Morning Wrap: ASX 200 to rise, S&P 500 soars + Amcor, ASX and Domain results

Major US benchmarks soared on solid corporate earnings (Costco, Walmart), US retail sales growth for July more than tripled consensus expectations, China's home prices continue to spiral lower, copper prices bounce as soft-landing expectations recover plus a handful of full-year results from names like Amcor and GQG Partners.

Let's dive in.

S&P 500 SESSION CHART

S&P 500 gaps up, rallies intraday and closes at best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks rallied and finished near best levels

• S&P 500 and Nasdaq higher for sixth consecutive session

• S&P 500 at highest since 22-July, now fully recouped last week’s losses and within 2% of all-time highs

• Big Tech all higher, led by Tesla (+6.3%), Amazon (+4.4%) and Nvidia (+4.0%)

• Today’s big story – More soft landing optimism after US July retail sales data more than doubled consensus expectations, initial jobless claims data pushed back against growth concerns and solid earnings takeaway from names like Walmart, Costco

• Goldman's share buybacks unit saw surge in corporate share repurchases (Bloomberg)

• Big investors wary after the market rout, expecting more turmoil in H2 (Reuters)

• Iron ore sell-off intensifies as China steel output slides 9% (Bloomberg)

STOCKS

• Walmart shares soar 6% on Q2 earnings beat, US comp growth at 4.2% ahead of 3.4% consensus, noted strong momentum in eCommerce growth, advertising and gains from upper-income households, raised full-year guidance (Reuters)

• Walmart cutting prices on 7,200 items to close price gaps with rivals (Axios)

• Alibaba missed Q1 earnings expectations, revenue fell 1% even as the number of customer purchases and purchase frequency rose double digits (Reuters)

• Cisco guides sales above expectations, to cut ~7% of workforce (Bloomberg)

• Berkshire Hathaway acquired stakes in cosmetics store chain Ulta Beauty, aircraft parts maker Heico (Reuters)

• David Tepper's Appaloosa trims Alibaba stake, sharply reduces exposure to US tech companies (Bloomberg)

CENTRAL BANKS

• Chicago Fed's Goolsbee warns of cutting too late and growing more concerned about employment (Bloomberg)

• Atlanta Fed President Bostic open to September rate cut, says central bank can't afford to be too late (FT)

• Norges Bank left rated unchanged at 4.5%, as expected (Bloomberg)

• RBNZ Governor Orr reiterates easing will be done at measured pace (Bloomberg)

POLITICS & GEOPOLITICS

• Trump promises an economic boom (FT)

• Latest polls show Harris leading or tied with Trump (Fox News)

• US and Israeli chiefs prepare for crunch talks Thursday in bid to end Gaza war (FT)

• Russia strikes back in Donetsk as Ukraine makes gains in Kursk (Politico)

ECONOMY

• US July retail sales up 1.0% month-on-month vs. 0.3% consensus, this marks the largest monthly increase since Jan-23 (Reuters)

• China activity data mostly on the softer side of expectations (Bloomberg)

• China home prices fall at quickest pace in nine years (Reuters)

• Japan's GDP rebounds more than expected amid consumer recovery (Bloomberg)

• UK Q2 GDP up 0.9% year-on-year, in-line with expectations (Bloomberg)

• Australian July jobs growth tops forecasts but unemployment rate ticks (Bloomberg)

ASX TODAY

• CBA puts its high-net-worth advice business on the auction block (AFR)

• NAB reports Q3 cash earnings of $1.75bn, down 7% year-on-year (NAB)

• PWR Holdings FY24 earnings (PWH) 

WHAT TO WATCH TODAY

Growing risk-on mood as growth fears ease plus solid earnings (both US and Aus) and decent economic data (ex-China). Our overnight ETF watchlist highlighted:

• Copper: The above factors drove copper prices 2.7% higher overnight to a two-week high. The Global X Copper Miners ETF also rallied 3.7%. This should see some strength for local names like BHP, Sandfire and smaller cos like Aeris and 29Metals.

• Lithium: Lithium stocks bounced overnight, with the VanEck Rare Earths/Strategic Metals ETF up 2.9% (but its bouncing off four year lows). That said, China's lithium carbonate prices fell 3.2% on Thursday to 72,400 yuan a tonne.

Today is a bit quiet on the results front. Here are some of the key consensus numbers to watch:

• Amcor: Reported Q4 EPS of $0.21 vs. $0.20 consensus. Q4 revenue, adjusted EBITDA and net income also 2-5% short of analyst expectations. FY guidance also a little soft

• ASX: Goldman Sachs (as of 14-Jul) is looking for FY24 EBITDA of $648.8m, net income of $481.6m and DPS of $2.11 (for full year)

• Domain: Macquarie (as of 25-Jul) is forecasting FY24 EBITDA of $137m with listings growth of 3% (as per guidance of 2-3%). Also looking at FY DPS of 6 cps.

BROKER MOVES

• Centuria Office downgraded to Sell from Neutral; target cut to $1.10 from $1.19 (UBS)

• Fortescue upgraded to Buy from Neutral; target $21 (Citi)

• Magellan downgraded to Neutral from Buy; target up to $10.80 from $10.50 (UBS)

• NRW upgraded to Buy from Overweight; target up to $3.85 from $3.20 (Jarden)

• Origin Energy downgraded to Neutral from Outperform; target cut to $10.12 from $10.74 (Macquarie)

• Origin Energy downgraded to Underweight from Equal-weight; target cut to $8.86 from $10.00 (Morgan Stanley)

Stocks trading ex-dividend: 

• 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

• Thu 22 Aug: JB Hi-Fi (JBH) – $1.83

Other ASX corporate actions today: 

• Dividends paid: Centuria Office REIT (COF) – $0.03, Cromwell Property Group (CMW) – $0.0075

• Listing: None  

• Earnings: Amcor (AMC), ASX (ASX), Charter Hall Retail REIT (CQR), Domain (DHG), GQG Partners (GQG)

• AGMs: None

Economic calendar (AEST):

• 4:00 pm: UK Retail Sales (Jul)

• 10:30 pm: US Building Permits (Jul)

• 12:00 am: US Consumer Confidence (Aug)