Good morning. Brent crude rose 5.2 per cent to US$83.55 a barrel overnight after Iranian state news outlet Fars published draft terms for managing the Strait of Hormuz that would bar vessels from the United States and Israel, and a United States official rejected them within hours. Dearer oil feeds into inflation, so Treasury yields rose across the curve and futures moved further towards pricing a Federal Reserve increase at the September meeting. Wall Street gave ground on it, the Dow Jones Industrial Average down 0.9 per cent to 53,885 and its run of gains ended.
The Australian sharemarket went the other way in Thursday's session, closing at a record for the second day running, and it did so on the heaviest local results day of the week. REA Group, News Corporation and AMP all reported. One thread runs through both the market and the data: gold. Bullion's rally lifted the local gold miners to the top of the index, and a jump in gold exports was the single largest reason Australia swung back into a trade surplus in June.
The July United States employment report is released at 10.30pm AEST tonight. It is the first full read on the American labour market since the Federal Reserve held in July, and the number most likely to settle the September question.
The ASX 200 finished Thursday's session up 0.5 per cent at 9,272, a second consecutive record close, after touching 9,296.7 during the day. Ten of the 11 sectors rose and materials led, with gold miners Evolution Mining, Northern Star Resources and Newmont among the standouts. The Australian dollar eased 0.3 per cent to US70.35 cents.
The S&P 500 closed 0.2 per cent lower at 7,710 and the Nasdaq 0.1 per cent lower at 26,348, with memory and storage shares among the heavier fallers. The 10-year Treasury yield rose 5 basis points to 4.67 per cent while the 2-year sat at 4.18 per cent, widening the gap between the two to 49 basis points, and the US dollar index gained 0.3 per cent to 99.95. Gold rose 1.2 per cent to US$4,299 an ounce and the VIX fell 4.2 per cent to 15.15.
The Stoxx 600 rose 0.2 per cent to 658 and the DAX 0.1 per cent to 26,140, while the FTSE 100 fell 0.2 per cent to 10,868. EasyJet agreed to a takeover by Apollo valuing the airline at £5.7 billion, after a rival suitor withdrew, and Hikma Pharmaceuticals held its full-year outlook alongside a 9 per cent rise in first-half core operating profit. The euro eased 0.3 per cent to US$1.1525.
In the prior session, the Nikkei 225 closed 0.9 per cent lower at 65,683 and the Hang Seng 1.5 per cent lower at 25,530, while the Shanghai Composite rose 0.6 per cent to 3,900. The yen weakened 0.5 per cent against the US dollar to 158.40.
Exports rose $4,196 million, or 9.6 per cent, to $47,696 million. Non-monetary gold shipments drove it, up 60.2 per cent, with metal ores and minerals adding $839 million, or 6.2 per cent, and coal, coke and briquettes $290 million, or 4.6 per cent. Imports fell $100 million, or 0.2 per cent, as fuel and lubricants dropped $935 million, or 11.9 per cent, offsetting a $629 million rise in non-monetary gold imports.
The two governments are now at odds over the same class of project. The federal position applies to approvals for new facilities rather than to anything already operating, so it bears on how quickly data centre capacity can be added in Australia and on which generators supply it.
The most expensive quarter of the market is falling fastest, with upper-quartile values down 3.2 per cent over the three months to July. No consensus forecast is published for the Cotality Home Value Index.
Offshore wind is a central plank of Victoria's plan to replace generation as its coal plants retire, so a delay pushes the question of what fills the gap back onto gas and onto interstate transmission.
The federal government's position is that the tariff does not undermine the critical minerals agreement between Australia and the United States. Silicon is a feedstock for both solar polysilicon and semiconductors.
Under the memorandum of understanding signed on 17 June, Iran was to allow commercial vessels through the strait free of charge for 60 days and Washington was to lift its naval blockade of Iranian ships. Iran's foreign ministry says the strait will not reopen until the blockade ends. A United States official rejected the draft terms the same day, saying any temporary routes must carry no approvals, permissions, tolls or charges.
Two policymakers set out where they stand on the same day. Governor Lisa Cook said inflation is too high and that she is prepared to raise rates if needed, having voted to hold in July, naming tariffs, oil prices and artificial intelligence investment as the three shocks she is waiting to read. San Francisco Fed president Mary Daly said she fully supported the July hold but warned that rates may need to rise more aggressively if high inflation proves to be a broader problem.
Both readings point to a labour market that is holding, which is the backdrop for tonight's July payrolls report. The employment side of the Federal Reserve's mandate has not been what moved rate expectations this week.
A continuation fund is a manager selling assets out of one fund it runs into another it also runs, so the price is set by the manager and tested only by the incoming investors. Those investors declining the marks is a direct challenge to the carrying values in the selling fund. It follows the same firm capping redemptions on a private credit fund in June, when 14 per cent of holders sought to exit.
A single US$11 billion facility would rank among the largest private credit transactions completed. It shifts the exposure from regulated bank balance sheets to funds whose holdings are marked less frequently and are harder for outsiders to price.
The six include compliance and audit firms, the first time Beijing has sanctioned businesses that help enforce the Uyghur Forced Labor Prevention Act. China also suspended follow-up factory inspections by its certification bodies and opened national security investigations into imported office printers and copiers. It answers a United States ban last week on imports from 43 Chinese companies, and lands weeks before President Xi Jinping is due in Washington.
The central bank ended its easing cycle in May. That leaves one of the larger emerging economies stopped at 6.50 per cent while the Federal Reserve is still resolving whether its own next move is up.
Revenue was in line with the $1,790 million analysts expected, core earnings before interest, tax, depreciation and amortisation of $1,088 million beat the $1,060 million consensus, and core net profit beat the $637.3 million expected. The operating margin widened 3 percentage points to 61 per cent and the final dividend rose 25 per cent to $1.73 fully franked, taking the full-year payout to $2.97. The shares closed 3.8 per cent higher at $172.63, with the company flagging softer listings volumes into fiscal 2027.
Revenue beat the US$2.25 billion consensus and adjusted earnings beat the US$0.24 expected. Total segment earnings before interest, tax, depreciation and amortisation rose 31 per cent to US$423 million, the company's highest fourth-quarter figure, and full-year revenue was US$9.03 billion, up 7 per cent. Digital Real Estate Services, the segment that holds the group's majority stake in REA Group, contributed segment earnings of US$222 million, up 46 per cent, on revenue of US$553 million. The shares rose about 1.3 per cent in United States after-hours trading.
The result landed inside the $170 million to $180 million range AMP guided to when it upgraded first-half expectations in July, against $131 million in the prior corresponding period. Statutory net profit was $154 million, up 57 per cent, and the interim dividend is 3.0 cents a share, 20 per cent franked. The buyback follows a $150 million programme completed in June. The shares closed about 6 per cent higher on Thursday.
It is the second such arrangement at a large ASX company reported inside a week. Qantas was reported on Monday to be in discussions with Accenture over an artificial intelligence outsourcing arrangement that could remove up to 1,000 Australian roles.
The approach follows an executive order President Trump signed on Thursday setting out trade actions to protect United States polysilicon manufacturing, the detail of which the White House has not published. Neither company has told the ASX what commitments, if any, are under discussion.
Adjusted earnings of US$3.24 a share beat the US$2.85 to US$2.89 analysts expected, and adjusted earnings of US$3,951 million were more than double the US$1,793 million of a year earlier, on a 36 per cent rise in the realised oil price to US$62.33 a barrel. Production of 2.248 million barrels of oil equivalent a day came in above the top of guidance, with the Permian Basin above 900,000 a day for the first time. Ryan Lance moves to executive chair after 14 years as chief executive and Konnie Haynes-Welsh becomes chief financial officer, both changes effective 1 September. This is the company's strongest quarterly profit since 2022, and it came from price rather than from volume. arcpoint could not confirm a closing share-price reaction.
The guidance came alongside a strong quarter: fourth-quarter revenue of US$8.97 billion with non-GAAP earnings of US$39.25 a share, data centre revenue up 103 per cent on the prior quarter to US$2.98 billion, and full-year sales of US$20.2 billion against US$7.4 billion a year earlier. Chief executive David Goeckeler told the call the company expects personal computer and smartphone unit shipments to fall by the mid-teens in per cent terms this calendar year, partly offset by rising storage capacity per device. arcpoint could not confirm the individual closes for Micron, SanDisk and Western Digital.
Revenue was in line with the roughly US$3.58 billion expected, while diluted earnings of US$1.37 a share, up 33 per cent, beat the US$1.26 FactSet consensus. Third-quarter revenue is guided to US$4.69 billion to US$4.77 billion, and full-year guidance moved to at least mid-teens revenue growth with an adjusted EBITDA margin of at least 35.5 per cent, with the company citing strong demand across all regions. The shares rose about 9 per cent in after-hours trading.
The unlock lifts the freely tradable portion of the company from 4.9 per cent of shares outstanding to 11.8 per cent, and the tranche is about 43 per cent larger than the 638.9 million shares floated in June. A further 319 million shares can unlock on 12 August, with more tranches in September and October. The stock was trading below its issue price going into the expiry.
Revenue came in above the US$664 million to US$665 million the company had guided to for the quarter, with chief executive Matthew Prince citing record growth in total paying customers, large customers and developers. arcpoint could not confirm a closing share-price reaction.
Koray Kavukcuoglu takes over day-to-day management of Google DeepMind. Senior researchers Jeff Dean, Sanjay Ghemawat, Oriol Vinyals and Quoc Le have left to start a public benefit corporation, Discovery Loop. Hassabis retains his role leading drug discovery business Isomorphic Labs.
“Inflation is too high, and I consider the risks to the inflation side of the dual mandate higher than the risks to the employment side at this point. I am prepared to act by raising rates, if necessary.”
“I was completely supportive of the decision to hold rates in July.”
“The Strait of Hormuz is an international waterway and no party controls the lanes or the ability to transit through them. Any temporary routes will be without any impediments, meaning no approvals or permissions and no tolls or charges.”
“I don't see this as a bubble kind of situation. What we're seeing is a very high level of excitement, enthusiasm around new technology, around AI.”
“The inflation outlook for next year is not anything that we're fearful of. In fact, we can absolutely manage it. But as always, our first line of defense is productivity.”
“Directionally, you are right in Q2, with about 2.5% decline on the consumption. July, just to put in perspective, we were about minus 1%. So there is already an improvement that we observed in July.”
For wholesale clients only. Prepared by Arc Point OCIO Pty Ltd (ACN 693 569 765), Corporate Authorised Representative (CAR 1319046) of Capella Advisory (AFSL 550125), for wholesale clients within the meaning of the Corporations Act 2001 (Cth); it is not intended for, and should not be relied on by, retail clients. This note is factual market reporting and general information, with any arcpoint view clearly labelled as such. It is not personal advice and does not take into account any person's objectives, financial situation or needs. Information is drawn from sources believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not a reliable indicator of future performance.
Sources: Yahoo Finance, FRED, RBA, company filings.