Morning Wrap: ASX 200 to rise, S&P 500 higher after inflation report + Telstra, Cochlear results

Major US benchmarks ticked higher after a largely in-line CPI report, several high-profile companies are due to report today including Goodman Group, Origin Energy and Telstra.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 ticks higher in a relatively choppy session (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks ticked higher and finished near best levels

• Today’s big story – US July CPI report was largely in-line with market expectations, reaffirmed well-documented disinflationary trends and upcoming Fed rate cut expectations

• Market currently pricing in 63% likelihood of a 25 bp cut or 37% chance of a 50 bp cut at the Fed’s September meeting

• Attention has shifted to upcoming catalysts including tomorrow’s US July retail sales and Walmart earnings as well as Powell’s Jackson Hole speech on 23-Aug

• Investors see better AI opportunities with shares less frothy after selloff (Bloomberg)

• Investors plough back into US megacap fund dominated by tech (Bloomberg)

• Japan retail investors bet on further yen rally (Bloomberg)

STOCKS

• Mars expected to announce US$30bn deal for Kellanova (Bloomberg)

• Apple supplier Foxconn quarterly profit jumps 6%, driven by a boom in demand for AI servers (Reuters)

• UBS posts US$1.1bn net profit in Q2, more than double the market forecast but faces higher capital rules under new Swiss plan (Reuters)

CENTRAL BANKS

• RBNZ cuts interest rates by 25 bps with inflation on track to return to target (Bloomberg)

• Two more BoE rate cuts fully priced-in this year after July UK CPI data (Bloomberg)

POLITICS & GEOPOLITICS

• Ukraine launches war's largest drone attack on Russian airfields (FT)

• Russia withdrawing some forces from Ukraine, US officials say (Axios)

ECONOMY

• US July CPI – Headline CPI of 2.9% below 3.0% consensus, down from 3.0% in prior month and the lowest since March 2021. Shelter inflation rose 0.4% month-on-month, account for 90% of the increase, which also pushed core services inflation up 0.3% or the highest since April

• UK inflation cools to 2.2% in July vs. 2.3% consensus (Bloomberg)

• South Korea unemployment rate fell to eight-month low (Reuters)

• WHO declares mpox outbreak in Africa a global health emergency (Bloomberg)

ASX TODAY

• Cochlear FY24 results, underlying net profit up 27% (COH)

• Goodman Group FY24 results and FY25 guidance (GMG)

• NWH FY24 results, with 15.9% EBITDA growth (NWH)

• Origin Energy FY24 results, net profit up 32% (ORG)

• Perseus Mining acquires 13.82% stake in Predictive Discovery but notes no current intention to acquire control or make a takeover offer (PRU)

• Pilbara Minerals to acquire Latin Resources (PLS)

• Telstra FY24 results, continues to deliver underlying growth (TLS)

• Treasury Wine 2024 results, statutory net profits down 61% reflecting impairments (TWE)

WHAT TO WATCH TODAY

Here are some consensus numbers around today's reporters:

• Cochlear – Results came out pretty early this morning. FY24 underlying profit up 27% to $387m but 4.2% below Macquarie estimates. FY25 guidance also 8.9% miss at the midpoint. You'd expect a bit of downward pressure on COH.

• Goodman Group – Consensus looking for FY24 OPES of $1.07 and $2.2bn operating profit. GMG has also guided to FY DPS of 30 cents per share.

• Origin Energy – Consensus looking for FY24 underlying NPAT of $1.23bn. Citi analysts expecting full-year dividend of 47.5 cents per share.

• Treasury Wine – Consensus expecting FY24 revenue of $2.76bn, EBITS of $660m and underlying NPAT of $660m.

BROKER MOVES

• AGL Energy upgraded to Overweight from Equal-weight; target up to $12.88 from $10.00 (Morgan Stanley)

• Charter Hall Social Infrastructure REIT upgraded to Buy from Hold but target cut to $2.84 from $2.95 (Canaccord)

• Dexus Industria REIT upgraded to Hold from Sell; target remains $2.80 (Bell Potter)

• Lifestyle Communities upgraded to Buy from Neutral but target cut to $10.40 from $10.97 (UBS)

• Pro Medicus downgraded to Neutral from Overweight; target increased to $130 from $104 (JPMorgan)

• Pro Medicus downgraded to Neutral from Positive; target increased to $154.34 from $152.68 (E&P)

• Seven Group Holdings upgraded to Outperform from Neutral; target up to $43.90 from $42.10 (Macquarie)

• Sims upgraded to Overweight from Neutral but target cut to $11.90 from $12.10 (Jarden)

Stocks trading ex-dividend: 

• Thu 15 Aug: Kovest (KOV) – $0.40, Reckon (RKN) – $0.025, Pacific Smiles (PSQ) – $0.07, Rio  Tinto (RIO) – $2.70, Scentre Group (SCG) – $0.08, Dicker Data (DDR) – $0.11

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

• Mon 19 Aug: Seven Group (SVW) – $0.30, Ryder Capital (RYD) – $0.05, Euroz Hartleys (EZL) – $0.03

• Tue 20 Aug: Computershare (CPU) – $0.42

• Wed 21 Aug: AMP (AMP) – $0.02

Other ASX corporate actions today: 

• Dividends paid: None

• Listing: None  

• Earnings: Centuria Office REIT (COF), Cochlear (COH), Cleanaway Waste (CWY), Goodman Group (GMG), Magellan Financial (MFG), NRW Holdings (NWH), Origin Energy (ORG), Telstra (TLS), Treasury Wine Estate (TWE) 

• AGMs: None

Economic calendar (AEST):

• 9:50 am: Japan GDP (Q2)

• 11:30 am: Australia Unemployment Rate (Jul)

• 12:00 pm: China House Price Index (Jul)

• 12:00 pm: China Industrial Production, Retail Sales, Fixed Asset Investment (Jul)

• 12:00 pm: China Unemployment Rate (Jul)

• 4:00 pm: UK GDP (Q2)

• 10:30 pm: US Retail Sales (Jul)