Market Wraps

Evening Wrap: ASX 200 lower as earnings sends major blue chips in starkly different directions

Tue 13 Feb 24, 6:05pm (AEDT)

The S&P/ASX 200 closed 11.3 points lower, down -0.15%.

Earnings season is well and truly in full swing and already we're seeing the customary big swings in stock prices. Winners today included Temple & Webster Group (TPW) (+9.9%), Challenger (CGF) (+8.4%), and still basking in yesterday's glory, JB Hi-Fi (JBH) (+5.6%).

On the other hand, prominent losers included Breville Group (BRG) (-8.5%), James Hardie Industries (JHX) (-8.5%), and CSL (-2.8%).

Amidst all of the excitement, the S&P/ASX 200 edged slightly lower as markets tread water ahead of major inflation data due later this week.

Let’s dive in!


Today in Review

Tue 13 Feb 24, 4:37pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,603.6 -0.15%
All Ords 7,847.8 -0.16%
Small Ords 2,965.3 +0.07%
All Tech 2,786.8 -1.24%
Emerging Companies 1,949.8 +0.54%
Currency
AUD/USD 0.6517 -0.19%
US Futures
S&P 500 $5,034.5 -0.13%
Dow Jones $38,836.0 -0.12%
Nasdaq $17,937.25 -0.15%
Name Value % Chg
Sector
Utilities 7,986.1 +0.71%
Financials 7,096.5 +0.32%
Consumer Discretionary 3,338.3 +0.24%
Energy 10,752.0 +0.11%
Materials 17,962.5 -0.04%
Real Estate 3,450.9 -0.05%
Consumer Staples 12,235.5 -0.21%
Industrials 6,834.8 -0.36%
Information Technology 1,907.3 -0.95%
Communication Services 1,602.1 -1.12%
Health Care 42,571.5 -1.64%

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Markets

S&P ASX 200 (XJO) Intraday Chart 13 Feb 2024
ASX 200 Session Chart

The S&P/ASX200 (XJO) finished 11.3 points lower at 7,603.6, 0.38% from its session high and just 0.06% from its low. Despite the fall in the ASX 200, in the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 159 to 121.

The All Ordinaries Gold Sub-Index (XGD) (+1.5%) was the best performing sector today. The gold price is largely unchanged over the last 24-hours, and prior to today, this index had logged five out of six down sessions. So, today's rally is a little out of step with the short term trend.

S&P ASX 200 Gold Sector (XGD) chart
The All Ordinaries Gold Sub-Index had logged five out of six down sessions prior to today

It will be interesting to see how gold stocks go tomorrow, because as mysterious as today's move was, it was impressively broad-based.

Doing it tough today was the Health Care Sector (XHJ) (-1.6%), largely on the back of another poor performance from sector heavyweight CSL (-2.8%). Things went from bad to worse for CSL shareholders who were already smarting from yesterday's news the company would not proceed with commercialising a key heart drug after disappointing Phase 3 trials.

Today's first half results were roughly in-line with consensus estimates, so it's hard to see where yesterday's price response ends and today's begins. Either way, as we'll see in ChartWatch, either way the end result isn't great.

Also smarting from negative results response was James Hardie Industries (JHX) (-8.5%). The key numbers of revenue, EBITDA, and margins were bang on target compared to consensus estimates, but the company's outlook was considered by some brokers to be below expectations. James Hardie is also featured in ChartWatch.

There were many other big earnings-inspired moves today, and you'll find more details on these and more in the Interesting Movers section below.


ChartWatch

Temple & Webster Group (ASX: TPW)

Temple & Webster chart ASX-TPW
The Temple & Webster is a picture of excess demand

I often use the term "picture of excess demand" in ChartWatch. Temple and Webster is a poster child for this phrase, with fantastic trends, excellent price action, and wonderful demand-side candles.

Today's candle could have closed a little higher, but it's still a great representation of how demand sweeps back in to buy the dip. If there was an early supply response to today's earnings, it was gobbled up quickly by plenty of greedy demand! The best uptrends are punctuated with buy the dip activity like this, as well as rising troughs, and pervasive white candles. Tick, tick, tick!

CSL (ASX: CSL)

CSL chart ASX-CSL
Earnings season can be volatile, and can ruin some very nice trends!

The last few ChartWatch's I've discussed the importance of the gap and run pattern. Big gap plus big move equals big shift in sentiment towards a stock. So far though, we've only looked at it in a bullish context, that is gaps up and moves higher.

This has not been by design, rather, simply in response to earnings season moves so far. Today we saw a few bearish gap and run moves, in particular, on CSL, James Hardie Industries (JHX), and Breville Group (BRG).

In each case, there was likely something in each company's results that caused investors to negatively reassess their respective earnings outlooks. In each case, it's a real shame because prevailing short and long term trends were well-established to the upside. Such is the nature of trend following (you don't know what's coming next), and also of the surprise factor earnings season brings with it.

CSL's gap was yesterday and it's run was today. Together, they effectively nullify its short term uptrend as can be seen by the short term trend ribbon transitioning from light green to amber. Only the long term trend ribbon can save CSL from a larger retracement now. That kicks in around $276, and we really want to see some white candles and/or downward pointing shadows there to indicate excess demand has returned.

James Hardie Industries (ASX: JHX)

James Hardie Industries chart ASX-JHX
Earnings season can be volatile, and can ruin some very nice trends x 2!

Another crying shame! Like CSL, James Hardie's bearish gap and run effectively terminates what was a fantastic short term uptrend. Whilst the short term trend ribbon hasn't changed colour to amber yet, a close below the ribbon with such a definitive supply-side candle is enough for me to be satisfied the supply-side has wrestled control of the price for now.

I suggest the James Hardie price must now hold within/above a range of historical resistance/support I've identified between $52.87 (15 Dec peak high) and $53.46 (8 Jan trough low). Demand-side candles in there are essential to stave off a sharper retracement to the long term trend ribbon which will kick in around $50.


Economy

Today

  • AU Westpac Consumer Sentiment

    • +6.2% to 86 points vs -1.3% in January

    • Remains below the key 100 point level which delineates optimism from pessimism

    • Result was strongest in 20-months and is the largest month-on-month gain since April 2023 when the RBA did it's mini-pause on rate hikes

    • See chart below, turning off the bottom, but still a long way to go!

Westpac Melbourne Institute Consumer Sentiment February
Westpac Melbourne Institute Consumer Sentiment February. Source: Westpac, Melbourne Institute
  • AU NAB Business Confidence

    • Business Confidence +1 point to +1 (still a big improvement from the -8 in November)

    • Business Conditions -2 points to +6 (Trading conditions -3pts, Profitability -1pt, Employment -2pts)

    • Forward orders -1pt to -1, labour costs unchanged at +2%

    • Services sectors are under pressure and retail remains weak

Confidence & Conditions (Net Balance, SA). Source-NAB Monthly Business Survey
Confidence & Conditions (Net Balance, SA). Source: NAB Monthly Business Survey

Later this week

Wednesday

  • 00:30 USA Core Consumer Price Index (CPI): forecast +0.3% in Jan to 3.7% p.a. vs +0.3% in Dec to 3.9% p.a.

Thursday

  • 11:30 AU Employment change and unemployment rate: forecast +20,700 in Jan vs -65,100 in Dec & forecast 4.0% in Jan vs 3.9% in Dec

Friday

  • 00:30 US Core Retail Sales: +0.1% in Jan vs +0.4% in Dec

Saturday

  • 00:30 USA Core Producer Price Index (CPI): forecast +0.1% in Jan to 1.4% p.a. vs +0.0% in Dec to 1.0% p.a.

  • 04:10 USA Preliminary University of Michigan Consumer Sentiment: 79.9 in Feb vs 79. in Jan


Latest News


Don't miss an ASX announcement this reporting season, check out our comprehensive H1 FY24 Earnings Season Calendar and set up and receive announcements direct to your inbox on Market Index: Create Alert Now


Interesting Movers

Trading higher

  • +9.9% Temple & Webster Group (TPW) - Half Yearly Report and Accounts

  • +9.0% Catapult Group International (CAT) - No news, rise is consistent with prevailing short and long term uptrends

  • +8.4% Challenger (CGF) - 1H24 Financial Results

  • +8.0% Beacon Lighting Group (BLX) - No news, rise is consistent with prevailing short and long term uptrends

  • +7.4% EML Payments (EML) - No news 🤔

  • +7.0% Piedmont Lithium Inc (PLL) - No news 🤔

  • +6.7% Beach Energy (BPT) - Continued positive response to yesterday's: Beach Energy FY24 Half Year Results, rise is consistent with prevailing short and long term uptrends

  • +6.4% Emerald Resources (EMR) - No news, rise is consistent with prevailing short and long term uptrends

  • "+6.3% Cettire (CTT) - Continued positive response to 7 Feb: H1 FY24 Appendix 4D and Financial Report, rise is consistent with prevailing short and long term uptrends

  • +5.6% JB HI-FI (JBH) - Continued positive response to yesterday's: Appendix 4D and Financial Report - 2024 Half Year, rise is consistent with prevailing short and long term uptrends

  • +4.7% Bravura Solutions (BVS) - No news, rise is consistent with prevailing short and long term uptrends

  • +4.7% Hansen Technologies (HSN) - Hansen acquires powercloud, rise is consistent with prevailing short and long term uptrends

  • +4.5% Accent Group (AX1) - No news, rise is consistent with prevailing short and long term uptrends

Trading lower


Broker Notes

  • Audinate Group (AD8)

    • Retained at buy at UBS; Price Target: $21.05 from $13.55

    • Retained at overweight at Morgan Stanley; Price Target: $22.00 from $13.30

    • Retained at neutral at Macquarie; Price Target: $17.90 from $15.80

  • ANZ Group (ANZ)

    • Retained at neutral at Citi; Price Target: $26.00

    • Retained at buy at Goldman Sachs; Price Target: $27.84

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

    • Retained at overweight at Morgan Stanley; Price Target: $27.40

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

    • Retained at neutral at Jarden; Price Target: $26.70 from $26.30

    • Retained at accumulate at Ord Minnett; Price Target: $31.00

  • Aurizon Holdings (AZJ)

    • Downgraded to neutral from positive at E&P; Price Target: $3.97 from $4.00

    • Retained at neutral at Citi; Price Target: $4.00 from $3.90

    • Retained at neutral at Goldman Sachs; Price Target: $4.05

    • Retained at neutral at UBS; Price Target: $3.80 from $3.65

    • Retained at underweight at Morgan Stanley; Price Target: $3.49

    • Retained at neutral at Macquarie; Price Target: $3.85 from $3.88

    • Retained at neutral at Jarden; Price Target: $3.95 from $3.80

    • Retained at accumulate at Ord Minnett; Price Target: $4.70

  • Black Cat Syndicate (BC8) retained at buy at Shaw and Partners; Price Target: $0.74

  • Beach Energy (BPT)

    • Upgraded to outperform from neutral at Macquarie; Price Target: $1.95 from $1.55

    • Upgraded to outperform from sector perform at RBC Capital Markets; Price Target: $1.95 from $1.70

    • Retained at neutral at Citi; Price Target: $1.65

    • Retained at sell at Goldman Sachs; Price Target: $1.67 from $1.66

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

    • Retained at equalweight at Morgan Stanley; Price Target: $1.65

    • Retained at overweight at Jarden; Price Target: $1.85

    • Retained at accumulate at Ord Minnett; Price Target: $2.50

  • Breville Group (BRG) retained at neutral at Jarden; Price Target: $23.80

  • CAR Group (CAR)

    • Downgraded to neutral from outperform at Macquarie; Price Target: $32.70 from $35.30

    • Downgraded to neutral from overweight at Barrenjoey; Price Target: $36.00 from $30.00

    • Downgraded to underperform from outperform at CLSA; Price Target: $35.00 from $31.00

    • Retained at neutral at Citi; Price Target: $34.30

    • Retained at neutral at Goldman Sachs; Price Target: $33.00 from $32.00

    • Retained at buy at UBS; Price Target: $38.50 from $32.40

    • Retained at underweight at Jarden; Price Target: $29.00 from $27.50

    • Retained at lighten at Ord Minnett; Price Target: $26.00 from $25.00

  • Challenger (CGF) retained at overweight at Jarden; Price Target: $7.25

  • Cochlear (COH) retained at underweight at Morgan Stanley; Price Target: $258.00

  • Charter Hall Social Infrastructure REIT (CQE) retained at underweight at Jarden; Price Target: $3.05

  • CSL (CSL)

    • Retained at buy at Citi; Price Target: $325.00

    • Retained at overweight at Morgan Stanley; Price Target: $318.00

    • Retained at outperform at Macquarie; Price Target: $317.50 from $322.50

    • Retained at overweight at Jarden; Price Target: $298.57 from $316.16

    • Retained at hold at Ord Minnett; Price Target: $310.00

  • IDP Education (IEL) upgraded to buy from outperform at CLSA; Price Target: $23.50 from $24.50

  • IGO (IGO) retained at outperform at Macquarie; Price Target: $9.20

  • Iluka Resources (ILU)

    • Retained at buy at Goldman Sachs; Price Target: $9.80

    • Retained at outperform at Macquarie; Price Target: $8.30

  • Janison Education Group (JAN) retained at buy at Bell Potter; Price Target: $0.50 from $0.55

  • JB Hi-Fi (JBH)

    • Upgraded to neutral from negative at E&P; Price Target: $56.19 from $43.43

    • Upgraded to hold from underperform at Jefferies; Price Target: $52.50 from $38.50

    • Retained at buy at Citi; Price Target: $65.00

    • Retained at neutral at Goldman Sachs; Price Target: $56.50 from $54.10

    • Retained at neutral at UBS; Price Target: $60.00 from $55.00

    • Retained at underweight at Morgan Stanley; Price Target: $50.00 from $43.90

    • Retained at neutral at Macquarie; Price Target: $64.00 from $55.00

    • Retained at underweight at Jarden; Price Target: $50.80 from $40.20

    • Retained at sell at Ord Minnett; Price Target: $37.50 from $36.40

  • James Hardie Industries (JHX) retained at neutral at Jarden; Price Target: $48.00

  • Arcadium Lithium (LTM) retained at outperform at Macquarie; Price Target: $11.00

  • Lynas Rare Earths (LYC)

    • Retained at buy at Goldman Sachs; Price Target: $7.20 from $7.50

    • Retained at outperform at Macquarie; Price Target: $7.00

  • Mineral Resources (MIN) retained at outperform at Macquarie; Price Target: $75.00

  • Noumi (NOU) initiated at buy at Bell Potter; Price Target: $0.16

  • Propel Funeral Partners (PFP) retained at buy at Bell Potter; Price Target: $6.20 from $5.90

  • Pilbara Minerals (PLS) retained at outperform at Macquarie; Price Target: $4.50

  • Pinnacle Investment Management Group (PNI) upgraded to buy from hold at Ord Minnet; Price Target: $13.00 from $10.50

  • QBE Insurance Group (QBE) retained at outperform at Macquarie; Price Target: $16.60

  • Scentre Group (SCG) retained at overweight at Morgan Stanley; Price Target: $3.30

  • Seek (SEK) retained at buy at Jarden; Price Target: $29.60

  • Synlait Milk (SM1) retained at hold at Bell Potter; Price Target: $0.75 from $0.95

  • Santos (STO) downgraded to neutral from buy at Citi; Price Target: $7.75 from $8.25

  • Temple & Webster Group (TPW) retained at buy at Jarden; Price Target: $8.56

  • Woodside Energy Group (WDS) retained at sell at Citi; Price Target: $27.00 from $26.50

  • Worley (WOR) retained at buy at UBS; Price Target: $21.30 from $22.50


Scans

Top Gainers

Code Company Last % Chg
IRX Inhalerx Ltd $0.032 +60.00%
ARR American Rare EAR... $0.335 +39.58%
HMX Hammer Metals Ltd $0.048 +37.14%
PPY Papyrus Australia... $0.016 +33.33%
BSX Blackstone Minera... $0.07 +29.63%
View all top gainers

Top Fallers

Code Company Last % Chg
HCL Highcom Ltd $0.18 -43.75%
GRE Greentech Metals Ltd $0.205 -39.71%
ABE Australian Bond E... $0.029 -27.50%
STX Strike Energy Ltd $0.315 -25.00%
NYM Narryer Metals Ltd $0.034 -24.44%
View all top fallers

52 Week Highs

Code Company Last % Chg
ARR American Rare EAR... $0.335 +39.58%
AND Ansarada Group Ltd $2.43 +15.71%
BRE Brazilian Rare EA... $2.17 +11.28%
TPW Temple & Webster ... $11.01 +9.88%
FND Findi Ltd $1.75 +8.36%
View all 52 week highs

52 Week Lows

Code Company Last % Chg
HCL Highcom Ltd $0.18 -43.75%
ABE Australian Bond E... $0.029 -27.50%
STX Strike Energy Ltd $0.315 -25.00%
NYM Narryer Metals Ltd $0.034 -24.44%
OSX Osteopore Ltd $0.032 -20.00%
View all 52 week lows

Near Highs

Code Company Last % Chg
MQG Macquarie Group Ltd $186.25 -1.01%
ASB Austal Ltd $2.13 0.00%
VCF Vanguard Internat... $37.90 -0.29%
MQGPD Macquarie Group Ltd $105.84 +0.32%
SSG Shaver Shop Group... $1.20 +0.42%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
DMP Domino's PIZZA En... $39.79 +1.04%
LEL Lithium Energy Ltd $0.31 -4.62%
NAN Nanosonics Ltd $2.91 -0.34%
LGL Lynch Group Holdi... $1.415 -2.75%
TGF Tribeca Global Na... $1.47 0.00%
View all RSI oversold

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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