How much would the ASX fall if CBA returned to a ‘normal' valuation?
But what would happen if the country's biggest lender was back to so-called normal valuations? MST Marquee strategist Hasan Tevfik has crunched the numbers and says the S&P/ASX 200 would fall 5 per cent.
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Perth Now
2 hours ago
- Perth Now
Wall Street rises on September rate cut hopes
The benchmark S&P 500 and the Nasdaq have hit record highs, underpinned by gains in megacap companies as investors were increasingly confident that the Federal Reserve could restart its monetary policy easing cycle next month. Signs that US tariffs on imports have not fully filtered into headline consumer prices came as a relief for investors this week as they scour for insights on the effect trade uncertainty has had on the economy. Despite data showing underlying price pressures were on the rise, markets also factored in recent weakness in the job market and a shake-up at the Federal Reserve as they leaned in favour of a potential dovish move by the US central bank in September. Traders are fully pricing in a 25 basis points interest rate cut, according to the CME's FedWatch Tool, up from 89.2 per cent last week. The central bank last lowered borrowing costs in December. "We're pretty much certain that we'll have at least 25 basis points of rate cuts in the month of September," said Thomas Hayes, chairman at Great Hill Capital LLC in NY, and noted that the Fed would have to respond to labour market weakness. In early trading on Wednesday, the Dow Jones Industrial Average rose 379.32 points, or 0.86 per cent, to 44,839.44, the S&P 500 gained 28.17 points, or 0.44 per cent, to 6,474.20 and the Nasdaq Composite gained 84.32 points, or 0.39 per cent, to 21,766.23. Ten of the 11 S&P 500 sectors were higher, led by consumer discretionary that gained 1.1 per cent, with and Tesla up more than 1.5 per cent each. The blue-chip Dow was less than 1.0 per cent away from an all-time high and the Russell 2000 index, which tracks rate-sensitive small-cap companies, added 0.8 per cent to hit a six-month high. "Rates coming down will also help (small-cap companies) refinance their debt loads, which is very positive for a lot of the laggard stocks that haven't moved as much in this big move off the April lows," Hayes said. The CBOE volatility index, popularly referred to as Wall Street's fear gauge, dropped to 14.46 - its lowest since January. Later in the day, investors will scrutinise remarks of a number of policymakers, especially Chicago Fed president Austan Goolsbee - a Federal Open Market Committee voting member this year. Earnings are also in focus. CoreWeave, which is backed by Nvidia, slumped 12 per cent after the AI data centre operator reported a bigger-than-expected quarterly net loss. Eyes are also on developments surrounding the China revenue-sharing deal the US government signed with chipmakers like Nvidia and Advanced Micro Devices, which the White House said could be expanded to others in the sector. Nvidia was flat while Advanced Micro Devices rose 5.8 per cent. Paramount Skydance jumped 19 per cent and is up over 24 per cent this week. The company won exclusive broadcasting rights to the Ultimate Fighting Championship for seven years earlier this week. In geopolitics, Donald Trump and European leaders are expected to hold a virtual meeting on the Russo-Ukraine conflict, two days before the US president meets Russian President Vladimir Putin. Advancing issues outnumbered decliners by a 3.82-to-1 ratio on the NYSE and by a 2.45-to-1 ratio on the Nasdaq. The S&P 500 posted 32 new 52-week highs and two new lows while the Nasdaq Composite recorded 110 new highs and 36 new lows.
News.com.au
6 hours ago
- News.com.au
ASX slumps as CBA financial results disappoint investors
Australia's sharemarket slumped on Wednesday as investors sold off CBA, Computershare and AGL shares on disappointing financial results. The benchmark ASX 200 dropped 53.70 points, or 0.60 per cent, to 88271.0 while the broader All Ordinaries lost 47.20 points, or 0.52 per cent, to 9103.10. Australia's dollar is trading 0.23 per cent higher, buying 65.44 US cents. Overall, six of the 11 sectors gained, but falls in the utilities and financials offset gains out of materials, healthcare and consumer staples. The drag on the market was led by CBA, with the heavyweight pulling down the entire market, due to being almost 12 per cent of the index. Shares in Australia's largest company plunged 5.41 per cent to $169.12 on its latest profit announcement. The fall comes despite Australia's largest bank saying improving household budgets helped drive it to a monster $10.25bn profit. CBA will also pay out a final dividend of $2.60 per share, taking total dividend payouts for the year to $4.85, which is a new record high for the bank. Despite announcing strong profits, the bank, which has seen its share price climb 30 per cent over the year, was priced for perfection, with analysts saying the result did not match the valuation. IG market analyst Tony Sycamore said CBA was being dumped due to its lofty valuations. 'The falls come as the market continues to question its lofty valuation and as the RBA's rate-cutting cycle reduces the ability of the bank to leverage its large deposit base and as margins are compressed,' he said in a market note. CBA dragged the rest of the financial sector down. NAB shares fell 2.63 per cent to $38.16, Westpac dropped 2.11 per cent to $33.90 and ANZ slipped 0.19 per cent to $31.87. While the banks sold off, the major miners and healthcare shares gained. The miners were boosted by rising iron ore futures prices on the back of China steel production curbs in the north, adding to tightening global supply. BHP gained 1.14 per cent to $41.73, Rio Tinto added 0.96 per cent to $117.84 and Fortescue jumped 1.37 per cent to $19.93. Healthcare heavyweight CSL gained 1.98 per cent to $269.55, while Cochlear was up 0.43 per cent to $313.29 and Ramsay Healthcare added 0.60 per cent to $38.81 on a strong day for the sector. In other company news, Australia's largest winemaker, Treasury Wine Estates, told the market it was lifting its dividends as well as buying $200m worth of stock as part of its latest company announcement. The business said revenue grew by 6.5 per cent to $2.99bn for the 12 months until June 30, while net profit after tax soared 342 per cent to $437m due to one-off items that dragged down last year's performance being removed. Shares rose 1.18 per cent to $7.72. Computershares fell 3.78 to $39.75 after announcing revenue dropped 5.6 per cent to $3.1bn for the year to June 30. Profits rose 72 per cent to $607m. AGL shares plunged 13.11 per cent to $8.88 after the power generation company said there would be a steeper-than-expected 21.2 per cent drop in profits to $640m.
News.com.au
6 hours ago
- News.com.au
Closing Bell: ASX feels the pinch as investors make bank on CBA shares
Commonwealth Bank shares fall 5pc on yearly results ASX falls from near all-time highs as sell down bites Weakness in utilities and major resource stocks undercuts resistance CBA leads sell down Commonwealth Bank (ASX:CBA) lifted net profits 7% to $10.13 billion, cash profit 4% to $10.25 billion and net interest margin (the gap between interest paid and interest received) increased 0.09% to 2.08%. Australia's favourite bank to splash money at is even offering a total yearly fully franked dividend of $4.85 per share. Apparently, that's just not enough. CBA's shares fell 5.1% today, sliding to $169 per share by the end of trade. Unfortunately for the broader market, Commonwealth Bank is currently our biggest stock by value. It's worth about 12% of the total share market. The ASX 200 consequently shed 0.61% or 53 points, now 0.71% below our all-time high. Even though si of 11 sectors moved higher today, CBA's losses meant the broader ASX finished in the red. Analysts are pointing to the bank's oversized valuation compared to earnings potential (30-times) and some early warning signs of retail banking weakness as the main culprits. Most Aussie stocks carry a price-to-earnings ratio of about 20-times, with our major banks averaging closer to 15-times. No wonder CBA's mammoth ratio is raising some eyebrows. 'We think the market might be disappointed around guidance for FY26 and the lack of signs of acceleration in the key retail segment,' UBS analyst John Storey said. With the ASX reaching all-time highs over the last couple of days, and UBS maintaining a 'sell' rating at a price target of $120, conditions are ripe for some profit taking. The other banks didn't fare particularly well either. National Australia Bank (ASX:NAB) fell 2.6%, Westpac (ASX:WBC) 2.1% and QBE Insurance (ASX:QBE) 1.5%. Energy and resource companies drag CBA isn't the only culprit of today's weakness, of course. AGL Energy (ASX:AGL) is also dragging utilities lower, shedding 13% after its profits fell 21%. The electricity and gas supplier is pivoting into batteries, citing falling profits in the hydrocarbon-based energy sectors. Investors appear unconvinced. While the greater materials sector moved higher today, two of its heavyweights also fell on the wrong side of the balance sheet. Pilbara Minerals (ASX:PLS) slid 6.5% and Mineral Resources (ASX:MIN) 4.6%, neglecting to offer the market any support. Now, let's take a look at which stocks did manage some upward momentum despite the sell down. ASX Leaders Today's best performing stocks (including small caps): Code Name Last % Change Volume Market Cap SFG Seafarms Group Ltd 0.002 100% 4509571 $4,836,599 OD6 Od6Metalsltd 0.068 94% 17549697 $5,616,378 BIT Biotron Limited 0.004 60% 19931164 $3,318,115 BMM Bayanminingandmin 0.13 51% 6993476 $9,391,665 BUY Bounty Oil & Gas NL 0.003 50% 203786 $3,122,944 AVE Avecho Biotech Ltd 0.007 40% 24342972 $15,867,318 CYQ Cycliq Group Ltd 0.007 40% 4050928 $2,302,583 CHM Chimeric Therapeutic 0.004 33% 5329334 $9,763,676 JAY Jayride Group 0.004 33% 762596 $4,283,667 RGL Riversgold 0.004 33% 1399329 $5,051,138 1TT Thrive Tribe Tech 0.009 29% 8359117 $711,105 SPL Starpharma Holdings 0.145 26% 1936112 $48,095,850 LIO Lion Energy Limited 0.015 25% 1563384 $5,426,013 THB Thunderbird Resource 0.015 25% 4046244 $4,676,897 THR Thor Energy PLC 0.01 25% 847068 $5,863,919 VEN Vintage Energy 0.005 25% 1075795 $8,347,655 FUL Fulcrum Lithium 0.062 24% 144944 $3,775,000 BCK Brockman Mining Ltd 0.022 22% 778498 $167,044,178 OEC Orbital Corp Limited 0.33 22% 3590728 $44,490,524 G11 G11 Resources Ltd 0.017 21% 3652235 $13,532,710 AXE Archer Materials 0.34 21% 1233874 $71,357,164 CP8 Canphosphateltd 0.08 21% 344036 $20,246,195 CRI Critica Ltd 0.018 20% 39857308 $40,472,732 STN Saturn Metals 0.45 20% 1417716 $172,522,583 JAV Javelin Minerals Ltd 0.003 20% 238288 $15,630,562 In the news… OD6 Metals (ASX:OD6) is celebrating the production of a mixed rare earth carbonate product of about 56% total rare earth oxides and a mixed rare earth hydroxide product of 59% TREO using feedstock from the Splinter Rock project. Management says the results are a major milestone for the project, demonstrating a simplified and scalable heap leach flow sheet process is suitable for producing high-quality, low-impurity rare earth products. Bayan Mining and Minerals (ASX:BMM) had to stave off an ASX price query as its shares jumped today, swiftly releasing a project update for its rare earth, gold and lithium assets. BMM's share price is likely benefiting from increasing interest in US-based rare earth projects like its own Desert Star Project in California's Mojave Desert. The company is awaiting results from 65 rock chips and 30 heavy mineral concentrate samples from its latest field work there. Thor Energy (ASX:THR) has offloaded a 75% interest in its US non-core uranium and vanadium projects in return for cash and shares in a deal with Metals One PLC. THR is set to bank £100,000 in cash alongside £1 million in Metals One shares, with a 12-month exclusive option for Metals One to purchase the remaining 25% interest at a price to be agreed upon at a later date. G11 Resources (ASX:G11) is looking to buy several copper and gold projects through the acquisition of privately owned company Pacific State Metals (Holdings) Pty Ltd. G11 is awaiting shareholder approval for a share sale agreement that would see it acquire the Sedgwick Bluff copper-gold, Packsaddle gold-copper, and NW Cobar copper projects. ASX Laggards Today's worst performing stocks (including small caps): Code Name Last % Change Volume Market Cap GGE Grand Gulf Energy 0.001 -50% 31455 $5,640,850 BEL Bentley Capital Ltd 0.015 -42% 4318593 $1,979,326 DTM Dart Mining NL 0.002 -33% 21263802 $3,594,167 PRM Prominence Energy 0.002 -33% 255120 $1,459,411 SKK Stakk Limited 0.005 -29% 8192 $14,525,558 AQX Alice Queen Ltd 0.003 -25% 151531 $5,538,785 AYT Austin Metals Ltd 0.003 -25% 4674800 $6,336,765 MRQ Mrg Metals Limited 0.003 -25% 691143 $10,906,075 AQC Auspaccoal Ltd 0.008 -20% 7558757 $7,004,676 ARV Artemis Resources 0.004 -20% 350432 $14,328,361 OSX Osteopore Limited 0.008 -20% 8341781 $2,372,600 TMX Terrain Minerals 0.002 -20% 1446699 $6,329,536 VRC Volt Resources Ltd 0.004 -20% 27625 $23,424,247 OZM Ozaurum Resources 0.062 -17% 2193670 $17,182,640 SRK Strike Resources 0.029 -17% 150000 $9,931,250 EVE EVE Health Group Ltd 0.03 -17% 115684 $8,863,557 IXC Invex Ther 0.075 -17% 1332 $6,763,846 1AD Adalta Limited 0.0025 -17% 2078341 $3,463,949 FBR FBR Ltd 0.005 -17% 2494829 $34,136,713 GLL Galilee Energy Ltd 0.01 -17% 300000 $8,486,315 MRD Mount Ridley Mines 0.0025 -17% 323599 $2,335,467 SPQ Superior Resources 0.005 -17% 7554456 $14,225,896 TMK TMK Energy Limited 0.0025 -17% 12258062 $30,667,149 BVS Bravura Solution Ltd 2.02 -17% 13434796 $1,085,016,685 FNX Finexia Financialgrp 0.17 -15% 145035 $12,460,793 In Case You Missed It Petratherm (ASX:PTR) has appointed a head of project development to advance technical studies at the Rosewood titanium project in SA. To drive the next phase of exploration, Waratah Minerals (ASX:WTM) has raised $30m in a placement, targeting extensive drilling at its emerging Spur gold-copper discovery. Perpetual Resources' (ASX:PEC) drilling at the Igrejinha project in Brazil's Lithium Valley indicates the mineralised strike at the SE anomaly may extend to more than 300m. Locksley Resources (ASX:LKY/ OTCQB: LKYRF) is preparing for extensive mapping later this month at Mojave, adjacent to the only producing rare earths mine in the US. Antipa Minerals (ASX:AZY) has appointed industry veteran Neil Warburton as a non-executive director to its board. Kingsland Minerals' (ASX:KNG) metallurgical test work at the Leliyn asset has made a significant breakthrough in identifying the potential to produce a gallium by-product. DigitalX (ASX:DCC) has unveiled an ambitious plan to expand its Bitcoin holdings from approximately 500 BTC to 2,100 BTC by the end of 2027. Childcare's evolution: Inside the education shift reshaping Australia's $15 billion early learning sector. Last Orders Albion Resources (ASX:ALB) has been issued the equivalent of $1.4m in Capricorn Metals (ASX:CMM) shares under a binding agreement for the sale of the Mongers Lake project in WA, bringing total consideration received to $1.5m. There's potential for another $1.5m in additional payments should CMM field a JORC mineral resource of more than 75koz and initiate a standalone mining operation on the project. Trading Halts Adelong Gold (ASX:ADG) – Challenger Gold Mine JV dispute Bayan Mining and Minerals – price query EPX Limited (ASX:EPX) – cap raise Falcon Metals (ASX:FAL) – cap raise Siren Gold (ASX:SNG) – cap raise Somerset Minerals (ASX:SMM) – cap raise At Stockhead, we tell it like it is. While OD6 Metals and Albion Resources are Stockhead advertisers, they did not sponsor this article.
