The S&P/ASX 200 closed 15 points lower, down -0.21%.
Alright, it's our first crack at the Evening Wrap. It's got a similar format and style as the Morning Wrap. They'll likely be some tweaks for this piece over the next few days and weeks. Feedback is always appreciated.
Let's dive in.
Markets
3 out of 11 sectors advanced
Energy and Healthcare led gains
Growth-heavy sectors underperformed
68% of the top 200 companies declined
72% of the top 500 companies declined
Stocks
IPH (ASX: IPH) +14.8%: Posted underlying FY22 net profit growth of 14% to $76.2m. The company said it experienced strong patent filing growth of 9.4% across its Asian jurisdictions.
Treasury Wine (ASX: TWE) +3.9%: Reversed a -4.8% dip after posting FY22 net profit growth of 5.3%. Revenue fell but sales per case rose 16.1% thanks to price hikes and product premiumisation.
Origin (ASX: ORG) -2.97%: Bounced back from intraday lows of -7.4%. FY22 underlying profits rose 30% to $407m but statutory profits were -$1.4bn due to impairments. Origin said it expects higher earnings in FY23
Transurban (ASX: TCL) -3.5%: Lifted FY22 dividends by 12.3% to 41 cents per share as Q4 traffic beat pre-pandemic levels and hit an all-time high. Transurban said it expects to pay an FY23 distribution of 53 cents per share, below Morgans expectations of 59.5 cents
Evolution Mining (ASX: EVN) -4.3%: Reported 11% revenue growth to $2.1bn but profits fell -22% to $275m amid industry-wide inflationary pressures. Flagged 5-6% labour cost growth in FY23. Group production projected to grow to 720,000 oz in FY23 from 640,275 oz
Blackmores (ASX: BKL) -10.2%: Revenue rose 12.8% in FY22 to $650m, underlying net profits rose 22.6% to $31.1m. No guidance provided, outlook commentary was rather cautious
Management: "In China the Company continues to navigate consumer and trade headwinds, however there are early signs of supply chains re-shaping with consumer demand improving ..."
Codan (ASX: CDA) -10.4%: Net profit rose 3% to $100.5m in FY22, in-line with the company's previous guidance. Metal detection segment revenues fell -20%, now accounting for only 52% of Group sales from 75% a year ago
Economy
Australia unemployment rate fell to 3.4% in July from 3.5% in June
Consensus expected unemployment to stay unchanged at 3.5%
"The fall in unemployment in July reflects an increasingly tight labour market, including high job vacancies and ongoing labour shortages, resulting in the lowest unemployment rate since August 1974,” said Bjorn Jarvis, head of labour statistics at the ABS
Commodities
Iron ore futures on the Dalian Commodity Exchange fell -1.3%
China's infrastructure stimulus has not been enough to offset weakness in its construction sector caused by the ongoing property crisis (Bloomberg)
Indices
S&P/ASX 200 Consumer Staples: Breaking out of 12-month long trendline.
S&P/ASX 200 Materials: Rejecting the 200-day moving average. Goldman cut China’s GDP forecast after a string of weak economic data last week and near-term energy constraints, according to Bloomberg. Not a good look for iron ore.
Sectors and stocks
Coal stocks: Ripping higher as heatwaves in Europe and Asia lift demand for energy resources. China's coal burn has set new records during three of the last four weeks, according to Breakwave. The Chinese province of Guangdong also approved the construction of five new coal power plants. Newcastle coal futures up 2.2% to US$413.9 a tonne. Coal names are very extended from the 20-day but still interesting to see them break out in a tough market.
Lithium stocks: Many lithium names are down 4-5 days in a row as they pullback from an extraordinary bounce. It will be interesting to see how runners behave if they fall back towards the 20-day moving average. The good thing is that the massive run up has helped flatten damaged longer-term moving averages like the 200-day. Stock performance has been quite mixed. You have names like Liontown (ASX: LTR) at almost breakeven today. And then you have names like Vulcan (ASX: VUL) and Lake Resources (ASX: LKE).
Tech stocks: Seeing quite a bit of selling pressure come through for tech stocks. The S&P/ASX 200 Info Tech Index led Thursday's decline, down more than -2%. Large cap stocks aside, there were some pretty ugly declines for recent comeback names like Pointsbet (ASX: PBH), Block (ASX: SQ2) and Codan (ASX: CDA).
CSL: Has staged a rather vertical bounce from its post-earnings dip. The stock went from breaking down to trying to break out. See how it trades around the key $300 level.
Eyes on a pullback: Equity markets, more broadly speaking, are starting to show some signs of fatigue. This is especially the case for the leading sectors like lithium and tech. Major US indices and the ASX have rallied above the 200-day moving averages. It will be interesting to see whether or not these levels can provide some support if things go south.
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