Morning Wrap: ASX 200 to rise, S&P 500 within 1% of all-time highs + Megaport, Medibank earnings

I made a little typo yesterday – Futures and the percent change were both supposed to be up. Apologies for the inconvenience.

The market is being blasted by FY24 results this morning. So without further ado ...

Let's dive in.

S&P 500 SESSION CHART

S&P 500 higher, finished near best levels (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks finished higher and closed near best levels

• S&P 500 within 1% of all-time highs while the Equal-weight S&P finished at record levels

• A relatively quiet session from a headline perspective – with several upcoming catalysts including global flash PMIs, Powell’s speech and Nvidia earnings next week

• US Dollar Index is on a four-day losing streak, lowest since Dec-23

• Oil prices fall as massive downward US employment revision, Middle East updates overshadow crude draw (Refuters)

• Over US$90bn flows into US money market funds in bid to lock in higher yields before Fed makes first rate cut next month (FT)

• Nikkei seen reclaiming record high by end-2024 amid cheaper valuations, low interest rates and corporate reforms (Reuters)

STOCKS

• Target shares soar after Q2 EPS beat consensus by 18% on better gross margin performance, raised full-year EPS guidance, noted growth was entirely driven by traffic in stores and digital channels (CNBC)

• Ford announces changes to EV strategy, with will focus on hybrids and electric commercial vehicles (CNBC)

• LVMH-owned Sephora announces cuts to China workforce amid weak demand (Reuters)

CENTRAL BANKS

• July FOMC Minutes reveal “several” officials seeing the case for a 25 bp cut in July, while vast majority saw September cut as likely appropriate (Fed)

• Fed's Bowman reiterates her recommendation for patience on rate shifts (Reuters)

• Bank of Korea expected to hold today amid household debt risks (Bloomberg)

• BOJ to raise rates again by end-year, according to more than half of economists surveyed in new poll (Reuters)

POLITICS & GEOPOLITICS

• Blinken leaves Middle East having failed to secure ceasefire agreement between Israel and Hamas (Bloomberg)

• Israeli defence minister announces defeat of Hamas' Rafah brigade (Jerusalem Post)

• Biden to speak with Netanyahu Wednesday on Gaza truce deal (Reuters)

ECONOMY

• US nonfarm payroll growth revised down by 818,000 or 30% less than initial reports, this was the largest revision since 2009 (Bloomberg)

• Chinese exports of critical minerals are returning to more normal levels (Bloomberg)

• Japan export growth quickens, in sign of sustained economic recovery (Bloomberg)

ASX TODAY

Today is even busier than Wednesday. You can view all announcements via our ASX announcements page.

• New aged care funding model agreed in-principle by major parties (AFR)

• Orora sales talk continue after Lone Star’s offer (The Aus)

WHAT TO WATCH TODAY

A few results have already dropped this morning. Here's how they compare vs. consensus.

• Insignia Financial: FY24 underlying net profit of $216.6m vs. $215.2m consensus. Paused final dividend to enhance balance sheet (market was expecting 10 cents). Will be interesting to see if the stock gets punished for this.

• Medibank: FY24 underlying net profit of $570.4m vs. $572m consensus. Most metrics including revenue and dividends in-line with market expectations.

• Northern Star: FY24 underlying net profit of $689m ahead of $669m consensus. Most metrics were marginally ahead of analyst expectations (e.g. total dividend for FY24 was 40 cents per share vs. Goldman estimates of 39.5 cents)

• Super Retail Group: FY24 results largely in-line with market expectations. Net profit of $242.1m vs. $242.8m consensus. Declared special dividend of 50 cents per share. Big surprise (total FY24 dividend up to 119 cents vs. Macquarie expectations of just 68.5 cents)

BROKER MOVES

• Brambles upgraded to Hold from Underperform; target $16.58 from $13.14 (Jefferies)

• Breville downgraded to Neutral from Buy; target up to $32.70 from $28.30 (UBS)

• Charter Hall downgraded to Sell from Neutral; target up to $12.80 from $11.93 (UBS)

• Cleanaway downgraded to Hold from Add; target cut to $2.83 from $3.02 (Morgans)

• Data#3 downgraded to Market-weight from Overweight; target up to $9.23 from $9.12 (Wilsons)

• Domino's upgraded to Neutral; target up to $34 from $33.50 (JPMorgan)

• Fletcher downgraded to Neutral from Overweight; target cut to NZ$3.25 (JPMorgan)

• Helia downgraded to Neutral from Outperform; target cut to $3.8 from $3.9 (Macquarie)

• Lottery Corp upgraded to Overweight from Neutral; target up to $5.30 from $5.10 (JPMorgan)

• Lynas upgraded to Buy from Hold; target up to $7.15 from $6.25 (Canaccord) 

• Southern Cross Electrical Engineering downgraded to Hold from Buy; target increased to $1.95 from $1.80 (Argonaut Securities)

• WiseTech upgraded to Overweight from Neutral; target up to $123 from $87 (JPMorgan)

• WiseTech downgraded to Hold from Outperform; target up to $117 from $115 (CLSA)

Stocks trading ex-dividend: 

• Thu 22 Aug: JB Hi-Fi (JBH) – $1.83, Domain (DHG) – $0.04, Suncorp (SUN) – $0.44, Mystate (MYS) – $0.115, GWA Group (GWA) – $0.08

• Fri 23 Aug: Amotiv (AOV) – $0.22, Lendlease (LLC) – $0.095

• Mon 26 Aug: Aurizon (AZJ) – $0.07, Challenger (CGF) – $0.135, Netwealth (NWL) – $0.14

• Tue 27 Aug: Coronado Global (CRN) – $0.005, AGL Energy (AGL) – $0.35, Contract Energy (CEN) – $0.206

• 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, REA Group (REA) – $1.02, Beach Energy (BPT) – $0.02, Evolution Mining (EVN) – $0.05

Other ASX corporate actions today: 

• Dividends paid: Mayfield Group (MYG) – $0.02, Centuria Capital (CNI) – $0.05, Dexus Industria REIT (DXI) – $).04, Dexus Convenience Retail REIT (DXC) – $0.05, HomeCo Daily Needs (HDN) – $0.02, HealthCo Healthcare and Wellness REIT (HCW) – $0.02

• Listing: None  

• Earnings: Eagers Automotive  (APE), Codan (CDA), Centuria Capital (CNI), Dug Technology (DUG), G8 Education (GEM), Insignia Financial (IFL), IPH (IPH), MA Financial (MAF), Megaport (MP1), Medibank (MPL), Nanosonics (NAN), Northern Star (NST), Qube (QUB), Redox (RDX), Stockland (SGP), Super Retail Group (SUL), Whitehaven Coal (WHC)

• AGMs: Xero (XRO), Ifratil (IFT) 

Economic calendar (AEST):

• 9:00 am: Australia Manufacturing and Services PMI (Aug)