Morning Wrap: ASX 200 futures flat, Gold closes at record high + CSL, Seek and Netwealth results

Major US benchmarks closed around breakeven ahead of key inflation data, gold prices hit a record high as tensions escalating in the Middle East, Speculation continues over sale of Albermale stake in Greenbushes lithium mine to IGO plus more FY24 results to flow through this morning.

Let's dive in.

S&P 500 SESSION CHART

Choppy session, with the S&P 500 closing around breakeven (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished mixed as most sectors finished lower, offset by Nvidia (+4.0%) and gains from energy stocks

• Relatively uneventful session as the market continued to weigh well-known themes including normalising positioning and sentiment, Fed pivot, broadening earnings and rising geopolitical tensions in the Middle East

• Deutsche Bank says aggregate equity positioning plunged last week from mid-July peak of 97th percentile to below average of 31st percentile

• Goldman Sachs says positioning dynamic has completely changed since 17-Jul and now starting to show signs of green shoots after de-grossing

• Gold finished at a record high while oil prices spiked ~3% as the latest headlines around Israel and Iran raised supply concerns

• Rotation into small-caps short-lived as investors pull money out again (Bloomberg)

• Inverse relationship between bonds and stocks has returned as investors seek hedges, bond demand is surging (Bloomberg)

• Japan retail investors keep faith in stocks despite volatility, seen dip-buying (Nikkei)

• OPEC+ cuts its forecast for global oil demand growth in 2024 citing softer expectations for China (Reuters)

STOCKS

• Barrick Gold eyeing opportunities in Canada amid higher prices (Bloomberg)

• JetBlue shares sink more than 20% after announcing plans to sell US$400m of convertible senior notes, company's credit ratings also downgraded by ratings agencies (CNBC)

• Equinox-owned gym chain Blink Fitness files for Chapter 11 bankruptcy (CNBC)

• Google moves up Pixel launch to August to front run iPhone October release (Bloomberg)

CENTRAL BANKS

• BoE's Mann warns against complacency as inflation risks persist despite rate cuts (FT)

POLITICS & GEOPOLITICS

• Iran could attack Israel in less than 24 hours according to latest intelligence (Fox News)

• Zelensky confirms capture of Russian territory in Kursk region (Bloomberg)

• Biden officials to meet with Chinese counterparts on ways to maintain economic and financial stability (NY Times)

• US sends submarine to Middle East as fears grow of reprisal against Israel by Iran (FT)

• Hamas says it won't take part in Gaza hostage-ceasefire deal talks with Israel (Reuters)

ECONOMY

No major economic announcements.

ASX TODAY

• Abacus Storage FY24 results (ASK)

• Albemarle considering selling its 49% stake in Greenbushes lithium mine (The Aus)

• Challenger FY24 results (CGF)

• CSL FY24 results (CSL)

• Qatar in talks to take up to 20 per cent stake in Virgin Airlines (AFR)

• Sigma Healthcare and Chemist Warehouse deal decision pushed back by ACCC till October (AFR)

• Sims to sell UK Metal business for total after tax cash proceeds ~A$385m (SGM)

• Temple & Webster FY24 results, trading update, CFO appointment (TPW)

 WHAT TO WATCH TODAY

Wall Street finished deceptively breakeven overnight, with most sectors outside of tech and energy trending lower. This could see a bit of weakness for the local market. Our overnight ETF watchlist was also pretty messy. The main sectors to watch today are:

• Gold: Gold prices rallied 1.7% overnight to close at record highs of US$2,470 an ounce. This drew a strong response for the VanEck Gold Miners ETF (+2.96%). NYSE-listed Newmont shares also rose 2.2%. This should see local gold names gap up at market open.

• Energy: Oil prices rallied around 3% overnight on ramping Middle East concerns. Even if oil fundamentals aren't great, the price will rise on geopolitical risk premium. The price action for the S&P 500 Energy Sector was rather interesting. It was down as much as 2.1% in early trade but finished the session 0.5% higher.

Here are the key numbers for some of today's reporters:

• CSL: Macquarie (3-Jul) is expecting US$14.62bn revenue, US$2.57bn NPAT, adjusted EPS of 603 US cents and a full-year dividend of 258 cents per share. In terms of FY25, the analysts forecast NPATA of US$3.36bn.

• Seek: Macquarie (25-Jul) analysts forecast FY24 revenue of $1.08bn, EBITDA of $475m, NPAT of $181m and full-year dividend of 31 cents per share. They're also expecting job ad volumes to fall 19% year-on-year, partially offset by a 10% increase in prices.

• Netwealth: Morgan Stanley (10-Jul) is looking for FY24 revenue of $263m, EBITDA of $130m, net income of $89m and EPS of 36 cents per share.

• Temple & Webster: Citi (5-Jun) analysts forecasted FY24 revenue of $502m, EBITDA of $10.9m, reported net profit of $3.4m and closing cash balance of $108.5m.

Also keep an eye out for some of yesterday's reporters:

• Aurizon: Missed Macquarie's FY24 net profit and full-year dividend expectations by around 5% and 2.2% respectively. FY25 guidance was also a 2.2% miss against consensus. A miss by what is supposed to be a stable earner and income stock will result in substantial selling (e.g. stock opened 5% on Monday, finished 8.8% lower). Let's see if this pressure continues. Also note several broker downgrades below.

• JB Hi-Fi: Solid beat across the board plus an unexpected special dividend of 80 cents per share. That said, JB Hi-Fi is trading at a PE of around 17.5-times, a tad expensive relative to historic averages.

BROKER MOVES

• Alcoa resumed coverage with Buy from prior Sell; target up to $38 from $32 (UBS)

• ANZ upgraded to Buy from Neutral; target up to $32 from $30 (UBS)

• Aurizon downgraded to Hold from Outperform; target cut to $3.40 from $3.80

• Aurizon downgraded to Underweight from Neutral; target cut to $3.25 from $3.75 (Jarden)

• Aurizon upgraded to Equal-weight from Underweight but target cut to $3.55 from $3.77 (Morgan Stanley)

• Beach Energy downgraded to Sector Perform from Outperform; target cut to $1.40 from $1.75 (RBC Capital) 

• QBE upgraded to Buy from Hold but target cut to $18.27 from $18.47 (Bell Potter)

• Westpac upgraded to Neutral from Sell; target up to $30 from $25 (UBS)

Stocks trading ex-dividend: 

• Tue 13 Aug: None

• Wed 14 Aug: Australian Foundation Investment Co (AFI) – $0.145, Resmed (RMD) – $0.057

• Thu 15 Aug: Kovest (KOV) – $0.40, Reckon (RKN) – $0.025, Pacific Smiles (PSQ) – $0.07, Rio  Tinto (RIO) – $2.70 

• Fri 16 Aug: Argo Investments (ARG) – $0.18, QBE Insurance (QBE) – $0.24

• Mon 19 Aug: Seven Group (SVW) – $0.30

Other ASX corporate actions today: 

• Dividends paid: Transurban (TCL) – $0.32

• Listing: None  

• Earnings: Abacus Storage (ASK), Challenger (CGF), CSL (CSL), Downer (DOW), James Hardie (JHX), Lifestyle Communities (LIC), Netwealth (NWL), Seek (SEK), Temple & Webster (TPW) 

• AGMs: None

Economic calendar (AEST):

• 10:30 am: Australia Consumer Confidence (Aug)

• 11:30 am: Australia Business Confidence (Jul)

• 7:00 pm: Germany ZEW Economic Sentiment Index (Aug)

• 10:30 pm: US Producer Price Index (Jul)