Evening Wrap: ASX gains fizzle, Woodside jumps to a 2-month high, coal stocks running hot

The S&P/ASX 200 closed 2 points higher, up 0.02%.

Thanks for tuning into our second crack at an Evening Wrap. We're slowly getting there. There will be some tweaks (especially for that chart below) in the coming days and weeks.

Let's dive in.

ASX 200, All Ords and All Tech intraday overview

Markets

• 5 out of 11 sectors higher

• Energy rallied an outsized 3.96% as oil prices bounced back

• Real Estate underperformed thanks to a -2.6% decline from heavyweight Goodman Group

• Healthcare also lagged thanks to CSL snapped a massive two day winning streak

• 53% of the top 200 higher

• 48% of the top 500 higher

Stocks

• Coal stocks including Whitehaven (ASX: WHC), New Hope (ASX: NHC) and Terracom (ASX: TER) are all between 4-6% amid record coal consumption in China and supply concerns in Germany

• Energy stocks including Woodside (ASX: WDS), Santos (ASX: STO) and Beach Energy (ASX: BPT) rallied between 3-6% following a rise in oil prices

• Accent Group (ASX: AX1) +10.9% posted FY22 sales growth of 14% to $1.1bn. Undisrupted trading conditions for the first seven weeks of FY23 have seen sales jump 48.9% compared to the same period a year ago

• Newcrest Mining (ASX: NCM) +3.6% posted a -7% decline in gold production to 1.95m oz and -25% decline in profit to $872m amid industry-wide inflationary pressures. FY23 gold production forecast to be 2.1m to 2.4m

• Cochlear (ASX: COH) +2.2% FY22 hearing implant units bounced back above pre-pandemic levels to 38,182 units compared to 34,083 units in FY19. Cochlear forecasts profits to grow 5-10% in FY23 and skew towards the second-half

• AGL Energy (ASX: AGL) -3.9% shares are on a five day losing streak. FY22 underlying profit fell -58% to $225, within the company's guidance

• Inghams (ASX: ING) -9.4% posted a -43.6% drop in underlying profits due to a significant increase in feed and fuel costs. ING shares are down -26% year-to-date

• TPG Telecom (ASX: TPG) -12.4% first-half results missed expectations, revenue growth was flat and adjusted profits rose 3.8% to $331m. There was around 15 mentions of "momentum" in the Q&A transcript, management downplayed the earnings miss and tried to point towards a much stronger performance in 2H

Economy

• Japan inflation accelerated to 2.4% in July from 2.2% in June

  • Core inflation hit a seven-and-a-half year high of 2.4%

  • Still, the Bank of Japan is expected to keep monetary conditions extremely loose to buoy its fragile economy

Commodities 

• Iron ore futures currently point towards a weekly decline of -5.9% to US$103 a tonne

Scans

Latest news

Charts

Indices

Overall, Friday was a choppy day. The broader market struggled to hold onto gains, but given the recent rally, closing at breakeven doesn't seem that bad. The market feels fatigued, volatile and more right hand side is needed.

S&P/ASX 200: Showed so much strength in early trade, up 0.35%. Rally fizzed, but still holding above the 200-day. Market is extended, relative to the 20-day. More time is needed to digest the recent run up.

Source: TradingView

S&P/ASX 200 Energy Index: Basically a replica of Woodside. Starting to move up after a prolonged period of consolidation.

Source: TradingView

S&P/ASX 200 Financials Index: All the big four banks were red on Friday. Index resting on the 200-day. Can it find some support and consolidate here after a 15% rally from June lows?

Source: TradingView

Stocks

CSL rangebound: 1.2m shares traded on Friday vs. 20-day average of ~706,800. Sellers coming in after a horizontal rebound from Wednesday lows. On the topic of biotech, some names are getting really ugly after a massive breakout in late June. Telix Pharma (ASX: TLX) and Polynovo (ASX: PNV) have fallen rather abruptly.

Source: TradingView, Annotations by Market Index

Lithium stocks: Were really choppy today. The open was rather positive, with most names green. The close was anyone's game. More time is needed to see how these stocks behave as they pull into key moving averages.

Weekend thoughts

The market is starting to stall. The Fed pivot and easing CPI inspired euphoria is starting to come back to earth. We're seeing risk appetite fall, evident by key assets like the ARK Innovation ETF (down -9% in last three sessions), Betashares Australian Technology ETF (down -2.5% in last four sessions) and Bitcoin (six day losing streak, down -6.8%).

Still, indices are holding up relatively well.

China continues to post depressing economy data even as headlines continue to say 'stimulus' every day. If there really was that much stimulus going around, would iron ore really be close to a 9 month low. It seems like more is needed from the Chinese government but that runs the risk of bumping up inflation. Tough times eh?

Thanks for tuning. Feedback is always appreciated. If you're new to investing, does this Wrap move too fast? Are things too chart-y or should there be more charts? My inbox is always open to suggestions and ideas.

Have a good weekend!