ASX News LIVE | ASX Opens Flat; Wall St Climbs on ‘Trump Trade’

The Australian stock market ended its three-day winning streak today, with the ASX 200 closing just below the 8000-point mark at 7999.3, down -0.2%.

Mining stocks led the decline, with the materials sector falling -0.9%, while real estate was the only sector to show significant gains, up +0.8%.

Despite positive sentiment from Wall Street regarding potential rate cuts coming soon, the ASX failed to maintain momentum as Chinese data told a more bearish story.

Chinese GDP data yesterday showed Q2 growth of 4.7%, below the expected 5.1%.

This economic slowdown impacted commodity prices, with iron ore futures dipping in Singapore trading.

BHP, dropped -1.4% to $43.01 while FMG held gains, up +0.36%, Rio Tinto fell -2.52% to $117.11. Consumer discretionary, utilities, and technology stocks also retreated after Monday’s gains.

KPMG Australia announced today it will discontinue its commercial law practice as part of a broader restructuring effort. The firm said it plans to instead concentrate on expanding its tax services.

The restructuring is expected to result in around 30 job cuts, effective September 30. This follows an earlier $80 million cost-cutting initiative announced last month, which primarily affected the consulting division.

KPMG’s decision to narrow its focus seems to contradict the trend of other law firms expanding their services to become one-stop shops for clients.

Ben Travers, national managing partner of KPMG’s Tax and Legal division, said today:

‘We will now look to further develop alliances with law firms that offer complementary services to ours rather than invest in our own commercial law business.’

The company cited changing client demands as the reason for this strategic shift. This move comes amid similar restructuring efforts by other major professional services firms, including EY, Deloitte, and PwC.

DroneShield’s [ASX:DRO] stock has resumed trading but remains down nearly 30% following a media report that may have triggered today’s sudden sell-off.

The defence tech developer’s share price plunged unexpectedly around midday, forcing a trading halt after a nearly 30% drop.

In response to queries from the stock exchange, DroneShield cited a recent media article in Capital Brief that questioned the sustainability of the company’s impressive 500% stock rally over the past year.

The report also mentions the beginning of many short positions by veteran traders who are expecting a ‘return to normalcy’ for the stock.

Upon reinstatement of trading, shares were trading 17.8% lower at $2.13.

Here is an interesting chart from Commonwealth Bank that is worth a look.

Annual job growth outside non-market employment (which is made up of health care, education, public admin etc.) is at one of its lowest levels.

Yet jobs growth in aggregate is higher than pre-pandemic levels.

It seems all the jobs in the market sector have dried up while government spending is keeping the non-market sector ticking.

Source: CBA

Here is another way to look at it: look at the jobs within health and social assistance compared to total ex. health.

Source: CBA

Mining company IGO [ASX:IGO] has revealed substantial write-downs totalling over $250 million following a review of its operations. The impairments primarily affect the company’s exploration assets.

IGO anticipates impairment charges ranging from $275 million to $295 million for the full fiscal year.

In a statement, the company said:

‘The impairment relates to the revaluation of the Silver Knight and Mt Goode nickel exploration assets as well as the broader exploration portfolio rationalisation.’

These non-cash impairments will be reflected in IGO’s financial year 2024 results, scheduled for release on August 29.

This announcement comes in the wake of IGO’s decision to cease operations at its troubled Cosmos nickel project in WA.

The closure is part of a broader trend of job losses in the sector, which is currently struggling with an oversupply of nickel due to cheap Indonesian production flooding the market.

Wealth management platform HUB24 [ASX:HUB] is up by +2.82% at $47.74 per share after its latest market update.

The company reported solid financial results for the fourth quarter of the fiscal year, with HUB attracting a staggering $5 billion in inflows, marking a new record for the period.

A large portion of this growth came from a $1.8 billion transfer of funds from Equity Trustees. As of June 30, 2024, HUB24’s funds under administration reached $104.7 billion, a 30% increase compared to the same period last year.

The company recorded total inflows of $15.8 billion for the entire fiscal year, surpassing the previous year’s figure by 62%.

Source: HUB 24 – Market update 16-07-24

In the latest available Plan for Life data, the company said HUB24 ranked first for quarterly and annual net inflows and had the largest quarterly and annual organic market share gains of all platform providers.

HUB24’s market share increased to 7.3% (up from 6.1% as at 31 March 2023) and is ranked in seventh place overall.

Good morning. Charlie here,

The ASX 200 opened flat near yesterday’s record high of 8,000 points, with miners’ declines offsetting modest gains elsewhere. Materials stocks fell ~1%, while financials saw small increases this morning.

Overnight, The Fed’s J Powell expressed confidence in cooling inflation, and Goldman suggested conditions were favorable for easing, helping spur rising risk-on bets under a potential Trump presidency.

Trump Media & Technology Group surged 31% following the assassination attempt on Donald Trump, which is being viewed as potentially beneficial for his campaign.

Trump also named J.D. Vance as his running mate, causing US benchmarks to pare gains and crypto to boom as he is seen as a pro-cryptocurrency candidate.

Markets have priced in two quarter-point rate cuts for 2024, with a 60% chance of a third. Wall saw the S&P 500 and Dow Jones reaching new highs.

Stock movements to watch today on the ASX include Rio Tinto’s Simandou project approval, IGO’s asset write-downs, HUB24‘s record inflows, and Electric Optic Systems‘ revenue surge.