Table of Contents
ASX Market Update – Wednesday, April 22
Welcome to our live coverage of the ASX for Wednesday, April 22. Expect a flurry of updates before the market opens, with ongoing insights throughout the day. We’ll conclude our coverage around 2:00 PM AEST.
Cochlear Adjusts FY26 Profit Outlook Due to Market Challenges
8:58 AM
Cochlear has significantly revised its FY26 underlying NPAT guidance downward by approximately 33%. The company cited disappointing sales in developed markets for cochlear implants, uncertainty in the Middle East, the strength of the Australian dollar, and restructuring costs as contributing factors.
- Revised NPAT Guidance: Adjusted to $290-330 million, down from the previous estimate of $435-460 million. This reduction results from a combination of volume declines, exchange rate impacts, margin constrictions, and restructuring expenses.
- Q1 Performance: Sales of cochlear implants in developed markets remained flat due to limited hospital capacities and fewer referrals for hearing aids.
- US Market Trends: Performance was stable until mid-February but declined in March, especially in Western Europe, where surgical waitlists and industrial actions affected operations.
- Foreign Exchange Impact: The appreciating Australian dollar is anticipated to cost about $25 million after tax in the second half of FY26.
- Emerging Markets: Despite weaknesses in developed regions, emerging markets are seeing robust demand growth. However, China faces challenges due to reimbursement changes expected to affect premium sales in the latter half of FY26.
Company Page: Cochlear (COH)
Iluka’s Q1 Production Falls Short of Expectations
8:56 AM
Iluka’s Q1 production fell well below estimates, particularly in zircon sand production, while both rutile and ilmenite output exceeded expectations.
- Production Figures: Total zircon-rutile-slurry (Z/R/SR) production was 47.6Kt, missing the expected 58.1Kt.
- Revenue: Achieved $147 million, compared to an estimated $158.3 million.
- Zircon Sand Production: At 10.5Kt, it significantly lagged behind the 35.6Kt expected due to the idling of the Cataby site and ongoing commissioning at Balranald.
- Sales Plans: Q2 is expected to have a more promising outlook with contracts for 50Kt of zircon, which reflects a price increase, though net gains are expected to be limited by rising logistics costs.
Company Page: Iluka Resources (ILU)
Gold Prices Plummet Due to Strong US Dollar
8:48 AM
Gold prices dropped by 2.1%, closing at US$4,719/oz, leading to a downturn for gold mining stocks. The VanEck Gold Miners ETF fell by 6.1%, and big names like Newmont lost 4.8%.
Gold Price Daily Chart (Source: TradingView)
New Zealand Inflation Data Surprises Markets
8:43 AM
New Zealand’s Q1 CPI increased by 3.1%, surpassing predictions and prompting markets to anticipate a July rate hike by the RBNZ.
- Inflation Rate: The figure exceeded the consensus of 2.9% and matches Q4 2023’s rate.
- Future Estimates: The RBNZ expects inflation to rise to 4.2% in the current quarter, with inflation returning to target levels pushed back to mid-2027.
- Non-Tradable Inflation: Remains stagnant at 3.5%, indicating persistent domestic pressures.
Strait of Hormuz Faces Severe Supply Disruption
8:41 AM
Commercial traffic through the Strait of Hormuz has nearly halted due to a dual blockade by Iran and the US.
- Supply Chain Impact: Vessels are restricted mainly to a narrow lane due to Iranian approval, leading to significant disruptions in oil supply.
- Data Discrepancies: Actual transit numbers may be underestimated as vessels turn off tracking systems, complicating supply assessments.
Fed Hearing Highlights Agenda of Change
8:39 AM
Kevin Warsh outlined an ambitious agenda during his Senate Banking Committee hearing aimed at reforming the Federal Reserve, though his path to confirmation appears murky amid political challenges.
- Calls for Change: Advocated for significant changes within the Fed, including a shift away from traditional inflation measures and guidance strategies.
- Scepticism on Independence: Acknowledged concerns regarding his independence, particularly from Democratic senators.
- Confirmation Uncertainty: Challenges in the nomination process loom as some Republican senators condition support on unrelated investigations.
Optimism Grows for Q1 Earnings Season
8:38 AM
Major financial institutions like JPMorgan and Goldman Sachs project a more positive outlook for Q1 earnings, buoyed by investment in AI technologies.
- Revised Predictions: JPMorgan raised its year-end S&P 500 target to 7,600, citing strong early metrics.
- Solid Performance: 86% of companies reporting have exceeded consensus estimations, resulting in overall growth predictions of 13.2%.
Strong Consumer Spending Reported in the US
8:38 AM
US retail sales in March rose by 1.7%, indicating a robust consumer spending trend.
- Overall Sales Growth: Encouraging figures were seen across various sectors, including significant gains in gas station sales.
- Revisions Likely: This positive data could lead to upward adjustments in Q1 GDP forecasts ahead of the upcoming release.
Market Overview: As of 8:30 AM AEST, ASX 200 futures are down by 63 points (-0.70%), with major US benchmarks dipping amid market concerns surrounding geopolitical tensions related to Iran.
Stay tuned for further updates throughout the day as we track market movements and economic developments.
