Morning Wrap: ASX 200 to fall, Nvidia tumbles on earnings + Wesfarmers, MinRes FY24 results

The all-important Nvidia result topped analyst expectations but its Q3 guidance fell short of lofty analyst forecasts, Mineral Resources reports an unsurprising dip in profits amid soaring debt levels, brokers pile into Tabcorp downgrades and several names including Wesfarmers, Bega Cheese and IDP Education are due to report this morning.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks lower but off worst levels

• Relatively risk-off session, with Mag-7 broadly lower, Bitcoin (-5.4%) below US$60,000 level and US dollar index up 0.5% from 12-month lows

• Berkshire Hathaway hits US$1tn market cap, making it the first US company outside tech to do so (CNBC)

• UBS says democrat election win will be negative for telecoms, tech, banks, autos but positive for utilities and blue-chip capital goods (Bloomberg)

STOCKS

• Super Micro delays filing its financial disclosures, worries drag shares down 20% (BBG)

• Apple cuts 100 jobs in Digital Services group, signalling shift in priorities (BBG)

• Ferrari stock soars on brand loyalty and limited China exposure (BBG)

• Lego revenue jumps 13% in first-half, strength across portfolio and Fortnite (CNBC)

NVIDIA EARNINGS

• Shares currently down around 7% after hours

• Q2 revenue up 122% to US$30.0bn (4.4% beat vs. consensus)

• Q2 data centre revenue up 154% to US$26.2bn (5.0% beat)

• Q2 EPS up 168% to 67 US cents (4.6% beat)

• Q3 revenue guidance of US$32.5bn (2.2% beat but top end of estimates went as high as US$37.9bn)

• Announces US$50 billion buyback

• Things to note – This is the smallest revenue % beat in six quarters, Q2 gross margins negatively impacted by inventory provisions for low-yielding Blackwell material

POLITICS & GEOPOLITICS

• US and China to hold talks in Beijing in bid to stabilise relations (BBG)

• Ukraine secures more than US$20bn of debt from international bondholders (FT)

ECONOMY

• Australia inflation slows to four-month low in July, but still firmer than expected (RT)

• UBS cuts China growth forecast for 2024 and 2025 due deeper-than-expected property market downturn (BBG)

ASX TODAY

Today’s another massive earnings day. You can view all announcements via our ASX Announcements page. (Note: There were a few after-hours results which won’t appear on the page – These companies include DSE, MAQ, OMH, QRI, PTM, AQZ and MIN)

• Baby Bunting shareholder HMC Capital raises stake from 12.3% to 14.9% (BBN)

• Nine mulls what to do with Domain stake, sources say certain PE firms including EQT, KKR, Blackstone and TPG were contained to gauge potential interest (AFR)

• Tabcorp likely to tap the market after worse-than-expected FY24 earnings (The Aus)

WHAT TO WATCH TODAY

ASX 200 set to fall after a weak lead from Wall Street. Nvidia selloff could place further downward pressure on markets and tech stocks. A few overnight ETFs in the midst of a pullback including Gold (-2.1%), Copper Miners (-3.4%) and Uranium (-3.4%).

A few reporters to note include:

• MinRes: The result reads fairly negative at face value but largely in-line with UBS estimates (e.g. $1bn EBITDA in-line and nil final dividend was expected).

• Qantas: Goldman is looking for FY24 EBITDA of $4.03bn, net income of $1.41bn, EPS of 85 cents and no dividend.

• Wesfarmers: Morgan Stanley expects FY24 revenue of $44bn, NPAT of $2.56bn, EPS of 226 cents and total dividend of 192 cents per share.

BROKER MOVES

• Fortescue upgraded to Hold from Sell; target up to $17.58 from $17.41 (BP)

• Flight Centre upgraded to Neutral from Sell; target up to $20.30 from $19.50 (GS)

• Lovisa downgraded to Hold from Buy; target cut to $33 from $36 (BP)

• Lynas downgraded to Hold from Buy; target up to $7.20 from $7 (JEF)

• Lynas upgraded to Outperform from Hold; target up to $7.75 from $6.30 (CLSA)

• Platinum Asset Management upgraded to Hold from Underperform; target up to $0.90 from $0.85 (CLSA)

• Tabcorp downgraded to Neutral from Outperform; target cut to $0.50 from $1.0 (MQG)

• Tabcorp downgraded to Hold from Outperform; target cut to $0.50 from $0.78 (CLSA)

Stocks trading ex-dividend: 

• Thu 29 Aug: REA Group (REA) – $1.02, Beach Energy (BPT) – $0.02, Evolution Mining (EVN) – $0.05, Ventia Services (VNT) – $0.09, Ebos Group (EBO) – $0.497, Bapcor (BAP) – $0.055, Corporate Travel (CTD) – $0.12, Insurance Australia (IAG) – $0.17, Jumbo Interactive  (JIN) – $0.275, Dalrymple Bay Infrastructure (DBI) – $).054, Regal Partners (RPL) – $0.08, Gold Road (GOR) – $0.005

• Fri 30 Aug: Orora (ORA) – $0.05, Hitech Group (HIT) – $0.05, Ampol (ALD) – $0.60, Carlton Investments (CIN) – $0.63, Big River (BRI) – $0.02, Infomedia (IFM) – $0.02 

• Mon 2 Sep: Pinnacle Investment Management (PNI) – $0.264, Integrated Research (IRI) – $0.02, Prime Financial Group (PFG) – $0.009, EQT (EQT) – $0.53, GR Engineering Services (GNG) – $0.10, Arn Media (A1N) – $0.012

• Tue 3 Sep: Endeavour Group (EDV) – $0.075, Stanmore Resources (SMR) – $0.065, Solvar (SVR) – $0.05, Peter Warren Automotive (PWR) – $0.06, Lynch Group (LGL) – $0.08, Codan (CDA) – $0.12, Iluka Resources (ILU) – $0.04, Northern Star (NST) – $0.25, Coles (COL) – $0.32

• Wed 4 Sep: Pacific Current Group (PAC) – $0.23, Praemium (PPS) – $0.01, Shaver Shop (SSG) – $0.055, Newmont (NEM) – $0.265, Pro Medicus (PME) – $0.22, Seek (SEK) – $0.16, Lifestyle Communities (LIC), Helia Group (HLI) – $0.15, Clearview Wealth (CVW) – $0.017, Medibank (MPL) – $0.09, Whitehaven Coal (WHC) – $0.13, Sonic Healthcare (SHL) – $0.63, Universal Store (UNI) – $0.19, Objective Corp (OCL) – $0.08, Servcorp (SRV) – $0.13

Other ASX corporate actions today: 

• Dividends paid: Dexus (DXS) – $0.213, Mirvac (MGR) – $0.06, Waypoint REIT (WPR) – $0.04, Aloca (AAI) – $0.10

• Listing: None  

• Earnings: Alpha HPA (A4N), Australian Clinical Labs (ACL), Aeris Resources (AIS), Atlas Arteria (ALX, Bega Cheese (BGA), Bigtincan (BTH), Cromwell Property Group (CMW), Cettire (CTT), Clinuvel Pharma (CUV), Generation Development Group (GDG), Harvey Norman (HVN), IDP Education (IEL), IGO (IGO), Mesoblast (MSB), Nickel Industries (NIC), Perpetual (PPT), Qantas (QAN), South32 (S32), Sandfire Resources (SFR), Silex Systems (SLX), Southern Cross Media (SXL), Wesfarmers (WES), Westgold Resources (WGX)

• AGMs: Webjet (WEB)

Economic calendar (AEST):

• 10:00 pm: Germany Inflation (Aug)

• 10:30 pm: US GDP Growth (Q2)