The Monday Report – 28 July 2025

This story features DOMAIN HOLDINGS AUSTRALIA LIMITED, and other companies. For more info SHARE ANALYSIS: DHG

The company is included in ASX300, ALL-ORDS and ALL-TECH

Trade deals, central bank meetings, earnings season (US & Europe) with first local releases later in the week, as well as the all-important June quarter CPI print domestically will set the mood and tone for the ASX200 this week.

ASX200 futures are pointing to a slightly weaker start, but the overnight, EU-US trade deal may boost sentiment.

Good Morning,

Australian market update: Extract Tony Sycamore, IG

The ASX200 finished -90ppts or -1.03% lower last week at 8666.9. Its decline followed aggressive selling in the big banks, and after RBA Governor Michele Bullock downplayed the rise in employment earlier this month, stating it wasn’t a surprise. She also noted monthly inflation data suggest the inflation rate may not fall as quickly as forecast in May.

The hawkish tone from the RBA Governor led to a shift in rate cut expectations. While the Australian interest rate market is still pricing in two full -25bps RBA rate cuts this year, most likely in August and November, the odds of a third -25bsp RBA rate cut before year-end eased to 25% from about 65% at the start of last week.

Returning to the ASX200, with just four sessions left until month-end, it has gained 1.46% month-to-date, on track for a fourth consecutive month of gains, with July again living up to its reputation as a strong month.

Within that, there has been some striking divergence among the key sectors.

-The ASX200 Financial Sector is down -3.47% MTD.

-The ASX200 Healthcare Sector has gained 7.90% MTD, on track for its best month since December 2023, up 9.08%.

-The ASX200 Materials Sector has gained 8.08% MTD, on track for its best month since September 2024, up 11.01%.

-The ASX200 Energy Sector has gained 7.17% MTD, on track for its best month since June 2025 , up 9.01%.

Looking ahead, the key event on the economic calendar this week is Wednesday’s Q2 CPI report.

In the March 2025 quarter, headline inflation rose by 0.9% QoQ, which saw the annual rate remain at 2.4%, higher than the 2.3% expected. The RBA’s preferred measure of inflation, the trimmed mean, rose by 0.7% in the quarter, allowing the annual rate to fall to 2.9% from 3.3% previously—the ninth consecutive quarter of lower annual trimmed mean inflation and the lowest rate since the December quarter of 2021. 

At the July RBA Board meeting, when the Bank surprised markets by keeping rates on hold at 3.85%, the RBA noted recent monthly inflation data had been marginally stronger than expected. The RBA stated it could afford to wait for more information to confirm that inflation is heading sustainably back to target, referring to this week’s Q2 CPI report.

This June quarter (Q2), to be announced on Wednesday at 11.30am AEST, the market is looking for headline inflation to rise 0.8% QoQ, bringing the annual rate down to 2.2%. The more significant core measure, the trimmed mean, is expected to increase by 0.7% QoQ, which would see the annual rate ease to 2.6%, down from 2.9% in Q1.

A print of 2.6% for the trimmed mean would be in line with the RBA’s forecasts and, along with June’s disappointing jobs report, would give the green light for the RBA to cut rates at its August meeting. However, a trimmed mean print of 2.8% YoY or higher would increase the chances of the RBA keeping rates on hold in August, which would likely see a short term sell off in the ASX200. 

Also, this week, the Australian June half profit reporting season kicks off with earnings reports scheduled from companies including Rio Tinto and ResMed.

The week ahead:  Extract Chris Weston, Pepperstone

Tariff-related headlines seen through Sunday have been meaningful, with the US-China tariff pause being extended by a further 90 days, and the US-EU forging an agreement that follows a similar model to that of last week’s US-Japan deal.

EU exporters will now face a 15% tariff rate to US buyers, a far more friendly rate than the 30% rate they were facing. In exchange, the EU has committed to purchasing US$750b in US energy products and some US$600b in other investments.

The news flow from both the extension with China and the agreement with the EU is clearly market-friendly, and should put further upside potential into the EUR, where the single currency is already finding the love from forex players, and should also put renewed upside into European equities.

Importantly, for those nations still looking to achieve a last-minute floor tariff rate (on US exports) of 15%, it’s all too clear from the case studies with Indonesia and Japan the most important factor is committing to massive levels of investment spend. Trump will now sell this hard to the US voters as a huge win for the US. Expect Trump to address the nation in a presser shortly. 

A lasting US-China deal remains a more complex issue, and while trade imbalances remain a major consideration, at the heart of any potential full agreement, we’re likely going to see a commitment from China to massive investment spending.

For the China market watchers, the 24-member Politburo will gather to formulate plans for the balance of 2025. Market expectations for any new impactful policy initiatives are low, and the Chinese authorities will be quietly content to maintain the status quo, perhaps massaging around the edges, with growth metrics tracking above policy objectives. China and HK equity markets have been the star performers in July, so perhaps policymakers will see that as the market voting on increased confidence in China’s economic trajectory.

We navigate G10 central bank meetings in the US (hold), Canada (hold) and Japan (hold), as well as in the LATAM/EM space, with policy decisions in South Africa (-25bps cut expected), Chile (-25bps cut expected), Columbia (-25bps cut expected), and Brazil (no change).

While the BoJ meeting could be quite informative for Yen & NKY225 traders, it will likely be the FOMC meeting on Wednesday that gets the headlines, even if this is shaping up to be a low-impact event for US markets. Expect dissent from Chris Waller and Michelle Bowman, who should both vote for a -25bps cut at this meeting; a symbolic development, as the once galvanised and cohesive committee appears increasingly fractured and almost… dare I say it, politicised…

Dissent aside, Chair Powell will continue to guide the board will take in the incoming data “over the summer”, with traders seeing a cut in the September FOMC meeting as more likely than not, the two nonfarm payrolls prints (31 July & 5 Sept) and two CPI prints (12 Aug & 11 Sept) that hit us in the lead up to the September FOMC meeting now take on additional significance.  

It’s the big week of the US corporate earnings season, with 38% of the S&P500 market cap set to report numbers for the quarter. The lineup includes Apple, Meta, Amazon and Microsoft, but we also hear from some of the retail trader favoured names, including Coinbase and Roblox.

It’s also a big week on the European corporate earnings calendar, with around 20% of the Euro Stoxx companies set to report.

Welcome to Club 6400: Extract Stephen Innes, SPI Asset Management

It’s been a week of champagne and confetti on Wall Street, a rare five-day sweep of record closes for the S&P 500, the kind of “five-for-five” perfection you only get a few times a decade. Welcome to the cusp of Club 6400—wasn’t it just Monday we were handing out wristbands for 6300?

Fueled by a one-two punch of strong corporate earnings and a burst of trade-deal optimism, the index surged another 0.5% on Friday, dragging the Nasdaq up 0.4% and Dow up 0.5% along for the ride. All three majors notched solid weekly gains: the Dow climbed 1.3%, the Nasdaq 1.2%, and the S&P500 1.5%.

US Earning Season Highlights

1. Biggest sales beats in 4 years: 30% of firms have now reported, and according to SocGen 84% are beating EPS and 79% beating top-line estimates. In past years, profit margin surprises mainly drove the beats, but the latest earnings show the strongest top-line surprises in 4 years.

2. Rational behavior: Stocks that beat have outperformed by 0.9%, while misses underperformed by -1.5%, reflecting classic market rationality.

3. Profit margins broadening: S&P 500 profit margins continue to rise, including the ex-Tech sectors.

4. Highest EPS revision ratio in 3 years: The EPS revision ratio stands at 1.4, its highest level in 3 years, indicating 14 upgrades for every 10 downgrades.

6. USD offsets tariffs: A -10% USD drop adds a 4% positive EPS impact, while a 10% tariff rate subtracts -3%. Improving trade deficits and a weak USD policy go hand in hand.

7. Sector and style trends: Communications and Tech firms have all beaten EPS and sales; Materials and Consumer sectors lag. Quality and Momentum styles lead; Value and Small-cap are lagging

8. Rate-sensitive sectors and styles are lagging as they await Fed cuts

9. Corporate activity is strengthening: S&P 500 revenue per employee has hit new highs. Capex to sales is rising across sectors; leverage is at its lowest since 2014. Buybacks are up 16%, and dividends up 6% over 12 months. M&A and IPOs are edging up gradually. Corporate signals show firm corporate activity but no peak equity fears yet.

10. SocGen’s view on S&P 500: The secular backdrop of structurally higher nominal growth is intact post the global fiscal policy shifts. Strong returns from S&P500 last 3 months has proved the French bank’s US outlook, crisis of confidence is short-term.

As a result, the S&P500 is now just a few points away from Socgen’s end-2025 target. However, there is still upside risk as the Fed card has not fully played out, either on curve steepening or the unfinished business of weakening USD. Moreover, the peak excitement for US stocks involves the broadening of the index performance. Looking ahead, SocGen expects that S&P500 to range: 5500-6750, and it sees bubble risk only beyond 7500.

via Zero Hedge Premium

Corporate news in Australia 

-Law firm Gilbert & Tolbin is embedding AI across its practice to achieve a hybrid model to deliver faster and more consistent outcomes.

-The $1.4bn sale of Domain Holdings ((DHG)) by Nine Entertainment ((NEC)) has increased speculation of further asset sales, including radio businesses.

-Bain Capital has dropped the bid for Perpetual’s ((PPT)) wealth management division, with AZ Next Generation Advisory as the main contender.

-WH Soul Pattinson ((SOL)) is investing -$40m in Norther Harbour Clean Energy, a long last energy storage provider.

-KKR is investing $500m in CleanPeak Energy to scale solar rooftop and battery projects.

On the calendar today:

-US Dallas Fed Meeting

-AERIS RESOURCES LIMITED ((AIS)) Qtr report

-AVJENNINGS LIMITED ((AVJ)) ex-div 16.70c (100%)

-BOSS ENERGY LIMITED ((BOE)) Qtr Report

-PERSEUS MINING LIMITED ((PRU)) Qtr Report

-QPM ENERGY LIMITED ((QPM)) Qtr report

-ST. BARBARA LIMITED ((SBM)) Qtr report

-STANMORE RESOURCES LIMITED ((SMR)) Qtr report

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

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