It’s shaping up to be one of those days where a string of small disappointments adds up to a forgettable day on the bourse, as earnings reports tell stories of what might have been, and companies jockey to be the one at the front of the queue for the Next Big Thing.

The end result is a market that looks like it could do with a friend right now – the benchmark opened lower and has puddled and muddled its way to below 0.7% over the morning session, despite a positive lead in from Wall Street overnight.

But today’s mostly been about earnings that have fallen short so far… and a not-very-shocking and also-not-great set of July inflation figures from the ABS hasn’t helped anyone’s mood.

Here’s what’s been happening.

 

TO MARKETS

The ASX 200 benchmark has been sliding since markets opened this morning, kicking off the day 0.3% lower than yesterday’s close, and drifting silently like a leaky boat that’s slipped its mooring and decided that the bottom of the sea is looking pretty comfy right now.

The sectors looked like this at lunchtime today:

 

asx winner (FXG)
chart via Marketindex

 

Consumer Staples was the only sector making happy faces out the window of the bus this morning, and the meagre gains are pretty much down to Woolworths (ASX:WOW) putting on 1.0%, despite lobbing an earnings report with a $1.5 billion impairment in the middle of it, thanks to New Zealand Food.

Woolworths’ Kiwi business has a few issues that it’s dealing with right now – not least of which have been soaring payroll costs that have climbed 19% over the past two years, rapidly outstripping the pace of much-needed sales growth by a decent margin.

That has led to a 57% decline in normalised EBIT for FY24, which in turn has put more than a shopping trolley ding in the driver’s door of Woolies’ overall performance.

The end result was a 5.6% jump in revenue to $67.92 billion, which leaves WOW with a $1.7 billion NPAT, down 0.6% on last year – which is still a decent earn, prompting the supermarket giant to pay out a $0.57 per share divvy to shareholders.

Elsewhere in Earnings Land, Tabcorp Holdings (ASX:TAH) investors were left sweating like a beaten favourite, after the company delivered a net income loss of $1,359.7 million, after a 3.9% drop in revenue to $2,338.9 million, leading to an 18.7% fall in EBITDA to $317.7 million… so TAB shares were 13.3% lower at lunchtime.

Fortescue (ASX:FMG) reported a 3.0% bump in annual profit this morning, which has propelled the company to its third biggest earnings report ever. However, the underlying net profit after tax wasUS$5.66 billion has fallen short of expectations (which were up around US$6.1 billion), and FMG stocks are being punished for that today.

There was a market-wide shudder mid-morning, when the ABS announced that the nation’s headline inflation fell to 3.5% in July, down from 3.8% in June – which looks like a solid result until you factor in that the RBA is aiming for somewhere between 2.0% to 3.0%.

So while inflation is moving lower, its seems like it’s flowing in a manner best described as “glacial”, and we’re unlikely to see rate cuts when it’s still too high.

The main factors driving inflation were sharp cost-of-living expenses blowing out, such as Alcohol and Tobacco (+7.2%), Housing (+4%) and food and non-alcoholic beverages (up 3.8%).

For what it’s worth, Coles Group (ASX:COL) released its earnings yesterday, posting a solid $1.1 billion full-year profit that has prompted a few people to start wondering just how much of our Supermarket-based Cost of Living Pressure is being distributed to shareholders through dividends.

(Spoiler alert: it’s a lot.)

 

NOT THE ASX

Overnight, the blue chips Dow Jones lifted by 0.02% , while the S&P 500 and the tech heavy Nasdaq each rose by 0.16%, as US investors braced for what is arguably the single-most important earnings report this year.

Chipmaker Nvidia, which has driven the US Nasdaq skyward faster than having a fat kid on the other end of a see-saw, is reporting later tonight (our time) – and investors that have pushed the company’s share price up 159% in 2024 are really hoping that they’ve backed the right horse this time.

The Dow’s 0.02% rise might well have been miniscule, but it was still enough for the Dow to crow about hitting a brand-new all-time high again.

In US stock news, Meta fell 0.4% after CEO Mark Zuckerberg claimed that Facebook faced “pressure” from the US government to restrict content about Covid-19 during the pandemic, and expressed regret over the company’s choice to comply with those demands.

Apple’s stock rose after the company announced it will appoint Kevan Parekh, an internal candidate, as its new CFO, just two weeks before its major product launch of the year.

Eli Lilly & Co. also rose slightly after saying that it was now offering its popular weight-loss drug Zepbound to patients for as low as US$399 a month, as it addresses issues with supply shortages.

In Asian markets this morning are in a similar boat to their Aussie cousins, with Japan’s Nikkei down 0.22%, Shanghai markets lower by 0.11% and the Hang Seng off by 1.05% on the way towards lunch.

And if you’re expecting news from the Slovakian markets today, you’ll be waiting about 24 hours – they’ve got the day off, the lucky sods.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for 28 August [intraday]:

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Wordpress Table Plugin

 

Felix Gold (ASX:FXG) was climbing well on Wednesday morning, after the company announced exceptional high-grade antimony assay results from drilling at its Treasure Creek project, after re-testing samples that had previously been assayed for gold. Historic drill samples returned antimony results including 3.0m @ 14.24% Sb from 7.62m, and 15.2m @ 5.5% Sb from 21.3m including 6.1m @ 13% Sb.

Dart Mining (ASX:DTM) climbed after the company issued an open invitation to investors to a webinar, where the company will be talking about the acquisition of the Triumph Gold Project as announced on ASX on 27 August 2024.

The Market (ASX:TMH) issued a preliminary annual report today, showing a revenue bump of 12% to $91.5m, which has delivered a $1.7 million EBITDA loss from continuing operations, due to several impairments and one-off costs. Those aside, the company achieved a much stronger underlying EBITDA from continuing operations of $7.8 million and an adjusted profit before tax from continuing operations of $1.2 million.

City Chic Collective (ASX:CCX) was up after announcing FY24 sales revenue of $131.6m (down 28.3% on FY23), which has led to an underlying EBITDA loss of $8.4m, which is a 47.3% improvement on FY23 and 9.8% ahead of proforma forecast, and also the departure of the company’s Chief Financial Officer Peter McClelland, who is leaving the company in mid-October.

ENRG Elements (ASX:EEL) rose on news that it has completed the acquisition of the Lamont Lake uranium exploration project in Saskatchewan, Canada, which is a highly prospective uranium province and favourable operating jurisdiction.

Estrella Resources (ASX:ESR) was climbing, but went into a halt before lunch ahead of a capital raising.

Pantera Minerals (ASX:PFE) was up on news that the company is set to access a Smackover production well and a disposal well allowing for potential DLE pilot plant location, to produce lithium brine. Work is expected to begin imminently, and the company says a re-entry well will provide brine samples for Lithium grade analysis and Direct Lithium Extraction (DLE) process testing.

WIN Metals (ASX:WIN) was up after announcing plans to acquire the Palm Springs Gold Project in the Kimberley region of Western Australia from Meteoric Resources via a tenement sale agreement, which boasts an already established high-grade mineral resource of some 357,000oz (5.6Mt @ 2.0g/t) of gold based around two resource area, and produced 52,000oz produced between 1995 and 1997.

ECS Botanics (ASX:ECS) announced its annual results, showing revenue of $20.5 million – up 31% on pcp, delivering NPAT of 2.0 million, up a bumper 305% on pcp. The company was also celebrating a bumper crop 6.6 tonnes, up 57% on pcp with sell-through initiatives in place, and has begun construction on 9 new Protective Crop Enclosures.

Canterbury Resources (ASX:CBY) gained Wednesday morning on news of “outstanding” drilling results from large-scale Briggs copper-molybdenum project in central Queensland, including a bumper 276m at 0.45% Cu and 24ppm Mo from surface, with around 50% of that mineralisation occurring beyond the current boundary of the site’s existing inferred mineral resource.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for 28 August [intraday]:

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ICYMI – AM EDITION

Anson Resources (ASX:ASN) has submitted its notice of intent to the US Bureau of Land Management and the Utah Division of Oil, Gas and Mining for the drilling of 24 exploration holes at its Yellow Cat uranium and vanadium project.

This drilling will test the 2km strike extension following the east-west mineralised trend striking from the Windy Point mine to the Mineral Treasure mine.

Sampling has previously yielded values of up to 10.33% U3O8 and 25.6% vanadium pentoxide.

Meteoric Resources (ASX:MEI) has reached a conditional agreement to sell its Palm Springs gold project in WA’s Kimberley region to WIN Metals (ASX:WIN) for up to $5m.

WIN has already made a $50,000 deposit and will pay a further $950,000 in cash and $1.75m worth of its shares upon settlement.

Further payments to MEI include $1m in cash to be paid 18 months after settlement and $1.25m upon the production of 20,000oz of gold from Palm Springs.

NickelSearch (ASX:NIS) has revealed plans to acquire a 100% interest in the Mt Isa North Project, made up of a handful of highly prospective exploration permits covering 2,003km2 in the Mt Isa region.

The new site for NIckelSearch is just 10km along strike from Glencore’s Mt Isa Mining & Processing Complex, which boasts a pre-mining metal inventory of 255Mt @ 3.3% Cu.

Historical drilling dating back to the 1970s at Mt Isa North turned up some excellent prospects, such as 23.77m @ 4.67% Cu from 51m incl. 12.80m @ 7.77% Cu at Surprise Mine. Nearby, the Julius prospect returned undrilled high-grade Cu-Au structure with rock chips grading up to 39.5% Cu + 1.62g/t Au, and the Gunpowder Creek prospect contains undrilled high-grade Cu-Au structure with rock chips grading up to 7.32% Cu + 0.65g/t Au.

 

At Stockhead, we tell it like it is. While Anson Resources, Meteoric Resources are Stockhead advertisers, they did not sponsor this article.

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