ASX News LIVE | ASX to Slip with Wall Street Weakness; Cettire Tanks 40% on Open

The ASX 200 closed down by -0.80% today, closing the session at 7,733.7 as the morning slide broadened today after a number of profit warnings and commodity slumps that depressed stocks.

Only the industrial (+0.71%) sector was spared from the losses today, with all 10 other sectors down.

The energy sector suffered the worst losses today (-1.86%), as mega caps Woodside Energy (-1.98%) and Santos (-1.38%) fell despite a weak commodity sector.

Overall though, it was Mining and consumer stocks that pushed down the market today as markets followed weakness seen on Wall Street.

In individual stocks, ResMed fell by -13% as another European Pharma company’s successful drug trials raised concerns about demand for ResMed’s treatment.

Myer jumped by over +20% as it outlined a potential merger with retail rival Premier Investments.

And Cettire saw its share price tank by nearly -50% in trading today after the company issued a profit warning for the quarter, saying ‘challenging operation environment‘ had affected sales and margins in the luxury e-commerce market.

Crude oil prices have stabilised after dropping for the second consecutive day. This edge of market caution was eventually overcome by concerns raised after a series of maritime attacks near Yemen.

Brent crude dipped below $85 per barrel, while WTI approached $80 before bouncing slightly.

This bounce came as two vessels were attacked near Yemen, with one abandoned due to flooding and another sustaining moderate damage. Recently, a coal carrier sank in the area as Houthi militants intensified their attacks.

The oil market’s prior downward trend moved with a general decline in commodities and Asian equities.

Investors are bracing for upcoming inflation reports as the US dollar’s strength, nears its highest level since November.

The higher USD is a big factor to watch here as it makes commodities more expensive for international buyers.

Despite the recent dip, oil is still on track for a monthly gain. Positive indicators include rising gasoline demand in the US and robust air travel, both supporting the market outlook.

Australia’s last cash transport company, Armaguard, will get a $50 million bailout from its eight largest customers, including banks and the Australia Post, it announced today.

Armaguard is a subsidiary of the Linfox transport group and has struggled as cash usage has declined.

As part of the deal, a forensic accountant will scrutinise Armaguard’s books to ensure targets are met, and the bailout money remains within Armaguard and not passed onto its parent, Linfox.

Armaguard has also agreed to have an independent pricing arrangement come into force in the future as its customers raised concerns about potential monopoly power in the future.

The relief comes after a lengthy financial struggle since it was given approval last year to merge with its biggest rival, the Spanish-owned Prosegur, after both companies said their businesses were not sustainable.

Now, Armaguard holds 90% of the market in moving cash to banks and retailers across the country.

Another major retailer is in the spotlight today Metcash [ASX:MTS] released its full-year financial results, revealing a mix picture of its performance.

The company’s net profit experienced a marginal decline of 0.7%, settling at $257.2 million. However, the underlying statutory profit, which excludes one-off items, fell over 8%, reaching $282.3 million.

The company blamed the fall in underlying profit to reduced earnings in its hardware division and increased finance costs.

Despite these profit decreases, Metcash reported a slight increase in revenue, up 0.7% to $18.2 billion. This revenue figure notably pushes Metcash over the $10 billion threshold, qualifying it for inclusion in the new Food and Grocery Code of Conduct mentioned earlier today.

Group CEO Doug Jones characterized the overall result as strong, saying:

“Operationally, all pillars performed well, in line with their strategic positioning, demonstrating resilience in the current softer market conditions.”

Shares are down by -3.04% today, trading at $3.66 per share.

Following in the footsteps of similar selloffs due to the famous weight-loss drug Ozempic, ResMed [ASX:RMD] has seen its stock fall by -14% in trading today as news of another company’s latest successful Phase 3 results.

The stock, which has been a favourite among Australian fund managers, fell $4.32 to $27.53.

The fall came after European pharmaceutical Eli Lilly reported that its weight-loss treatment had successfully reduced the severity of obstructive sleep apnea in trial patients.

The knock-on effects of this drug’s success could be fewer patients for ResMed’s treatment, causing today’s selloff.

The situation resembles previous market reactions to weight-loss drugs like Ozempic, which have periodically caused selloffs in stocks of companies focused on sleep apnea treatments.

The ASX 200 is down by -0.63% at 7,747.2 as the market continues to slide through the day as Health Care majors and the Discretionary sector fall, we’ve also seen large shifts in some major players.

Myer is up by an incredible 17% after announcing a potential merger with Premier Investments via an all-scrip merger, which would combine the two major retail juggernauts.

Cettire is down by a whopping -46.65% after flagging weakness in its fourth-quarter earnings, saying that many luxury brands are experiencing a challenging trading market which is forcing heavy discounting and squashing margins.

In healthcare, Resmed is down by -13% as investors were underwhelmed by its Phase 3 clinical trials for a weight-loss treatment.

Meanwhile, elsewhere, Droneshield fell by -10.7% in trading today as it’s explosive growth looks to be running out a steam for now.

Cettire, the online luxury goods retailer, has announced a potential profit shortfall due to challenging conditions in the global luxury market.

In its update today, the company said fourth-quarter trading has been impacted by an industry-wide downturn.

CEO Dean Mintz reports quieter market and increased discounting across all regions, saying:

“Multiple listed luxury businesses have described softening demand trends and increased promotional activity, leading to a tougher margin environment.”

The sentiment had already been shakey in the online retailer after a series of reports a number of months ago by the AFR which questioned their tax payments and business practices.

It seems that was enough to send shareholders running, with the share price down by -40% in trading so far today.

The Australian government has confirmed plans to implement a mandatory code of conduct for large supermarket chains, focusing on fair treatment of suppliers.

As the ACCC inquiry into price gouging continues, today’s proposed changes are the government’s first shot across the bow in this ongoing dispute.

So far this morning, major supermarkets seem unaffected, with Coles trading up +0.35% and Woolworths up by 0.12%.

Key points of the changes include:

• Mandatory code replaces the current voluntary system
• Applies to supermarkets with annual revenue of $5 billion or more (Coles, Woolworths, Aldi, Metcash)
• Fines up to $10 million or 10% of annual turnover for breaches
• New mediation and arbitration process for supplier complaints
• Supermarkets are required to deal with suppliers ‘in good faith’
• Prohibitions against unreasonable demands or retribution against suppliers

These changes aim to address the power imbalance between supermarkets and their suppliers, including farmers, and crack down on anti-competitive behaviour in the grocery sector.

But judging from the early share response, many traders were perhaps relieved at the soft approach seen so far.

Good morning. Charlie here, back from my holiday for a busy day on the market; let’s dig in.

The ASX 200 opened down -0.16% this morning to 7,783.3 as Wall Street closed lower on Friday as market major Nvidia fell for the second straight session.

Meanwhile, commodity markets over the weekend we saw a sharp selloff in gold and copper which could hit ASX players today.

In local stocks, Webjet laid out its plans for the demerger of its successful B2C business and online retailer Cettire fell sharply after the company issued a profit warning this morning; more details on that soon.

Wall Street: S&P 500 -0.16%, Dow flat, Nasdaq -0.18%.

Overseas: FTSE -0.42%, STOXX -0.82%, Nikkei -0.19%, SSE -0.24%.

The Aussie dollar -0.10% to US 66.40 cents.

US 10-year bond yields -1bps to 4.25%.

Australian 10-year bond -0bps to 4.20%.

Gold -0.13% to US$2,318.31, Silver -0.63% to US$29.35.

Bitcoin -2.04% to US$62,990, Ethereum -2.5% to US$3,418.

Oil Brent -0.31% to US$84.98, WTI Crude -0.32% to US$80.47.

Iron ore -0.16% to US$105 a tonne.