The Overnight Report: Soft End

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            [0] => ((WDS))
            [1] => ((WHC))
            [2] => ((WOW))
            [3] => ((QAN))
            [4] => ((TLS))
            [5] => ((HVN))
            [6] => ((IGO))
            [7] => ((MYX))
            [8] => ((29M))
            [9] => ((ALD))
            [10] => ((APE))
            [11] => ((COL))
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            [0] => WDS
            [1] => WHC
            [2] => WOW
            [3] => QAN
            [4] => TLS
            [5] => HVN
            [6] => IGO
            [7] => MYX
            [8] => 29M
            [9] => ALD
            [10] => APE
            [11] => COL
        )

)

This story features WOODSIDE ENERGY GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: WDS
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

By Greg Peel

Ex Marks the Spot

The ASX200 ended August with a sluggish performance, trading in a narrow range all day. The index closed down -1.4% for the month after a round trip which saw it down -4.5% at the low.

Looking at sector moves, you’d be forgiven for thinking it was a shocker for energy (-2.7%) and a bad day for staples (-1.4%), against the tide, but falls of -3.7% for Woodside Energy ((WDS)), -9.4% for Whitehaven Coal ((WHC)) and -0.6% for Woolworths ((WOW)) were simply due to the stocks going ex-dividend (fully franked), although Whitehaven fell a bit more than its div and Woolies a bit less.

Take those out and it would have been a more positive close to August. The only other sector to close in the red was industrials (-0.8%). Qantas Airways ((QAN)) fell -2.0% after Joyce caved on his decision to put a December deadline on covid lockdown flight credits, while at the same time the ACCC launched an inquiry into Qantas selling tickets on already cancelled flights.

I wouldn’t be expecting a ticker-tape parade as you leave the building Alan.

Communication services otherwise won the day (+0.9%) after Telstra ((TLS)) went ex on Wednesday, followed by technology (+0.8%), which followed the Nasdaq, and the banks, which gained 0.6% as bond yields continue to fall. At this rate the ten-year could be back under 4% by today.

Discretionary managed only 0.3% despite a 5.2% jump on earnings result for Harvey Norman ((HVN)), after it reported a -30% decline in profit. Not as much as feared though.

IGO Ltd ((IGO)) was another winner on result, rising 5.5%. Materials rose 0.4%.

Not so flash was Mayne Pharma ((MYX)), which fell -22.7% but is no longer in the index.

Nor is copper miner 29Metals ((29M)), which announced a capital raising equivalent to almost half its existing market cap, supported by private equity which owns about the same percentage, and jumped 17.3%.

In economic news, private sector capital expenditure rose 2.8% in the June quarter when 0.9% was forecast, to be up 10.8% annual.

FY24 capex plans rose to $157.8bn from 137.8bn in the March quarter. These are simply plans and not commitments, and are nominal figures that will be inflation-eroded, but do imply moderate growth in business investment.

Underscoring the above was July growth in business credit of 0.3% despite high interest rates, but also 0.5% growth in personal credit, which is not an encouraging sign. Despite high rates, households are hitting the plastic, suggesting the covid savings buffer is winding down.

Wall Street was mildly weaker last night but it appears we’re going to kick off September in a soggy way, with the futures down -0.5% this morning.

Not With a Bang

It was a quietish session on Wall Street as well last night, rounding out the late August comeback with likely some end-of-month squaring, albeit the Nasdaq still managed another gain.

It was nevertheless still a down-month on the round trip, with the Dow falling -2.4% for the month, the S&P500 -1.8% and the Nasdaq -2.2%. The Nasdaq, however, is up 34.1% in the year to August – its best performance since 2003, when only a few survivors crawled out of the Tech Wreck, such as Microsoft, Google and Amazon, while Steve Jobs was yet to invent the iPod, Mark Zuckerberg was still at college, and AI simply meant “yes” in Yorkshire.

The US personal consumption & expenditure measure of inflation ticked up in July, as expected. The headline and core rates both rose 0.2% in the month, as forecast, taking the headline to 3.3% annual from 3.0% in June, and the core to 4.2% from 4.1%.

Not enough to spook the Fed, but confirmation the path to the Fed’s goal of 2% will not be smooth, and will likely be rather long.

Also a bit worrying is an 0.8% jump in consumer spending in July, or 0.6% adjusted for inflation — the biggest jump in six months. Personal income rose only 0.2% (which the Fed will like) and the savings rate fell to 3.5% to be at its lowest since November, which is corroborated by credit card balances on the rise (as are arrears).

As concerns about the US consumer grow, Wall Street is looking ahead to tonight’s jobs report, which is expected to show a slowdown in hiring but a still-low unemployment rate.

Welcome to September, the worst month of the year (on average).

Commodities

US crude inventory data, showing a drawdown, are behind another jump in oil prices, as well as expectations Saudi Arabia will extend its production cuts to the end of the year. Oil prices were up in the past three months.

The Aussie is up a tad at US$0.6485.

Today

The SPI Overnight closed down -38 points or -0.5%.

It’s the first of the month, so that means house prices in Australia, along with housing finance, and manufacturing PMIs from across the globe.

US jobs tonight.

No more earnings! (But we're still not done updating the Monitor). Instead a long list of ex-divs today led by Ampol ((ALD)), Eagers Automotive ((APE)) and Coles Group ((COL)).

For all company reporting dates, please refer to the FNArena Calendar (https://www.fnarena.com/index.php/financial-news/calendar/) or the Corporate Results Monitor (https://www.fnarena.com/index.php/reporting_season/). The latter summarises result responses from brokers following each day’s result releases.

The Australian share market over the past thirty days…

For more detail go to FNArena's Australian Broker Call Report, which is updated each morning, Mon-Fri.

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