Morning Wrap: ASX 200 to rise, S&P 500 slips on weak economic data + REA Group, Pinnacle FY25 results

ASX 200 futures are up 11pts (+0.12%) as of 8:30 am AEST.

In a nutshell:

• Major US benchmarks opened higher, but most faded early gains to close around lows

• US July ISM manufacturing PMI well-below estimates, with new orders weak and prices paid index accelerating

• FY25 results from Pinnacle Investment Management, BWP Trust, REA Group and more

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gave back early gains to close a little off worst levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks mostly lower, faded early gains to closer lower and near worst levels

• Today’s big story: US July ISM services was much softer-than-expected, with weak new orders, higher prices and respondents flagging tariff-cost headwinds

• Cash-and-scrip M&A deals becoming more common given healthy corporate free cash flows vs. high debt costs (RT)

• July sets buyback records for monthly (~$166bn) and year-to-date ($926bn) (BBG)

• Poor demand for today's $58bn auction of three-year notes, ahead of $42bn in 10s for sale tomorrow (BBG)

• European stocks that miss earnings estimates punished the most in decades, says Goldman Sachs (BBG)

STOCKS

• Palantir tops earnings estimates, upgrades revenue guidance highlighting role of AI in fueling growth (BBG)

• Broadcom unveils chip that can connect several smaller data centers to create one big system for developing AI models (BBG)

• Novo Nordisk faces class action lawsuit from investors alleging the company misleading growth forecasts and competition risks (RT)

• Hims & Hers shares fell tumble after missing Q2 revenue estimates of $545m, below $552m expected (BBG)

• BP will review its portfolio, cut costs further to improve performance, reporting strong Q2 earnings, dividend increase (BBG)

• Hugo Boss reports 15% rise in quarterly operating profit, aided by cost measures, despite weak consumer sentiment (RT)

• Japan's five major banks saw record profits in June quarter as rate hikes widened domestic yield spreads (NK)

TARIFFS

• EU and US close to agreeing on a final joint statement for their all-inclusive 15% trade deal, with discussions on steel a sticking point due to volume (RT)

• Switzerland presenting Washington with a counter offer but unclear whether this will move the needle in time for Thursday implementation (NYT)

• Trump says US to initially impose 'small tariff' on pharma imports that could eventually spike to 250% (CNBC)

• Trump says he will substantially raise tariffs on India for not ceasing purchases of Russian oil (BBG)

CENTRAL BANKS

• Fed Daly says time is nearing for Fed rate cuts, believes every meeting going forward should be viewed as a live meeting to think about policy adjustments (RT)

ECONOMY

• US July ISM Services PMI was 50.1, well-below consensus of 51.4, new orders index slumped (but still barely in expansion territory), prices index increased to highest since Oct-22 (BBG)

• China July services PMI unexpectedly accelerates to 52.6 vs. 50.4 estimates, the fastest pace in over a year (BBG)

• South Korea inflation slows in-line with expectations to 2.1% in July, supporting rate cut expectations (BBG)

ASX TODAY

Check out our Live Blog for the latest coverage and analysis for company announcements, market movements and economic updates.

• NSW government delays plans to restrict cash use from $5,000 to $1,000 per day, change will now take place in August 2027 (AFR)

• Qoria 155m share block trade crosses at 62 cents, representing ~12% of the company, Perth-based family office McCusker holdings understood to be the seller (AFR)

WHAT TO WATCH TODAY

• News Corp: Reported Q4 revenue of $2.11bn and EPS of 19 cents (vs. $2.09bn and 19 cents ests), last month the board authorised a new $1bn stock repurchase program and expects to execute accelerate repurchase shortly.

• Pinnacle Investment Management: Reported FY25 after hours on Tuesday, with NPAT of $134.4m vs. $134.2m ests, final dividend of 27 cents per share. At a glance, most numbers are in-line or slightly ahead of analyst expectations. Stock is trading ~11% off previous result levels (Feb-25).

• REA Group: FY25 NPAT up 23% to $564m vs. $566m ests, full-year dividend of $2.48 per share vs. Macquarie estimates of $2.34, says 1Q26 listings to be lower due to strong comparables, expects national resi buy listing volumes to be broadly in-line with last year. At a glance, a bit of a mixed result.

BROKER MOVES

• Block downgraded to Equal-weight from Overweight; target remains US$73 (MS)

Stocks trading ex-dividend: 

• Wed 6 Aug: None

• Thu 7 Aug: Djerriwarrh Investments (DJW) – $0.083

• Fri 8 Aug: Amcil (AMH) – $0.055, Argo Investments (ARG) – $0.20 

Other ASX corporate actions today: 

• Dividends paid: AVJennings (AVJ), Finbar Group (FRI) 

• Earnings: BWP Trust (BWP), Centuria Industrial REIT (CIP), Charter Hall Long WALE REIT (CLW), Pinnacle Investment Management (PNI), REA Group (REA) 

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 9:00 am: Australia AI Group Industry Index (Jul)