ASX News LIVE | ASX to Slip; Telstra Cuts 2,800 Jobs; Nasdaq and Gold Hit Record High

Yesterday troubled casino operator Star Entertainment Group [ASX:SGR] which I reported on here, saw its share price jump by 20% after an AFR article surfaced which the company then confirmed, saying that it had received several takeover proposals, including from a consortium that included Hard Rock Hotels & Resorts (Pacific branch).

Today the company’s shares are down by -7.41%, trading at 50 cents as Hard Rock US denied that it has licenced its name to any proposal and threatened legal action, saying:

‘We want to make it clear that Hard Rock International is not involved in, nor has it authorised, any discussions, activities or negotiations on its behalf in connection with a proposed bid for Star.’

 

‘Hard Rock International has similarly not authorised the use of the Hard Rock brand in connection with any proposed bid for Star by any third party,’

 

‘Any misuse of the Hard Rock name in unauthorised business dealings is taken very seriously. We are currently investigating this matter and will pursue all necessary legal actions to protect our brand and reputation.’

The star then clarified today that it had not received a complete proposal from Hard Rock International but did receive and incomplete early proposal from a consortium that included Hard Rock Pacific.

So either the Pacific branch got ahead of the international side, or Star got ahead of its skis yesterday. Either way it has been a volatile start to the week for the troubled casino.

As I said yesterday, the offer was likely to bring more drama into the already drama-filled company that is still fighting to get its licence back to operate in NSW.

The ASX 200 looks to be taking a breather today, mirroring a mixed performance on the US benchmarks last night.

At midday, the ASX 200 is down by -0.10% to 7,855.9, with six out of the 11 sectors trading lower, with the communications services sector leading the losses. Telstra, the telecom giant, shed 2.7% to $3.57, matching its lowest level since 2021, after announcing plans to cut up to 2,800 jobs.

James Hardie, the building products group, emerged as the biggest laggard, plunging 10% in its largest one-day drop in over a year. This decline followed the company’s guidance for 2025 net income, which fell short of market expectations.

Sonic Healthcare, the diagnostics giant, tumbled more than 8% after flagging lower-than-expected profits due to inflationary pressures and unfavourable currency exchange rates.

Star Entertainment, the casino operator, fell 2.3% as investors weighed the prospect of a consortium bid including Hard Rock Hotels & Resorts (Pacific). The struggling casino revealed on that it had received an incomplete proposal from a consortium of investors that included Hard Rock, though Hard Rock denied the claim.

Mining giants also slipped despite higher iron ore prices, driven by Beijing’s measures to support the ailing property sector and a surge in copper prices. Rio Tinto slumped 1.3% after declaring force majeure on Australian alumina cargoes due to gas shortages in Queensland, while BHP remained flat, and Fortescue fell 1.1%.

However, gold producers had a good session, benefiting from a record high of $2,449.89 in precious metal prices yesterday. St Barbara climbed 3.5%, and Bellevue Gold rose 1.5%.

The local ASX chart is not updating today, so here is a snapshot of global markets.

The latest RBA minutes for their last meeting were just released, showing that the Central Bank considered raising interest rates at its last meeting.

There was a notable tone of uncertainty throughout the minutes, with lines such as:

‘[Falling inlfation] was unlikely to be smooth and members recognised the considerable uncertainty about the outlook for both inflation and the labour market. Given this, members agreed that it was difficult either to rule in or rule out future changes in the cash rate target.’

Still, there was enough in the minutes to likely fire up the hawkish tones heard by a few, notably editors at the AFR who say that the latest budget and dovish moves by the RBA are leading to re-accelerating inflation.

Here were the main lines in the minutes that covered the RBA’s considerations:

Source: RBA

The tweets below were the catalyst for a massive Crypto bull run starting overnight, with Ethereum leading the charge, gaining around 20%.

Two senior Bloomberg reporters were at the heart of the rumours, after saying they were ‘hearing chatter this afternoon that SEC could be doing a 180.‘

The SEC which up until now has been doggedly attacking the idea of a Spot ETF for Ether, still has an ongoing court case with blockchain developer Consensys where the SEC has maintained the position that Ethereum is not a security.

The SEC this week faces a number of final deadlines on the spot ETF approvals/denials after having delayed decisions on the funds several times.

As I type the price of Bitcoin is up by 7.11% to US$71,247 (A$106,816), and Ethereum is at US$3,3684 (A$5,524)

The diagnostics giant Sonic Healthcare [ASX:SHL] has lowered its profit expectations for fiscal 2024, citing inflationary pressures and unfavourable currency exchange rates.

The company has revised its EBITDA forecast to $1.6 billion on revenue of $8.9 billion.

For fiscal 2025, Sonic Healthcare expects EBITDA of $1.7 billion to $1.75 billion, factoring in potential negative impacts from fee cuts in the USA, losses from a UK NHS contract, and an equity-accounted loss.

Sonic’s CEO, Dr Colin Goldschmidt said today:

‘The 2024 financial year has been one of transition for Sonic Healthcare, moving away from pandemic conditions into a more normal business environment. Our current robust topline growth, organic and non-organic, in a setting of inflationary cost pressures, have combined to delay the completion of our programs to align labour costs more closely with post-pandemic conditions. These unique business conditions have also made forecasting our earnings unusually difficult this year.’

Investors have sold heavily on the news, with the company’s share price down by over -10% to trade at $24.04 per share.

Telco giant, Telstra [ASX:TLS], has unveiled plans to slash up to 2,800 jobs from its workforce.

The decision comes as part of a ‘reset’ announced by the company which is planning a broader simplification of its business and products to improve its cost base.

Vicki Brady, Telstra’s Chief Executive Officer, said the measures were ‘necessary,’ citing the ever-increasing growth in data volumes on the company’s networks and the need to make strategic investments to support this growth.

“This is occurring within a dynamic environment, with an evolving competitive landscape, rapid advances in technology, changing customer needs, and the ongoing inflationary pressures facing all businesses,” she stated.

The proposed job reductions, which are subject to consultation with unions and employees are a huge blow to workers and a troubling sign for Australia’s economy.

Despite the workforce reduction, Telstra has reaffirmed its financial guidance for the fiscal year 2024 and provided an underlying EBITDA guidance range of $8.4 billion to $8.7 billion for the fiscal year 2025.

The company expects to achieve $350 million of its cost reduction target by the end of next year and forecasts one-off restructuring costs ranging from $200 million to $250 million across the current and upcoming fiscal years.

Shares of Telstra are down by around -2%, trading at $3.60 per share this morning.

Good morning. Charlie here,

The ASX 200 opened briefly up, before falling +0.25% this morning to 7,844.4 as bright spots emerge in the market. Commodity prices are a notable high point at the moment but they aren’t going to be enough to buoy the Aussie benchmark today as troubling signs emerge of a slowing economy.

Telstra’s announced the cutting of 2,800 jobs this morning. The move will be the major bearish news for Australia today, with Telstra’s share price down -2.2% at open.

While in the US, anticipation of Nvidia’s upcoming earnings tomorrow has sent US tech stocks on the Nasdaq to a fresh record high overnight.

Nvidia smashing earnings per share estimates is ‘worst-kept secret on Wall Street’, says Evercore.

Meanwhile, gold and copper prices have also hit record levels as optimism on US interest rate cuts moves through the markets.

Silver is also charging, with prices at an 11-year high of US$31.78.

In crypto-land the second largest cryptocurrency, Ethereum jumped 20% overnight as rumours of a possible Spot ETF approval have circulated. Bitcoin and other major coins are also up, with BTC adding nearly US$5,000 since yesterday.

On the Australian market, we have another record earnings year from James Hardie and high commodity prices, which should make today an interesting trading day.

Wall Street: S&P 500 flat, Dow -0.49%, Nasdaq +0.65%.

Overseas: FTSE flat, STOXX +0.20%, Nikkei +0.73%, SSE +0.54%.

The Aussie dollar fell -0.51% to US 66.68 cents.

US 10-year bond yields +3bps to 4.44%.

Australian 10-year bond +5bps to 4.26%.

Gold rose +0.25% to US$2,426.31, while Silver rose 1.12% to US$31.77.

Bitcoin jumped 7.76% to US$71,249, while Ethereum rose +19.6% to US$3,676.

Oil Brent fell -0.35% to US$83.71, while WTI Crude fell -0.18% to US$79.66.

Iron ore rose +1.06% to US$119.10 a tonne.