ASX News LIVE | ASX to Rise as J Powell Confirms Cuts; Perpetual’s Flags $550m Write down

Australian shares ended the first session of the week higher after the US Federal Reserve chairman declared that the much-anticipated interest rate cuts are finally close at hand.

The ASX 200 closed up by +0.76% to 8.048.5 points, placing it within 100 points of the record high touched earlier this month. The rate-sensitive real estate and banking sectors are among the best performing, up 1%.

Telecoms were today’s top performer thanks to strong earnings from NZ-based Chorus, which gained nearly 10% today.

Over the weekend, Jerome Powell provided his firmest assurance yet that the central bank had successfully contained inflation, telling the annual Jackson Hole, Wyoming economics symposium that ‘the time has come for policy to adjust’.

That sent the Australian dollar rallying near US68 cents as the greenback slumped.

Uranium stocks, Deep Yellow, Paladin Energy and Boss Energy are among top performers today, rallying after the world’s largest producer, Kazatomprom, released weaker guidance over the weekend.

Energy stocks are also on the rise as the Middle East braces for escalating conflict after an Israeli strike on Hezbollah in Lebanon.

NIB Holdings [ASX:] has seen its shares plummet by -17.15% in trading today with the current price at $6.04 per share.

The fall came despite a substantial increase in net profit, which hit $181.6 million, that’s a 67.4% jump from the previous year.

Group revenue also rose healthy, climbing 9.3% to $3.3 billion. The company experienced a 6.7% increase in group claims, which totalled $2.5 billion for the period. Net investment income contributed $61.7 million to pre-tax earnings, marking a 12.8% improvement.

What seems to have spurred the selloff today was the guidance misses across the board.

Citi analyst Nigel Pittaway emphasised that the company’s 2.5% policyholder expansion was below the 3% to 4% guidance. While, NIB’s underlying operating profit for FY24 fell 5% short of expectations.

Chief Executive Mark Fitzgibbon said:

‘Although a number of macroeconomic and cost of living factors suggest a level of caution, the outlook across the group, on balance, remains optimistic.’

The company declared a second-half dividend of 14 cents per share fully franked, resulting in a full-year dividend of 29 cents.

Major wealth management firm Perpetual [ASX:PPT] faces a significant write-down in fair value losses for FY2024 due to significant outflows.

The company reported $12 billion in withdrawals from J O Hambro and TSW-managed strategies.

Those withdraws have pushed the company to write down $547 million in non-cash impairments for its upcoming financial report.

The company said in its FY24 results summary today:

‘In a period of broader macroeconomic and geopolitical uncertainty and change, the Board sees a growing need for high quality investments and a reliable income stream from its shareholders. We believe our careful management of the Company’s capital position aligns with the interests of our shareholders.’

As a result, Perpetual’s stock is down by nearly 3% to $20.31 per share. That puts its 12-month return at -7.85%.

Here, I want to welcome you to our new Fat Tail Daily video series.

We’ve heard that you want more discussions with editors about market movements and their thoughts — and we’ve listened!

Publisher James ‘Woody’ Woodburn will be sitting down with our Fat Tail Daily editors to discuss the key trends and offer unique insights into market movements.

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If you have any thoughts about the length, format, or any topics you would like discussed, send us an email at support@fattail.com.au with the subject header: ‘Fat Tail Daily Video Feedback’.

Thanks, and enjoy today’s discussion with Crypto Capital and Alpha Tech Trader Editor Ryan Dinse.

The ASX 200 is up by +0.56%, trading at 8,069 at midday as markets climb on the back of confirmed cuts by J Powell in the upcoming September FOMC meeting for the Fed.

With cuts that markets have expected for much of the year finally given the green light, the movement for the start of this week is likely positive.

The move also increased the Australian dollar, now around US68 cents, as the greenback fell.

On the ASX, 9 of the 11 sectors are in the green, with only Health Care (-0.35%) and Staples (-0.85%) falling so far today.

Earnings reports largely drove those moves, as Endeavour Group sits down by -5.8% after its weaker report showed net profits after tax down 4.3%, while sales grew only +3.1%.

Uranium stocks Deep Yellow, Paladin Energy and Boss Energy are among the top performers this morning, rallying after the world’s largest producer, Kazatomprom, released guidance that fell short of market expectations over the weekend.

Energy stocks are also on the rise as the Middle East braced for further conflict after an Israeli strike on Hezbollah in Lebanon.

The crypto market is abuzz as the Bitcoin Fear and Greed Index tips into ‘Greed’ territory, fueled by growing anticipation of potential interest rate cuts by the Federal Reserve this September.

After spending almost all of August deep in ‘Fear’ territory, the market seems hopeful again, with cuts coming.

On top of that, continued interest from major financial institutions in the crypto sector has also bolstered overall confidence.

This shift in sentiment reflects the historical bullishness of looser monetary policy on risk assets, including cryptocurrencies.

Gold has seen similar shifts recently, with the spot price trading near all-time highs as expectations of rate cuts make gold preferable over bonds once rates drop.

But could the interest in these two assets also signal other concerns?

Market instability and inflation concerns are still very much present within global economies, and a quick return after recent sell-offs could be papering over larger problem.

Editor Murry Dawes thinks it’s time for a coming SHAKEOUT of global markets and has been finding a position to put investors in the best place to ride the volatility.

At 7 pm tonight, he will reveal his three top stocks to take advantage of these moves.

CLICK HERE to learn more about the potential threats and the steps you need to take to protect what’s precious to you.

Lithium miner Pilbara Minerals [ASX:PLS] has reported its FY24 results today, showing an 89% fall in profits to $257 million. That’s down from $2.39 billion last year as lithium prices continue to slide.

Revenue fell 69% to $1.2 billion for the 12 months to the end of June, despite its production increasing 17% over the same period.

The major factor was the lower realised prices for spodumene concentrate with an average realised price of around US$1,176.

The company’s cash balance also took a large hit, falling 51% to $1.62 billion, down from $3.33 billion.

Pilbara Minerals CEO, Dale Henderson said:

‘Pilbara Minerals delivered a strong set of results in the 2024 financial year, reinforcing our position as a global leader in lithium production through the disciplined execution of our strategic plan.’

 

‘Despite the challenges posed by a softer lithium pricing environment, Pilbara Minerals maintained a robust EBITDA margin of 43%, a testament to the strong operational performance and disciplined cost management of the team.’

Shares in Pilbara are up by 1% heading towards noon, as investors look beyond the current weakness to bet on a resurging lithium market.

Bendigo & Adelaide Bank [ASX:BEN] has reported a decline in cash profits, with a 2.6% drop to $562 million, as increased competition in the mortgage market impacted the bottom line.

The bank’s net interest margins, a key indicator of profitability, decreased by 4 basis points to 1.9% for the year ending June 30.

However, the last six months of the financial year saw some stability at 1.94%, mirroring similar trends observed in larger competitors.

Marnie Banker, the outgoing chief executive, emphasised the bank’s efforts to streamline operations across brands, systems, and processes to enhance competitiveness.

‘These full year results demonstrate the strength, capability and differentiation of our Bank. We remain as focused as ever on delivering sustainable growth over the long term, sequencing our investments in key growth areas to leverage the strong pipeline of demand for our products and continue to improve shareholder returns.’

Customer deposits saw a 3.4% increase over the year, bolstered by digital deposit channels and the bank’s established deposit franchise, with Community Banks experiencing an 8.3% growth in deposits.

90-day arrears rose by 8 basis points due to prolonged higher interest rates; however, Ms Baker assured shareholders that overall asset quality remained stable. She noted that 40% of home loan customers were a year ahead in repayments, with over 85% maintaining a financial buffer.

The bank declared a final dividend of 33¢ per share, bringing the full-year dividend to 63¢ per share.

Shares are currently down by -2.82%, trading at $12.05 per share.

Good morning. Charlie here.

The ASX 200 opened up by +0.27% to 8,045.8 as Wall Street closed near all-time highs on Friday as hopes of a soft landing were rekindled for the US.

Fed Chair J Powell’s Jackson Hole speech confirmed to the market that the ‘time has come’ to cut interest rates in the US.

With this speech behind us, the markets are set for a green day today amid a busy earnings season.

Closer to Australia, negative retail sales data from New Zealand could mean a potential triple-dip recession in our neighbour.

Commodity prices are recovering as fears of a hard landing ‘recession’ have eased for now, although markets will likely remember the start of this month for any signs of weakness.

Iron ore futures, gold and crude oil are all climbing in this morning’s session as hopes of global demand climbing come through.

On the ASX today, we have earning reports from Kogan, Pilbara Minerals, Bendigo & Adelaide Bank, Perpetual, Star Entertainment, Viva Energy, Endeavour Group, NIB Holdings, and Chorus.

Looking ahead this week, we have:

Wednesday: Australia – July CPI indicator, Q2 construction work

US – Nvidia earnings results

Thursday: Australia – Q2 Building capex

Friday: Australia – July retail sales, private sector credit

US – PCE and core inflation

Europe- CPI