers (21% historic average)”

Worley (WOR): Neutral with $17.30 target price

• Management reiterated FY23e margins at its Investor Day 

• “While we acknowledge that WOR is thematically well positioned and reiterated targets point to operating leverage that has been relatively elusive, we note the stock has rallied 15% over the last 12mth vs the market up 1% and the Brent down 31%.”

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