The Overnight Report: BigTech Wobbles Nasdaq

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The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

US markets attempted to rally before giving way to selling in Big Tech ahead of Friday's Jackson Hole meeting.

The ASX200 fell yesterday as investors dumped CSL shares, with futures pointing to a positive start on Wednesday as earnings releases shift up a gear.

Good Morning,

An underwhelming result release from CSL ((CSL)) ruined the ASX200 party yesterday, with its shares falling by -16.9% on the back of Behring disappointment and corporate restructuring plans, which dragged down the index by -63pts of -0.7%.

The Healthcare sector, unsurprisingly, declined by -8.7%, followed by energy, with communication services outperforming.

NAB Markets Today Research extract

Yesterday’s Westpac-MI August Consumer Confidence survey showed a 5.7%m/m rise to 98.5 (long term average is 100, at the end of 2024 it was 92.8). The survey period was 11-15 of August and would have incorporated the RBA’s August rate cut decision (12 August), as well as the ongoing rally in equity markets and the continued lift in dwelling prices. 

While it is tempting to attribute the rise in sentiment to the RBA’s decision to cut rates, it is worth noting the largest leap in sentiment was driven by renters (up 14.0% m/m to 99.1).

Other housing tenure types saw a small rise with those who own outright up 4.0% m/m to 100.6, and those with a mortgage up 1.5% m/m to 96.3.

That suggests an improvement in overall conditions, rather than just reaction to lower interest rates.

What happened overnight, extract Chris Weston, Pepperstone.

Traders cut their craft and worked through what was a fairly lively US session. Despite no obvious smoking gun or significant fundamental driver, correlations across markets rose, and risk was pared back.

A modest USD rise pushed gold lower, even as US Treasury yields rolled over a touch, with DXY technicals suggesting the USD has put in a short-term base from which it could build. 

US equities rallied in the first 30 minutes of cash trade, with S&P500 futures lifted to 6476, before the sellers took control, driving an intraday downtrend that troughed out at 6419. 

The NAS100 price action was even cleaner, with immediate selling pressure from the open. Nvidia fell -3.5%, and the broader MAG7 basket saw profit-taking.

Naturally, much now hinges on what we hear from Jay Powell on Friday and the raft of central bankers speaking at Jackson Hole. The concern for those holding heavy risk exposures is that the US yield curve bear-flattens (i.e. 2-year Treasury yields rise faster than long-end yields), the USD accelerates, and the DXY looks to revisit 100.

US tech weighed on the benchmarks, with investors cutting back lower-quality plays and rotating into defensives. At a sector level, REITs, staples, and utilities worked well, while high short-interest names and high-beta retail favourites were hit hard. Small caps underperformed large caps, and technically the S&P500 broke its short-term minor uptrend (drawn from the 1 Aug low).

The bulls argue this rotation and position management is prudent and does not derail the equity trajectory. The VIX gained a modest 0.58 vols to 15.57%.

Asia looks set for a mixed open, with small upside eyed in the ASX200, while the HK50 and NKY225 cash equity markets are poised to open -0.4% to -0.6% lower.

It’s a light data session in Asia, though earnings will attract attention.

Stephen Inness, SPI Asset Management extract

It felt like the market wanted to clear its throat before Jackson Hole — a broad risk-off session where traders sold first, asked questions later, and left only Treasuries standing.

The good? Housing starts came in hot,  good news if you’re renting, less so if you’re trying to buy in a market where affordability’s already in the stratosphere. Hedge funds had themselves a day, finally seeing their short books work as the “most shorted” basket unravelled.

The bad? Building permits slumped, a reminder that the supply pipeline is swelling while high rates cap demand.

Gold couldn’t catch a bid, sliding for a fourth straight session and breaking key averages thanks to a stronger US dollar.

Crypto shared the same fate, with Bitcoin giving up its summer swagger and slipping to three-week lows.

The ugly? Meme stocks flirted with July highs before rolling over hard. Momentum longs were hit across the board, with the Mag 7 losing more ground while the rest of the S&P493 went nowhere. Retail favourites saw their worst day since midsummer.

The tape told the story: Nasdaq led the drop, while the Dow managed to claw back to flat by the bell. Hedge funds, though, booked their best day in weeks as their shorts finally paid. Vol ticked up ahead of options expiry, with everyone eyeing Jackson Hole and Nvidia earnings as the next big catalysts.

The dollar roller coaster was in evidence, weaker in Asia (as has been the regional trend), stronger in New York but stayed stuck in its post-payrolls range. Bonds were the safe harbour, bought steadily all session, with yields down as traders looked for cover ahead of Powell.

Oil drifted lower again, slipping into the low US$60s, its weakest since June. Gold cracked its 50-day moving average, Bitcoin lost its own technical footing, and both reminded traders that momentum cuts both ways.

And just for color: Moody’s downgraded the U.S. citing tariffs, while S&P reaffirmed U.S. credit on the back of… tariff revenues. A classic case of two referees calling the same play in opposite directions, the market chuckled, then got back to watching Powell’s dice.

The takeaway? Positioning’s being cleaned up before the Fed show. Bonds wear the safety bid, equities carry the bruises, and Friday’s Jackson Hole speech is the coin toss everyone’s waiting on.

The dog days are behind us — and now the market wants answers.

Corporate news in Australia

-CSL ((CSL)) has appointed Goldman Sachs and Gresham Securities for the proposed demerger of Seqirus.

-Regis Resources ((RRL)) is considering AngloGold Ashanti’s 70% stake in Tropicana for $2.5bn.

-Allan Gray, 15% shareholder in SkyCity Entertainment Group ((SKC)) has rejected plans for a $200m equity capital raising.

-Details of 280k of TPG Telecom’s ((TPG)) iiNet customers have been stolen in a data breach.

-UAE consortium is seeking an extra four weeks or more to work through its own internal approvals for the Santos ((STO)) acquisition.

On the calendar today:

-NZ RBNZ rates

-JP July Trade Bal

-JP June machine orders

-EZ July CPI

-UK July CPI

-US July FOMC

-AUSTRALIAN CLINICAL LABS LIMITED ((ACL)) earnings report

-AMOTIV LIMITED ((AOV)) ex-div 22.00c (100%)

-APA GROUP ((APA)) earnings report

-ALLIANCE AVIATION SERVICES LIMITED ((AQZ)) earnings report

-BREVILLE GROUP LIMITED ((BRG)) earnings report

-COMMONWEALTH BANK OF AUSTRALIA ((CBA)) ex-div 260c (100%)

-CORPORATE TRAVEL MANAGEMENT LIMITED ((CTD)) earnings report

-CLEANAWAY WASTE MANAGEMENT LIMITED ((CWY)) earnings report

-DGL GROUP LIMITED ((DGL)) earnings report

-DEXUS ((DXS)) earnings report

-EMECO HOLDINGS LIMITED ((EHL)) earnings report

-FLETCHER BUILDING LIMITED ((FBU)) earnings report

-HELLOWORLD TRAVEL LIMITED ((HLO)) earnings report

-HANSEN TECHNOLOGIES LIMITED ((HSN)) earnings report

-IVE GROUP LIMITED ((IGL)) earnings report

-ILUKA RESOURCES LIMITED ((ILU)) earnings report

-JAMES HARDIE INDUSTRIES PLC ((JHX)) earnings report

-LINDSAY AUSTRALIA LIMITED ((LAU)) earnings report

-LIFESTYLE COMMUNITIES LIMITED ((LIC)) earnings report

-MICROBA LIFE SCIENCES LIMITED ((MAP)) earnings report

-MAGELLAN FINANCIAL GROUP LIMITED ((MFG)) earnings report

-NATIONAL STORAGE REIT ((NSR)) earnings report

-RETAIL FOOD GROUP LIMITED ((RFG)) earnings report

-REGION GROUP ((RGN)) earnings report

-RYDER CAPITAL LIMITED ((RYD)) ex-div 5.50c (100%)

-STOCKLAND ((SGP)) earnings report

-SHAPE AUSTRALIA CORPORATION LIMITED ((SHA)) earnings report

-SUPERLOOP LIMITED ((SLC)) earnings report

-SILK LOGISTICS HOLDINGS LIMITED ((SLH)) earnings report

-SPARK NEW ZEALAND LIMITED ((SPK)) earnings report

-SMART PARKING LIMITED ((SPZ)) earnings report

-SERVICE STREAM LIMITED ((SSM)) earnings report

-SANTOS LIMITED ((STO)) earnings report

-STEP ONE CLOTHING LIMITED ((STP)) earnings report

-SOUTHERN CROSS ELECTRICAL ENGINEERING LIMITED ((SXE)) earnings report

-TRANSURBAN GROUP LIMITED ((TCL)) earnings report

-LOTTERY CORPORATION LIMITED ((TLC)) earnings report

-VICINITY CENTRES ((VCX)) earnings 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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