Investment Ideas From the Edge of the Bell Curve
The ASX surged today, driven by a strong rally in interest-sensitive technology and property stocks, as investors prepared for a week filled with big central bank policy decisions.
The ASX 200 closed up 0.86% to 7,989.6, with all 11 sectors in the green. This followed a strong rebound on Wall Street last Friday, fueled by inflation data that strengthened expectations of the Fed lowering interest rates later in the year. The All Ordinaries index also saw an increase of 0.9%.
On the ASX, technology stocks emerged as the top performers, rising 1.5%. Notable gainers included WiseTech, which climbed 2.2% to $95.46, and Xero, which was up 1.2%to $134.14.
Property stocks also saw good gains, with Goodman Group rising 2.1% to $35.23 and Vicinity Centres adding 1.2% to reach $2.04.
On the wider benchmark, Star Entertainment was a notable gainer today, adding 14.7% to trade at 58.5 cents, while Fletcher Building fell nearly 6% after trouble with a cement transport ship scuttled its share price.
While today’s session remained pretty stable, we expect higher volatility later in the week with a raft of earnings and central bank announcements. Traders here are bracing themselves for the next quarterly inflation data, due Wednesday, which should give a clearer picture of the RBA’s next move.
Adore Beauty [ASX:ABY] has also seen its shares swing throughout trading today.
Initially, the stock fell by nearly 3% following the announcement of a new CEO.
This afternoon, it rebounded, currently trading up 2.15% at 95 cents. The online beauty retailer named Sacha Laing its new chief executive.
Laing comes to Adore Beauty with a retail background, having previously served as CEO of General Pants and in leadership roles at Country Road and David Jones.
We have a big week ahead for earnings and central banks; here are the highlights:
Monday: US results – Phillips, McDonald’s
Tuesday: Eurozone – GDP modest growth around 0.2%QoQ forecast
Australia – June Building approvals
US results – Microsoft, PayPal, BP, Merck
Wednesday: Japan – Bank of Japan rates decision, likely to be unchanged
Australia – Wednesday’s CPI inflation data, Rio Tino reports, Retail trade data
China – Official PMI (July), still weak manufacturing activity
Eurozone – CPI (July), around 2.5% YoY forecast
US results – Meta, Mastercard, Kraft Heinz, Boeing
Thursday: US – FOMC rates decision, likey unchanged but looking for signs in September
Australia – Trade Balance for June, Home prices, Resmed reports
UK – BoE rates decision, likely unchanged
US results – Amazon, Apple, Intel, Conoco Phillips, Moderna
Friday: US – Jobs and earnings data
Australia – Producer price index, Home lending data
US results – Exxon Mobil, Chevron
Peak earnings season is here. Can’t wait. 🙂🤓
1-pager schedule:
1) Tuesday AM: $PYPL $SOFI
2) Tuesday PM: $MSFT $AMD $SBUX $LMND $PINS
3) Wednesday AM: $MA
4) Wednesday PM: $META
5) Thursday PM: $AAPL $AMZN $MELI $DKNG $NET $INTC $SQMid-week reviews: $PYPL $SOFI $MSFT $MA… pic.twitter.com/ejPUu3Mfh2
— Brad Freeman (@StockMarketNerd) July 29, 2024
Mark Fitzgibbon, the long-serving CEO of NIB [ASX:NHF], has announced his retirement effective September 1.
The company has named an internal successor, Ed Close, currently the head of NIB’s Australian Residents Health Insurance division, to take over the top role.
This leadership change comes at a time when NIB has been embroiled in a contentious dispute with hospital chain St Vincent’s Health.
The conflict revolves around negotiations over rebates for surgery and hospital cover, with St Vincent’s threatening to withdraw from discussions.
This transition marks the end of an era for NIB, as Fitzgibbon’s two-decade tenure has steered it through listing and stock market crashes.
NIB shares are down by -1% this afternoon, trading at $7.16 per share.
Online retailer Kogan [ASX:KGN] has seen choppy trading today after its latest business update.
Kogan’s shares are down by 3.2% after an initial surge of over 4% earlier this morning.
The company reported its June quarter results, showing a 1.5% decrease in gross sales to $184.1 million.
Despite this decline, Kogan stated that these figures represent a ‘positive trend‘ compared to the previous three quarters.
The company’s revenue remained relatively stable at $105.6 million, while, Kogan’s gross profit increased by 1.5%, reaching $39.9 million for the quarter.
Founder and CEO of Kogan.com, Ruslan Kogan was upbeat on the slightly improved quarter, saying:
‘Cost of living pressures are driving customers to Kogan.com and we’re working harder than ever to ensure we save our customers a lot ofmoney….Having ended the financial year on a high, our team is thrilled to carry this momentum into FY25. We remain committed to consistently delivering even more remarkable value to our millions of customers every day.’
The ASX 200 has gained 0.85% to reach 7989.3 points around midday. This broad rally followed Wall Street’s rebound on inflation data, strengthening expectations for potential US Federal Reserve interest rate cuts in September.
As of noon, All 11 sectors showed positive movement, with technology and energy stocks leading the gains.
Analysts anticipate a volatile week ahead as local investors brace for local inflation data that could potentially trigger an interest rate hike from the Reserve Bank or at least an extended pause.
The release of Australia’s June quarter inflation data on Wednesday is viewed as a critical factor in determining local interest rates.
Consensus estimates predict a 1% rise in trimmed mean inflation for the quarter and a 4% year-on-year increase. Higher figures could make it challenging for the RBA to maintain the current cash rate of 4.35%.
Interest-sensitive technology stocks emerged as the top performers, rising 1.4% overall. WiseTech saw a 2.5% increase, while Xero climbed 1%.
This follows last week’s turbulent market activity, marked by big swings and heavy selling in the US tech sector, which also weighed on the ASX.
The tech sector faces further scrutiny this week as mega tech companies Amazon, Meta (Facebook), Apple, and Microsoft report their June quarter earnings. Meanwhile, Australia’s profit season kicks off with Rio Tinto’s half-year earnings report on Wednesday morning.
Pacific Smiles Group [ASX:PSQ] has seen its shares rise 2.2% in this morning’s trading following a revised acquisition proposal from Genesis Capital.
The new offer aims to acquire all shares, valuing each at $1.90. Notably, this updated proposal includes an option for Pacific Smiles shareholders to receive all or part of the consideration in scrip.
The company stated that its board and advisers are currently evaluating the new proposal but for now, maintains the recommendation of the offer from NDC BidCo, which is offering $1.91 per share, subject to certain conditions.
Regional airline REX [ASX:REX] has entered a trading halt pending a ‘significant’ announcement.
The halt comes in after a weekend report from The Australian’s Margin Call column suggesting that REX has engaged restructuring consultants from Deloitte.
The airline has recently experienced leadership changes, with former executive chair Lim Kim Hai stepping down. John Sharp, a former Howard government minister and the company’s deputy chair, has taken over the leadership role.
This trading suspension is expected to last until Wednesday or until REX issues its next statement, whichever comes first.
Fletcher Building [ASX:FBU] shares tumbled -4.8% on open following the company’s disclosure of expected losses totaling NZ$30 million (A$26.9 million) for the financial year.
The losses were blamed on operational difficulties with Fletcher Building’s Golden Bay cement business which is currently, ‘experiencing operational issues with the Marine Vessel Aotearoa Chief (MVAC)’ the update said today.
The vessel was tasked with transporting cement from Fletcher’s manufacturing facility.
This is yet more bad news for Fletcher, which has seen its share price tumble in the past 12 months due to multiple scandals and operational hiccups.
Good morning. Charlie here,
The ASX 200 is set to rise, with the ASX futures pointing to a solid rise in the morning as markets move into a risk on position after a strong lead by the US over the weekend.
On Wall St, broad gains were seen across all major benchmarks. There was still a flavour of investors rotating into small caps and cyclical over the larger names, but mega caps earnings reports are still setting the tone.
Apple and Microsoft will report their June Quarter earnings this week, as well as Aussie names entering the fray midweek, with Rio Tinto reporting on Wednesday.
New consumer and inflation data once again increased bets that interest rate cuts from the Fed are likely in September, with the US monthly inflation gauge for June rising 2.5%, slowing its pace from May’s 2.6% annualised inflation.
The latest consumer sentiment data on Friday showed that US consumer sentiment was at its lowest level in eight months as inflation and election uncertainty weakened outlooks.
Shares in UPS, the US delivery company, fell 12% last Tuesday as it missed its analyst estimates. Some saw this as a sign that the US economy and consumer spending are now slow enough, and cuts should be expected soon.
In commodities, oil prices tumbled over the weekend due to weak demand from China. Over the past week, we’ve seen WTI Crude fall more than 3%, trading around US$77.28 per barrel.
Gold has risen with the renewed expectation of cuts as US Treasuries fell back, while the Australian Dollar edged up over the weekend but is still trading low at around US 65.55 cents.
Name | Value | % Chg | |
---|---|---|---|
Major Indices | |||
S&P 500 | 5,459 | +1.11% | |
Dow Jones | 40,589 | +1.64% | |
NASDAQ Comp | 17,357 | +1.03% | |
Russell 2000 | 2,260 | +1.67% | |
Country Indices | |||
UK | 8,285 | +1.21% | |
Germany | 18,417 | +0.65% | |
Japan | 37,667 | -0.53% | |
Hong Kong | 17,021 | +0.01% | |
Euro | 4,862 | +1.06% |
Name | Value | % Chg | |
---|---|---|---|
Commodities (USD) | |||
Gold | 2,369 | +0.35% | |
Silver | 27.88 | +0.63% | |
Iron Ore | 101.60 | -0.70% | |
Copper | 4.1300 | +0.11% | |
WTI Oil | 77.28 | +0.16% | |
Currency | |||
![]() | AUD/USD | 65.55¢ | +0.11% |
Cryptocurrency | |||
![]() | Bitcoin (USD) | 68,111 | -0.05% |
Ethereum (USD) | 3,269 | +0.38% |
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Investment ideas from the edge of the bell curve.
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