ASX 200 trims gains; jobless rate rises; Cochlear, Origin sink; Telstra, Treasury Wine profits fall; Nufarm tumbles

AUD rises on 'quite tight' jobs market. Cochlear, Origin sink on profit miss . Telstra rises despite profit fall. Treasury Wine lifts on China boost. Goodman dips on mixed results. Nufarm tumbles on earnings downgrade.

Results and commentary from a number of major ASX listed businesses are driving equity investor sentiment this week. Picture: Gaye Gerard

Welcome to the Trading Day blog for Thursday, August 15. The ASX 200 index closed 0.2 per cent higher to 7865.50 points, trimming earlier gains after jobs data was released. US indexes closed higher on cooler July inflation data.

The Aussie dollar is near US66.19c at 5.05pm AEST.

Updates

4:58 pm August 15, 2024

ASX 200 ends up 0.2pc after jobs data, earnings reports

David Rogers

Australian shares rise for a fifth day running as the global risk rebound continues after reassuring US economic data and the BoJ's recent pivot away from hikes.

The S&P/ASX 200 ends up 0.2 per cent at a two-week high of 7865.5 after rising to 7898.7. It's 3 per cent above the August low. Resistance is forming at 7900.

US retail sales data are in focus Wednesday as investors weigh recession risks against the chance of Fed rate cuts starting next month as inflation cools.

Banks lend support with Westpac and ANZ up 1.6 per cent after CBA's results this week showed stronger than expected net interest margins and capital return.

Telstra adds 2.1 per cent, NRW Holdings jumps 9.7 per cent, Magellan climbs 7.6 per cent and Treasury Wine adds 2 per cent after reporting.

AGL rises 4.6 per cent and Pro Medicus adds 5.7 per cent on upgrades.

Ramsay Health Care climbs 3.5 per cent on takeover speculation.

But the ASX 200 fades intraday amid sharp falls in iron ore miners and reporting companies including Origin, Cochlear and Goodman.

Rio Tinto dives 3.6 per cent as Singapore iron ore futures hit a 21-month low of $US93.70 as China's July steel output falls 9 per cent on-month and year.

Origin dives 9.4 per cent, Cochlear falls 7.3 per cent and Goodman loses 1.3 per cent after reporting. Pilbara Minerals slips 3.9 per cent after flagging a $560m scrip-based takeover bid for Latin Resources. Nufarm dives 9.8 per cent on its report.

4:33 pm August 15, 2024

ASIC bans Victorian director for deleting books

Joseph Carbone

The Australian Securities and Investments Commission has disqualified a Victorian director, Richard Andrew Sparreboom for the maximum period of five years for "serious misconduct".

Mr Sparreboom was director of two companies, Spark Logistics and Hedgehog Logistics, both of which have entered administration.

In its investigation, ASIC found Mr Sparreboom had — across both companies — failed to lodge tax returns, deleted books and fabricated false records, make payments not in the best interest of the companies and continue to trade while insolvent.

Companies directed by Mr Sparreboom owe almost $10m to 178 unsecured creditors and $1.2m to staff in unpaid wages, super and leave entitlements.

2:56 pm August 15, 2024

Taxpayers to fund Rex through administration: King

Robyn Ironside

The federal government has offered a short-term fix for failed airline Rex, as administrators search for a buyer.

Transport Minister Catherine King said the government would guarantee regional flight bookings for Rex customers throughout the administration process.

Ms King said it meant travellers could "continue to book regional flights on Rex with certainty they would either fly or get their money back".

1:04 pm August 15, 2024

Bell Financial's profit up 50pc

Valerina Changarathil

Broker Bell Financial Group will reward investors with a higher 4c per share interim dividend after profit jumped 50 per cent to $16.6m in the first half to June 30.

Revenue rose 18 per cent to $138.7m, reflecting an improved performance in its retail & institutional broking business, combined with ongoing momentum in its technology & platforms and products & services businesses.

The dividend, which is up 33 per cent on the prior corresponding period, will be paid on September 10.

12:57 pm August 15, 2024

Jobs resilience 'a thorn in the side' for inflation

Valerina Changarathil

The resilience of the labour market is a "thorn in the side for lower inflation", says VanEck investments and capital markets head Russel Chesler.

"While the recent CPI print showed annual inflation tracking inline with expectations, it’s difficult to see how it can fall much further if services inflation – which is being propped up by the hot jobs market – doesn’t come down," he says.

Annual wage growth continues to tick upwards. Job ads, while showing signs of a pullback earlier this year, increased slightly in July, according to Seek.

The unemployment rate edged higher to 4.2 per cent last month, even as the economy added 58,200 new jobs — almost triple consensus estimates.

"Australia's path has taken a sharp turn from the US," he says, where overnight data showed a continued fall in inflation to 2.9 per cent – the first time that number has come below 3 per cent since early 2021 – signalling a rate cut in September.

"Australia’s journey, beset by many roadblocks, is going to take a lot longer."

12:51 pm August 15, 2024 Highlight

Iron ore price hits 21-month low

David Rogers

Iron ore prices drop to 21-month low as news from China remains bleak.

Singapore iron ore futures were little changed at US$95.60 a tonne after falling 2 per cent to $US93.70. Australian iron ore miners including BHP, Rio Tinto and Fortescue were down 0.5-1.3 per cent in afternoon trading with Fortescue weakest.

China's steel production in July fell 9 per cent on-month and year to 82.94 million tonnes. Output for the first seven months of 2024 fell 2.2 per cent on-year.

It comes after Baowu Steel Group chairman Hu Wangming warned that China's steel industry faces a crisis worse than the downturns of 2008 and 2015.

Baowu is the world's biggest steel maker.

12:45 pm August 15, 2024

Magellan lifts on profits rise

Joseph Carbone

Shares in investment group Magellan lift 8 per cent-plus on a 2 per cent lift in profits and the purchase of a stake in Vinva Holdings.

Magellan posted a $177.9m profit in FY24.

The company earlier on Thursday announced a purchase of 29.5 per cent of investment group Vinva for $138.5m.

Macquarie analysts have an underperform rating on Magellan, saying they "still believe it's too early in the turnaround to step up to the plate" and lowered the target price to $8.20 per share, down from $8.40. Jarden analysts were neutral, with a target of $9.50.

MFG last at $10.49 per share, up 8.1 per cent.

12:40 pm August 15, 2024

Soft results, weak guidance hit Origin

Valerina Changarathil

Origin Energy's share price is under pressure after its soft FY24 earnings and weak energy markets guidance.

Shares are trading 9.4 per cent weaker at $9.60 at 12.30pm AEST.

UBS analyst Tom Allen expected a selldown after the results, which were impacted by higher than forecast costs in the energy markets business and APLNG.

"While buy-side were expecting weaker FY25 Energy Markets than consensus, the mid-point of guidance is 13 per cent lower than consensus," he said in a note to clients.

"While FY25 will see earnings reset lower, Origin reiterates that it sees structural tailwinds into the outlook via its gas-fired generation and competitive advantage on gas supply…"

11:54 am August 15, 2024

Shares trims gains as bond yields rebound on jobs strength

David Rogers

Australia's stock market further trims its intraday rise as bond yields and the Aussie dollar rebound on overall stronger than expected July jobs data.

The S&P/ASX 200 index is up 0.1 at 7861.6 points near midday after rising as high as 7898.7. It trimmed half its intraday rise before the jobs data and continued to retreat after the ABS said the data show the jobs market remains "quite tight".

Australian 3 and 10-year bond yields and the Aussie dollar erase intraday falls as the swaps market trims the amount of RBA rate cuts expected over the next year.

Employment growth exceeded estimates for a second consecutive month but the unemployment rate unexpectedly rose on the back of a record participation rate.

11:40 am August 15, 2024 Highlight

Telstra ‘would support’ News Corp over Foxtel future

Eric Johnston

Telstra boss Vicki Brady said she would support whatever decisions are made around Foxtel’s future ownership. Telstra is the 35 per cent partner in Foxtel with the majority stake owned by News Corp (the owner of this publication).

Last week, News Corp boss Robert Thomson said there had been third party approaches for the pay-TV and streaming platform, but it was too early to say it would result in a sale. Thomson said the approach had prompted a review of the longer-term ownership of the business, although News Corp sees a strong future for the business.

"As was made very clear last week, that (process) is at a very early stage, and there's been no decisions at this stage," Telstra's Brady told investors earlier Thursday.

"I would say as we look at Foxtel, we've been a long term shareholder in that business with News Corp. What's been really pleasing to see is how (Foxtel CEO) Patrick (Delaney) and the team have really transformed that business over the last few years."

Brady says the addition of the Kayo streaming business has made "such a difference to where Foxtel was many years ago".

"From our point of view, if it got to the stage where there was an offer for Foxtel at the right level of value, then, yes, we would be supportive of that with News Corp.

"Just to be clear on Foxtel, we're not at that stage."

Earlier Thursday, Telstra posted a 7.5 per cent increase in underlying full year profit to $2.3bn. The headline result was down 12.8 per cent after being hit with $750m in writedowns.