ASX200 Afternoon Report August 10th 2022

The ASX200 trades 25 points lower at 7004 at 3.20 pm Sydney time.

The ASX200 is set to post its eighth consecutive daily close, 30 points on either side of the key 7000 level, as traders digest the latest round of earnings reports and brace for tonight's critical U.S inflation data.

Adding to trader inflation angst, while the market is expecting the sharp fall in gasoline prices to see the annual inflation rate fall to 8.7% (from 9.1% YoY), the core inflation rate, which strips out the volatile price categories of food and energy is expected to rise from 5.9% to 6.1% YoY.

While there are questions around which matters most to the market, core or headline inflation, there is little doubt that higher-than-expected prints will see equity markets sell-off as the interest rate market firms up the odds of a 75bp rate hike at the September FOMC meeting.

Weighing on the local tech sector, a 1.3% fall in the Nasdaq overnight as chipmaker Micron followed up on Nvidia's warning yesterday of lower demand for chips and falling revenues. As well as, an earnings miss from Computershare sent its share price 5.35% lower to $24.08. Elsewhere Life360 fell 6.25% to $4.79, Afterpay owner Block fell 5.43% to $117.37, and Megaport gave back a good chunk of yesterday's gains, falling 4.6% to $8.59.

The share price of Bio-Tech giant CSL fell 1.67% to $292.02 as it confirmed it had completed its acquisition of Vifor Pharma. Ansell fell 3.92% to $25.99; Sonic Healthcare fell 2.5% to $34.00; Cochlear fell 2% to $220.09, rounding out a tough day for healthcare stocks.

CBA shares have fallen 0.2% to $101.05, despite reporting a 9% increase in Full Year profits to $9.6bn. However, as was also witnessed after NAB's Q3 trading update yesterday, the market took a dim view of a contraction in CBA's Net Interest Margins (NIM), which fell 18bp to 1.9%. Elsewhere, ANZ added 3.3% to $23.45, Westpac added 1.45% to $22.22, NAB added 1.25% to $30.19 and Macquarie fell -0.7% to $176.88.

The share price of Coronado Global added another 6.25% today to $1.70 following its bumper earnings report yesterday. Fellow coal miner Whitehaven coal added 3.63% to $6.28, New Hope coal added 3.35% to $4.16, and Yancoal added 2.86% to $5.04. BHP fell 0.70% to $38.57 as its upside progress was capped by sellers operating ahead of resistance at $40.00. Rio Tinto added 0.2% to $99.57 and FMG added 0.53% to $19.06.

The share price of the beleaguered A2Milk has plunged by 7.63% to $4.72 along with its hopes of selling infant formula in the U.S after the Food and Drug Administration (FDA) deferred its application. The company is set to report Full Year earnings on August 29th.

Technically, we remain on the sidelines in the local bourse as U.S equity markets appear to have commenced a pullback.

Source Tradingview. The figures stated are as of August 10th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

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