Morning Wrap: ASX 200 to fall, S&P 500 slips ahead of Powell speech + Inghams, Paladin Energy results

A weak Wall Street lead is set to drag the local sharemarket lower on Friday, gold prices pullback back sharply from all-time highs, Canada's railway labour dispute adds further pain to global supply chains and a slower day for full-year results, with key reporters including Inghams, Jumbo Interactive and Paladin Energy.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 trend slower to finish near worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished lower and near worst levels

• Equal-weight S&P 500 outperformed the official index by more than 50 bps as value sectors like Real Estate, Financials and Energy sectors ticked higher

• US market volumes remain thin and without any definite catalysts ahead of Powell’s comments at Jackson Hole at midnight 

• Gold experienced a sharp pullback from record highs as the US dollar and bond yields ticked higher

• Oil prices bounced after falling to a near six-month low on Thursday

• MSCI continues to cut Chinese stocks from global benchmarks while boosting India's weighting (FT)

STOCKS

• BP shares hit two-year low as investors protest pivot to green energy (Bloomberg)

• Shipping companies increasingly evaluating contingency plans as Canada railway labor dispute worsens (Reuters)

• Bezos-backed Perplexity AI to launch ads on its search platform (Reuters)

• Data storage company Snowflake raises FY revenue guidance and buyback amount, though market share, margins cited as concerns (Bloomberg)

CENTRAL BANKS

• Fed minutes signal strong likelihood of September rate cut (Reuters)

• Bank of Korea leaves rates unchanged as expected, more board members open to rate cut in next three months (Bloomberg)

• Mexico poised for rate cut next month as growth and inflation slow (Bloomberg)

• ECB minutes show support for cuts despite higher-than-expected July inflation (FT)

POLITICS & GEOPOLITICS

• Israel continues Gaza offensive while West urges Gaza truce deal (Reuters)

• Russia claims it has thwarted a new Ukrainian cross-border raid (Reuters)

ECONOMY

• US initial jobless claims were steady at 232,000 vs. 231,000 consensus, continuing claims highest since Nov-21 (Reuters)

• Olympics boost Eurozone economy, but underlying weaknesses persist (Bloomberg)

• UK private sector growth hits four-month high as inflation cools, boosting economic outlook (Bloomberg)

• Japan's manufacturing slump eases as services expand, but inflation persists (Reuters)

ASX TODAY

ASX 200 futures are pointing towards a weak start but I'm wondering if the outperformance of US sectors like Financials, Real Estate and Healthcare will soften the decline.

• Fisher & Paykel provides first-half guidance, upgrades FY24 NPAT to NZ$320-370m from prior NZ$310-360m (FPH)

• Newmont non-core asset sale pegged for end-year, Macquarie on board (AFR)

• Spark New Zealand FY24 underlying NPAT NZ$342m vs. NZ$411m consensus (SPK)

• Telix reports first-half NPAT of $29.7m, reaffirms FY revenue guidance (TLX)

• Whitehaven Coal to sell 30% Blackwater mine stake to Nippon Steel, JFE (Reuters)

WHAT TO WATCH TODAY

Today will be a more relaxed session after a heavy week of corporate earnings. A few things to watch out for include:

• Resource pullback: The S&P/ASX 200 Materials Index is up four of the last five sessions but expect a bit of a pullback on Friday. Our overnight ETF watchlist flagged broad-based weakness across several sub-sectors like lithium, uranium, nickel and copper.

• Broker moves: Megaport will face several analyst downgrades after its poor result yesterday (FY25 revenue and EBITDA guidance missed by 7-15%). Will it face more selling pressure today? Super Retail Group is also facing a few downgrades (despite a solid result and special dividend) likely due to valuation.

• Today's results: A slower day for results but a few data points stand out for the ones that have come out this morning. Inghams reported FY profit of $100.1m vs. $113m consensus, its EBITDA outlook of $236-250m missed expectations by around 6%. Latitude's first-half result was a little soft at the profit level and no dividend was declared vs. expectations of 2 cents per share. Accent's FY result topped its own guidance plus an above consensus dividend.

BROKER MOVES

• ARN Media downgraded to Sell from Neutral; target cut to $0.51 from $0.65 (UBS)

• Auckland International Airport upgraded to Neutral from Sell; target up to NZ$7.95 from $7.75 (UBS)

• Bank of Queensland upgraded to Hold; target up to $6.18 from $5.24 (Morgans) 

• Eagers downgraded to Hold from Buy; target cut to $11 from $11.70 (Cannacord)

• IPH upgraded to Overweight from Neutral; target up to $7.25 from $7 (JPMorgan)

• Megaport downgraded to Neutral from Buy; target cut to $10.15 from $15.85 (UBS)

• Peter Warren Automotive upgraded to Neutral from Sell; target remains $1.70 (Citi)

• Sonic Healthcare upgraded to Outperform from Hold; target up to $29.70 from $26.10 (CLSA)

• Sonic Healthcare downgraded to Neutral from Buy; target $29.70 (UBS)

• Stockland upgraded to Outperform from Hold; target up to $5.04 from $4.48 (CLSA)

• Super Retail Group downgraded to Neutral from Buy; target up to $18 from $15 (UBS)

• Super Retail Group downgraded to Hold from Outperform; target up to $17.50 from $15.50 (CLSA)

• Regis Resources downgraded to Sell from Neutral; target cut to $1.55 from $1.75 (UBS)

• Universal Store upgraded to Outperform from Neutral; target up to $7.80 from $6.30 (Macquarie)

Stocks trading ex-dividend: 

• Fri 23 Aug: Amotiv (AOV) – $0.22, Lendlease (LLC) – $0.095, Vicinity Centre (VCX) – $0.059, Insignia Communities (INA) – $0.06, SRG Global (SRG) – $0.025

• Mon 26 Aug: Aurizon (AZJ) – $0.07, Challenger (CGF) – $0.135, Netwealth (NWL) – $0.14, Ansell (ANN) – $0.328, Domino’s Pizza (DMP) – $0.504, Step One Clothing (STP) – $0.028, Hansen Technologies (HSN) – $0.05, Santos (STO) – $0.193, Shape Australia (SHA) – $0.09

• Tue 27 Aug: Coronado Global (CRN) – $0.005, AGL Energy (AGL) – $0.35, Contract Energy (CEN) – $0.206, AGL Energy (AGL) – $0.35, Deterra Royalties (DRR) – $0.144, Humm (HUM) – $0.013, HMC Capital (HMC) – $0.06

• Wed 28 Aug: Fiducian Group (FID) – $0.211, Telstra (TLS) – $0.09, Treasury Wine (TWE) – $0.19, Bell Financial Group (BFG) – $0.04, Ooh!Media (OML) – $0.018, The Lottery Corp (TLC) – $0.105

• 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 

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None  

• Earnings: Abacus Group (ABG), Cobram Estate (CBO), Coast Entertainment (CEH), Gold Road (GOR), Inghams (ING), Jumbo Interactive (JIN), Latitude (LFS), Mayne Pharma (MYX), Paladin Energy (PDN), Playside Studios (PLY), Polynovo (PNV), Supply Network (SNL), Weebit Nano (WBT)

• AGMs: None

Economic calendar (AEST):

• 9:30 am: Japan Inflation (Jul)

• 12:00 am: Fed Chair Powell Speech