• ASX down 0.3pc at lunch, on track to end a 10-day winning streak
  • Key sectors are struggling, with  declines in gold and energy stocks
  • Jumbo Interactive and Inghams Group both saw sharp drops

 

Australian shares are expected to end their 10-day winning streak today, with the benchmark ASX 200 index down 0.3% at lunchtime.

The fall follows a negative session on Wall Street where the Nasdaq fell by 1.7%.

Investors are combing through a thick pile of ASX earning reports this morning for insights into the sharemarket’s likely direction for the remainder of 2024.

See highlights below.

Nine out of 11 sectors were flashing red, with Utilities and Energy the worst performers. 

 

Source: MarketIndex

 

Gold stocks were also sold off after bullion prices came down below the psychological US$2,500 an ounce level.

Meanwhile, Energy was dragged down by coal and oil-related stocks. 

This is despite crude prices rebounding overnight, driven by developments from a severe attack on a crude tanker in the Red Sea.

The attack, which resulted in the evacuation of the crew and left 150,000 tonnes of crude onboard, is now viewed as a potential environmental hazard. No group has claimed responsibility for the attack.

Also in the news this morning, the Albanese government has placed the CFMEU’s construction division into administration, removing hundreds of officials nationwide. 

The CFMEU, or Construction, Forestry, Maritime, Mining and Energy Union, is one of Australia’s largest trade unions.

This decision, announced by Attorney-General Mark Dreyfus, follows allegations of criminal infiltration within the union. 

 

Today’s earnings season highlights

Lotto operator Jumbo Interactive (ASX:JIN) sank 10% despite record full-year results.

Total transaction value surged by 23.7% to $1.054 billion,  which is a record, while revenue increased by 34.2% to $159.3 million. Underlying EBITDA rose 30% to $76.6 million, and underlying NPATA grew by 31.5% to $46.4 million. 

Despite these strong results, Jumbo’s stock price reaction could be attributed to investor concerns about future growth amid a recent increase in the service fee paid to The Lottery Corporation and higher operating costs.

Poultry group Inghams Group (ASX:ING) also took a dive, down 18% after it announced that it expects underlying EBITDA for FY25 to remain flat, with a forecast range of $236 million to $250 million.

This is despite NPAT for FY24 rising to $101.5 million, an increase of 68%. Revenue also grew by 7.2%, reaching $3.26 billion. The company declared a final dividend of 8 cents per share, fully franked, down from 10 cents the previous year.

Telix Pharmaceuticals’ (ASX:TLX) shares posted a 6% gain after reporting impressive interim results, with NPAT of $29.65 million compared to a net loss of $14.32 million last year. 

Revenue increased by 65% to $363.96 million, largely driven by sales of Illuccix, its cancer imaging product, in the US. 

Telix has reaffirmed its full-year 2024 revenue guidance, which is projected to be between US$490 million and US$510 million.

Shoes retailer Accent Group (ASX:AX1) was also down 12% after reporting a 32.9% decline in full year NPAT, down to $59.53 million, despite a 2.4% increase in revenue to $1.45 billion.

Final dividend for the year has been set at 4.5 cents per share, fully franked, down from 5.5 cents last year.

 

NOT THE ASX

Overnight, Wall Street fell, driven mostly by the tech-heavy Nasdaq after a couple of Fed policymakers said any rate cuts would be “gradual” and “methodical”.

Philadelphia Fed President Patrick Harker told CNBC, “In September we need to start a process of moving rates down. We need to start bringing them down methodically.”

Kansas City Fed president Jeffrey Schmid said he wasn’t fully ready to support a cut. “It makes sense for me to really look at some of the data that comes in the next few weeks,” he told Bloomberg. 

Treasury yields fell across curve, with the largest decline occurring in shorter-term maturities, indicating that traders are pricing in imminent rate cuts.

“It is problematic in my mind that the market is pricing in so many rate cuts right now,” said Mohamed El-Erian at Queens’s College Cambridge.

All eyes are now on the Fed’s Jackson Hole symposium, which began last night. Investors are eagerly awaiting any change in tone from the central bank, particularly when Jerome Powell speaks at the event on Friday.

To stocks, Tesla tumbled almost 6% on no specific news, leading all seven of the “Magnificent Seven” stocks lower.

Nvidia  fell nearly 4%  while Amazon and Microsoft were both off more than 2%.

Peloton, the fitness equipment maker, jumped 35% as the company posted a revenue beat for Q4.

And Uber says it plans to introduce self-driving Cruise LLC vehicles to its ride-hailing platform next year

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for 23 August [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

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Bioxyne (ASX:BXN) was still riding high from its  recent announcement. On Tuesday,  the company  said it has achieved an Australian first with the successful manufacturing and delivery of the country’s first pharmaceutical cannabis pastilles (gummies) under its Goods Manufacturing Practice certification.

Elixir Energy (ASX:EXR) announced that the Daydream-2 well in Queensland’s Taroom Trough has successfully flowed gas from the deepest coal seams yet recorded in Australia. This marks the first gas flow from these deep coals in the region and achieves a key goal for the project. The gas flow occurred naturally through a full well-bore of water, and Elixir will now work with independent certifiers to begin converting prospective resources into contingent resources. The next phase involves removing plugs from the well’s six stimulated zones and conducting a comprehensive flow test. 

Buxton Resources (ASX:BUX)  provided an update on its Graphite Bull and Narryer Projects. Core drilling at Graphite Bull has been completed, totalling 1,221.5 metres across two holes. Reverse Circulation (RC) drilling is ongoing. All holes intersected graphite, with one notable intersection of 68 metres at over 10% visually estimated Total Graphitic Carbon (TGC). Product qualification with BTR in China has begun, and RC drilling will soon start at the Narryer Project. Recent drilling aims to support a significant Mineral Resource Estimate by Q4 2024.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for 23 August [intraday]:

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PNX Metals (ASX: PNX) is set to be acquired by Patronus Resources (ASX:PTN) through a scheme of arrangement. Shareholders will vote on this proposal at a meeting scheduled on 27 August.

Inca Minerals (ASX:ICG) has identified new targets across its projects after reviewing geophysical data from the past three years. A review of historical drill results from the MaCauley Creek Project has identified a promising central area, with strong silicification and copper occurrences. Recent fieldwork has assessed access for potential drilling.

Playside Studios (ASX:PLY) reported record revenue of $64.6 million for the year, up 68%, with increases in original IP and work-for-hire revenues. The company achieved an EBITDA of $17.5 million and a net profit of $11.3 million. During the year, Playside secured a Game of Thrones license with Warner Bros., a publishing deal for the shooter MOUSE, and launched Dumb Ways to Survive on Netflix Games. The twin-stick shooter Kill Knight is set for an October release, and its Meta Horizon Worlds contract is extended through December 2025. Playside will provide its FY25 guidance in October.

Bowen Coking Coal (ASX: BCB) has announced the resignation of Mr David Conry AM as a non-executive director. Conry, who joined the board in June 2023, has been instrumental in supporting the company’s transformation plan. Conry stated that his resignation was due to his need to focus on other significant business commitments and new ventures.

 

ICYMI – AM EDITION

American West Metals’ (ASX:AW1) deep diamond drilling has confirmed the large lateral extent of the Storm copper system with the red metal now intersected in all holes drilled to date over a 10km2 area.

Pan Asia Metals (ASX:PAM) expects to start an inverse polarisation survey to map and detect Manto-style copper mineralisation within its Rosario project in Chile on or about September 23, 2024.

The company has engaged Quantec Geoscience to carry out the survey of 19 IP lines totalling ~27km to assist with drill targeting, delineation and structural control identification.

“We are excited to be conducting the first ever geophysical survey at Rosario and look forward to seeing what’s below, given the high-grade rock chip and channel samples and Rosario’s proximity to the famous El Salvador mine 10km to the south, which has been in operation since 1959,” managing director Paul Lock said.

“The IP program will be closely followed by an inaugural drill program.”

 

At Stockhead, we tell it like it is. While Bioxyne, American West Metals and Pan Asia Metals are Stockhead advertisers, they did not sponsor this article.

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