ASX 200 Live Updates – Monday, 18 August

ASX Live Coverage – August 18

Welcome to our live coverage of the Australian Securities Exchange (ASX) for Monday, August 18. We’re trialling this new format, with frequent updates expected throughout the day, wrapping up around 2:00 PM AEST. Don’t forget to refresh this page manually for the latest updates and we welcome your feedback on improving this service.

A2 Milk’s FY25 Results: Mixed Signals

[8:49 AM] A2 Milk’s full-year results for FY25 provided a mix of positive metrics and cautious guidance, presenting a complex landscape for investors. Here are the key highlights:

• Revenue rose by 13.5% to NZ$1.90 billion, slightly above estimates of NZ$1.89 billion.
• EBITDA increased by 17.1% to NZ$274.3 million, surpassing predictions of NZ$271.6 million.
• Net Profit After Tax (NPAT) climbed 21.1% to NZ$202.9 million, beating estimates of NZ$201.2 million.
• Dividends: The final dividend is set at 11 cents per share, culminating in a full-year dividend of 20 cents, exceeding Citi’s forecast of 18.7 cents.
• A noteworthy special dividend of NZ$300 million has been announced, pending regulatory approval.
• However, FY26 guidance for NPAT is set at NZ$202.9 million, which misses the NZ$228 million estimates by 11%.
• Revenue guidance for FY26 is expected to be in the “high single digits,” while EBITDA margin guidance is between 15% and 16%, falling short of Citi’s prediction of 16.2%.

Additionally, A2 Milk has disclosed the acquisition of Yashili New Zealand Dairy for NZ$282 million on a cash-free and debt-free basis. Overall, the results reflect robust FY25 figures overshadowed by cautious guidance for the upcoming year.

Source: ASX Announcement | Company page: A2 Milk (A2M)

Strong US Retail Sales

[8:42 AM] In the United States, retail sales rose by 0.5% month-on-month in July, slightly below the expected increase of 0.6%.

• Broad-based Strength: Nine out of thirteen categories showed growth, with notable increases in motor vehicle sales and online shopping, driven by events from major retailers like Amazon, Walmart, and Target.
• Shift in Spending: While expenditures on essentials like cars and furniture remained strong, a significant decline in spending at restaurants and bars indicates weakening demand for discretionary services.
• Consumer Sentiment: Retail figures indicate a solid start to Q3, yet consumer sentiment as per the University of Michigan has unexpectedly dipped, hinting at fragile confidence amidst tariff and employment uncertainties.
• Price Impact: It is essential to note that the sales figures are unadjusted for inflation, which may mean some increases reflect higher prices rather than actual volume growth. Import costs for apparel and household goods have surged significantly, marking the fastest increase since early 2024.

Bank of America Predicts Stock Declines

[8:39 AM] Analysts from Bank of America warn of the potential for US stock declines in response to dovish signals from the Federal Reserve during the upcoming Jackson Hole economic symposium. The salient points include:

• “Buy the Rumour, Sell the Fact”: A dovish statement from Fed Chair Jerome Powell could lead to profit-taking among investors, despite recent market optimisms.
• Increased Risk Appetite: There has been a marked shift towards riskier assets, with significant inflows into equities, cryptocurrencies, and corporate bonds, driven by expectations of Fed easing.
• Record Highs: The S&P 500 has gained approximately 30% since its low in April, bolstered by performance in tech stocks, reaching new all-time highs.
• Inflation Signals Mixed: Recent Consumer Price Index (CPI) data has supported expectations for a rate cut, although Producer Price Index (PPI) figures have tempered these predictions. Still, there is a 92% probability ascribed to a rate cut in September.
• Investor Movement: US equity funds recorded inflows of $21 billion in the week ending August 13, reversing the previous week’s outflow, with global equity inflows amounting to $26 billion, suggesting a robust year for equities.

Source: Bloomberg

Market Outlook

[8:32 AM] The ASX 200 futures have dipped by 53 points (-0.59%) following a subdued overnight session, with the S&P 500 down by 0.29% and the Nasdaq declining by 0.40%.

Today promises significant corporate earnings announcements, with results anticipated from various companies including A2 Milk (A2M), Audinate (AD8), Ampol (ALD), Aurizon (AZJ), Bluescope Steel (BSL), among others.

If you’re just joining us, make sure to catch up with our Morning Wrap for an overview of today’s events.