ASX 200 to fall, Nvidia tops earnings expectations + Pilbara Minerals, MinRes to report
ASX 200 futures are trading 19 points lower, down -0.25% as of 8:30 am AEDT.

S&P 500 SESSION CHART

ASX TODAY
- ASX 200 futures point towards a weak start but a lot of variables at play including major miner earnings and better-than-expected results from Nvidia
- Companies due to report today include Flight Centre, Deterra Royalties, Fortescue, Lovisa, MinRes, Qantas, Tabcorp, Nine Entertainment, ReadyTech, The Reject Shop and more
- Mineral Resources reports 1H24 statutory net profit of $518m, down 33%
- Pilbara Minerals reports 1H24 net profit after tax of $220m, down 82.3%
- Corporate Travel downgraded to Neutral from Buy at Citi, target cut to $17.55 from $22.55
- Domino’s Pizza downgraded to Neutral from Outperform at Macquarie, target cut to $42 from $48
- Iluka Resources upgraded to Overweight from Neutral at Barrenjoey, target increased to $8.40 from $7.20
- Lottery Corp downgraded to Hold from Add, target unchanged at $5.40
- Wisetech Global downgraded to Neutral from Overweight due to valuation concerns, target increased to $82 from $80
- Woolworths downgraded to Hold from Add at Morgans, target cut to $34.70 from $39.45
- MinRes selling 14.5% of Azure Minerals (AFR)
- Sayona Mining shareholder launches $60m block trade (AFR)
- French building materials giant Saint-Gobain lobs $4.3bn bid for CSR (AFR)
MARKETS
- S&P 500 rallied in the last 30 minutes of trading to finish slightly higher
- Bonds yields higher across the curve, both 2-and-10 years closing near 3-month highs
- Nvidia released its earnings after market close – Q4 revenue of US$22.1bn (8% beat), adjusted gross margin of 76.7% (130 bps beat) and adjusted EPS of $5.16 (11.4% beat)
- Nvidia expects 1Q24 revenue of US$24bn, well above expectations of US$21.9bn
- Nvidia shares currently up around 6% in after hours
- Markets have priced out more than 75 bp worth of rate cuts from peak easing expectations but still looking for 90 bps of rate cuts this year
- January FOMC minutes stressed the need to hold rates until the data brought greater confidence that inflation was moving sustainably towards the 2% target, participants remained highly attentive to inflation risks, some worried disinflation progress could stall
STOCKS
- Nvidia options positioning implies 10.6% share swing post earnings (Bloomberg)
- Nvidia faces high earnings bar following stock rally (Reuters)
- Hedge funds pare exposure to Magnificent 7 megacap tech stocks in Q4 (Bloomberg)
- Intel discloses forecast to overtake TSMC in making fastest chips this year (Reuters)
CENTRAL BANKS
- Fed's Barkin says US has 'ways to go' on soft landing and hot January data made things more difficult (Bloomberg)
- Fed Governor Bowman says time to cut rates 'certainly not now' (Bloomberg)
- Fed's Daly reiterates that patience, says "to finish the job will take fortitude" (SF Fed)
- Options data shows some investors hedging against chance of a rate hike (Bloomberg)
- BoE to start cutting rates in Q3, most likely August (Reuters)
- BoK expected to leave rates unchanged on Thursday (Bloomberg)
GEOPOLITICS
- EU and Biden set to impose major sanctions on Russia for Navalny's death (Bloomberg)
- Russia has regained the initiative and put Zelensky on the back foot (Bloomberg)
- Trump likely to consider two-step process to sharply lift China tariffs (Nikkei)
- China avoids US tariffs by shipping more goods via Mexico (FT)
ECONOMY
- Japan export rebound tops forecasts, underpinned by shipments of autos and chipmaking equipment (Reuters)

The Lithium Scenes
The sector is not as hype as before but some wild things have happened in the past 24 hours.
- MinRes Managing Director Chris Ellison sold a 14.5% stake in Azure Minerals, valued at $230 million. Ellison was happy to exit at $3.42 per share or a 7.6% discount instead of waiting a few more months until the scheme is implemented. How strange.
- Sayona flagged a $60m (1.1 billion shares or around 11% of the company) block trade after market close on Wednesday. Sources suggest the seller was Piedmont Lithium. Maybe they need the cash?
- Chinese lithium prices briefly hit limit up of 10% in early trade on Wednesday (but finished the session only 3.5% higher)
- Pilbara Minerals, MinRes and IGO are due to report first-half results today
Buckle up.
Woolworths Earnings Call Highlights
Woolworths (ASX: WOW) had its worst day since December 2021 after a softer-than-expected set of half-year earnings. The weakness was compounded by a smaller-than-expected interim dividend, an unexpected CEO departure and a cautious outlook. The stock finished the session down 6.6% to a 12-month low. You can find my summary of the results here as well as some of the nuggets from its earnings Q&A below.
- Wage (+6.3%) and other costs led to a ~9% cost growth in the Australian food business
- The $480 million cost of doing business growth was half due to wage inflation and volume/mix drivers accounted for ~40% of cost growth
- Productivity agenda ahead of expectations but the focus is on fundamental improvements rather than just cutting costs
- Gross margin benefited from eCommerce growth (larger baskets with more long-lasting products), investments in Everyday Rewards, telco business rebranding, etc
- Big W's future strategy includes cautious underlying investment approach; every store lease renewal will be critically evaluated based on performance
Wisetech Earnings Call Highlights
Wisetech (ASX: WTC) had one of those results where you knew the stock was going to open high and close even higher. Underlying net profit for the first half was up 5% to $128.4 million or 12% ahead of Citi estimates and its 7.7 cents per share interim dividend was 33% of Citi estimates. It reaffirmed its full-year guidance but upped its margin guidance range. The stock opened 5.6% higher and finished up 11.2%.
- Volume growth in CargoWise is on trend, with a slight uptick towards year end
- Less than 10% of overall CargoWise growth comes from market
- First half revenue was $500.4 million, up 32%, and CargoWise revenue up 40%
- Product development releases have been delayed into FY25, affecting revenue projections for that year
- Capitalisation rate has increased by 86% over the last year to $71.6 million due to significant pipeline of new products.
- Integration of Blume and Envase acquisitions has been quicker and more cost-effective than expected due to Wisetech's global scale capabilities
- EBITDA margin for FY26 to be above 50%, driven by revenue growth and operating leverage rather than high capitalisation rates
KEY EVENTS
- Trading ex-div: Deterra Royalties (DRR) – $0.149, Whitehaven Coal (WHC) – $0.07, JB Hi-Fi (JBH) – $1.58, Bendigo and Adelaide Bank (BEN) – $0.30, Virgin Money (VUK) – $0.038
- Dividends paid: 5G Networks (5GN) – $0.02, Dexus Industria REIT (DXI) – $0.04, Dexus Convenience Retail (DXC) – $0.05
- Listing: None
- 9:00 am: Australia Manufacturing and Services PMI (Feb)
- 8:00 pm :Eurozone Manufacturing and Services PMI (Feb)
This Morning Wrap was written by Kerry Sun.
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