Company Interview / the open: US stocks rise & ASX to dip

Hopes for an economic soft landing are once again powering U.S. stocks higher...

U.S. stocks rose on Friday, extending their biggest weekly percentage gains of the year. The S&P 500 and the Nasdaq notched their seventh straight session of gains.

In US economic data, housing starts fell 6.8% in July to a 1.24 million annualised rate, the lowest since May 2020.

The University of Michigan consumer sentiment index rose from 66.4 in July to 67.8 in August, the first increase in five months.

The futures market is suggesting a slight dip when our market opens this morning.

Global oil prices settled down nearly 2% on Friday, as investors tempered expectations of demand growth from top oil importer China.

Copper futures fell as BHP said it had reached a deal with a labour union to resolve a strike at its Escondida copper mine in Chile, easing concerns about global supply.

Another busy day of earnings, we hear from a2 Milk, Ampol, Bluescope Steel, Iress, Lendlease, Reece and Suncorp all release results.

Westpac provides a trading update. And Seven Group trades ex-dividend.

Full unedited transcript below:

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Joining us for more is Mark Gardner from MPC markets. Pretty dull on Friday, but US stocks having their best week in months. Yeah I think it was the best week of 2024. Yeah. Um obviously bouncing out of those those lows really fast. Um I can't really see it being derailed much this week. Uh, obviously we've got, you know, Jerome Powell a few minutes from the central banks, but Jackson Hole starting Friday. Um, I would expect that the market's not going to make any major moves before we get that out of the way. So, um, it's just earnings earnings earnings this week. Yeah absolutely. Well let's start with earnings because it is a very big week. You and I were talking about Wednesday Thursday in particular. But some really big names. We've had Westpac with the trading update. We're going to have the likes of IAG, Suncorp the likes or. Yeah. So hopefully um you know providing a little bit more positivity. Uh a better day for it today Ampol as well. Uh BlueScope steel. So you know relatively busy today. And then realistically I think Wednesday and Thursday are absolutely chock a block.

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Um, but you've got stuff from all sectors this week. Um, you know, we've got obviously um, you know energy sector there with Santos, Whitehaven, Wednesday, Thursday a little bit from the commodities with Northern Star. You've got some tech, Macquarie and Wisetech on the Wednesday. Clicks is probably one of our favorite ones this week. This pattern so far has been companies with good outlooks, companies that are growing. We think they'll do quite well. They do tend to report pretty well. And then you've got a little bit of the little bit of retail still left with um, you know RB um, and I think the platforms as well. Hub 24 might be one to have a bit of a look at as well, because most of the platforms are domain. Um, rea uh, they've all done quite well so far. So that one might be one might be, you know, pretty good one to watch. So. But yeah, plenty to keep track of. Um, and I think, you know, you guys are you guys will be very busy this week as well. I, I'm thinking of just getting, like, a caffeine drip just inserted

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in my arm. Yeah. That's fine. Um, talking about tricks. So you have a buy on that, but you have a sell on super retail. So just tell us about what you're looking for. I mean, the companies that aren't delivering or, you know, missing and with a, you know, with a mildly even a mildly sort of poor outlook. Really? Um, you know, I really ones that are getting punished at the moment. So while the, you know, Temple and Webster had a really great result, um, you had JB Hi-Fi have a, have a great result. You know, they're kind of in that market, darling. End of the market where and they've got, you know, they've got growth. Um, they're the best in class. Whereas Super Retail obviously has seen the likes of Baker had poor results. Um that auto part is um, Auto Parts Industries is softening. Um, so far from the signs we've seen. So that's just one where, I mean, they have got Rebel Sport, which may add a little bit of a little bit of positivity. But you know, these are results prior to the Olympics giving them a little bit of a bump I suppose. But um, that's just one where I think that

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in that sector particularly, we've had a pretty strong, um, you know, consumer overall. However, the next 6 to 9 months are likely to be, you know, a bit of a bit of slowing down as rates really, really bites into any of that discretionary spend. And that's just one we just see is a bit of a risk overall. But um, yeah. You know, Lovisa, I think next week I would expect those guys to do very well. Um, they've got the store rollouts and things like that, but they're, you know, they're more growth where whereas, um, you know, super retail just, you know, Apple has had a had a poor, um, guidance about a month ago as well. So that auto industry is not looking that healthy at the moment compared to the likes of these, um, these other sort of top line retailers. So, um, yeah, be one, one to watch out for. All right. Well, in terms of other areas, you mentioned some of the commodities too, but a big one in terms of what we might hear with I thematic, the data centers, the likes of Wisetech, yeah, Wisetech and Macquarie. Well Macquarie

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Technologies, they're involved in um data centre rollout. So they've been doing quite well a little bit you know next DC gets all the headlines. But Macquarie you know, does very well. Um I think the likes of Megaport which is on Thursday as well. I mean that sort of network as a service. They might they may get an initial bump from this because they don't really have to spend anything on infrastructure They're obviously leveraging off infrastructure. So that'd be the path of least resistance for companies if they wanted to start, you know, developing AI And and basically buying up those those bits of software and, and data center space. Rackspace. So um, yeah. And Wisetech as well. It's pretty solid. Always a pretty solid performer. Um, we've seen sort of shipping rates go through the roof in the last six months as well. So I mean, you know, you want to be as efficient as you can be with that sort of thing with those logistics. So I would expect them, you know, they're in that market darling category where, you know, they they tend to provide a great outlook. They tend to beat expectations normally. So

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I wouldn't expect them to to report poorly. But yeah, as I said a lot of sectors this week whereas you know we sort of had more the banks and the retailers kind of last week. Well just quickly on that. The winners and losers from last week, how would you sort of give a report card so far. Yeah. Like I said, those who those who have reported well beat expectations and then provided a positive outlook have done extraordinarily well. Um, those who have missed in any way, shape or form, um, have been absolutely punished. There really hasn't been a lot in between. Um, even though even things that are at the top of the range like CSL and cochlear, for instance. In that healthcare sector they were. They didn't really I mean, they were very close to expectations. It depends on who you're watching. Um, anywhere from a slight beat to a slight miss. And they both got pretty punished early. Um, CSL started to recover, but, you know, when it really, you really have to deliver, um, if you're going to break through those record highs and those guys got sold

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off. So, um, origin and you know, and Nufarm, whilst it was only a quarterly update, they do earnings with the other ad companies out of cycle. Um, the Nufarm update was very concerning. It seems their debts sort of spiraled a little bit out of control. And it's all seems to have happened really in in three months. So that's pretty concerning. Um, that, you know, debt can almost double basically. Or, or their ratios can double within three months. So that's one which obviously lost. You know, origin was a touch confusing. I didn't think that was that such was such a bad miss. But um, it just goes to show if you're not delivering what the market wants and a little bit more, then, you know, you're you're not looking. It's not looking for a good day.