Good morning, and welcome to another exciting day on the ASX! The market is set to open with a slight dip, as indicated by the ASX 200 futures dropping by 33 points, or 0.36%. But don't let that fool you - the overnight news was packed with some big stories that could move the market in either direction. Let's dive in and explore the key takeaways from the day's headlines.
ASX 200 Live: A Day of Contrasting Fortunes
A2 Milk: Riding the Wave of Growth
A2 Milk (A2M) is on a roll, delivering double-digit revenue growth for the fiscal year 2026, despite a setback in the fourth quarter due to supply chain disruptions in China. The company's infant formula sales grew by 5% in a flat Chinese market, while Other Nutritionals saw a 42% increase and Liquid Milk grew by 22% on ANZ and USA share gains. With a total FY26 dividend lifted to 21.0 cents and a special dividend of $300 million, A2 Milk is a shining example of how to navigate the challenges of a dynamic market. However, the company's FY27 guidance points to a softer margin, with revenue growth expected to be in the mid-single digits and EBITDA margin around 15%.
Aurizon: Diversifying its Portfolio
Aurizon (AZJ) is diversifying its portfolio with a recontracted major BMA coal haulage deal in Queensland. The rail operator has renewed its partnership with BHP Mitsubishi Alliance for metallurgical coal haulage, covering BMA's Goonyella Riverside, Broadmeadow, Peak Downs, Saraji, and Caval Ridge met coal mines. This deal, worth up to 37 million tonnes per annum, is a significant win for Aurizon, as BMA represents close to a quarter of the coal tonnes it carries in Queensland. The contract, with a term of up to 12 years, potentially running to 2040, is a testament to Aurizon's ability to secure long-term partnerships and diversify its revenue streams.
BlueScope: Riding the Wave of Strong US Steel Spreads
BlueScope (BSL) is riding the wave of strong US steel spreads and a record Southeast Asia result, with its underlying EBIT of $1.27 billion beating estimates by 0.5%. The company's reported NPAT surged by 857%, while its underlying NPAT grew by 0.25%. BlueScope's full-year guidance for 1H27 underlying EBIT is $860-960 million, which is a significant improvement over the previous estimates. However, the company's final ordinary dividend of 65 cents plus 70 cents special is unclear in comparison to the estimates of 165 cents.
GPT: Growing Management Earnings
GPT (GPT) is growing its management earnings as its portfolio NPI growth stays strong. The company's FFO of $338.8 million or 17.7 cents per security is in line with estimates, while its 1H26 distribution of 12.25 cents is also in line. GPT's investment portfolio like-for-like NPI growth of 5.8% is a testament to its ability to generate consistent returns. With a net tangible assets of $5.61 per security and a net gearing of 31.5%, GPT is well-positioned to continue its growth trajectory.
GWA: Operational Discipline Pays Off
GWA (GWA) is operational discipline pays off, with its normalised EBIT up 2.5% to $78.2 million and its margin up 0.3 percentage points to 18.5%. The company's statutory NPAT grew by 10.6% to $48.0 million, while its fully franked final dividend of 8.5 cents is a significant boost for shareholders. GWA's FY27 cash conversion is expected to be above the 80-85% target range, as the company proactively pulls forward inventory.
Imdex: Record FY26 Performance
Imdex (IMD) is posting a record FY26 performance, with revenue growth outpacing a soft exploration market. The company's normalised EBITDA up 29% to $163 million and normalised NPAT up 37% to $59 million are significant achievements. Imdex's share of wallet is a record $2.40 per $100 of exploration spend, up from $2.20 in FY25. The company's outlook is positive, with more growth levers available than at any time in its history.
Macmahon: Strategic Asset Sale
Macmahon (MAH) is selling down its Homeground village in a $20 billion Gladstone infrastructure play. The company has agreed to a partial sale of its workforce accommodation asset to Allcap Securities, retaining 80% initially and ongoing exposure to Homeground's performance. The deal is anchored to Project Velocity, an approximately $20 billion integrated freight and logistics program. Macmahon's rationale for the sale is to progressively realise value from Homeground while retaining meaningful exposure to its future performance.
S&P 500: Outlier Earnings Strength
The S&P 500 is experiencing outlier earnings strength, with second-quarter profit growth running well ahead of forecasts. The index's earnings up 31% in Q2 year-on-year is the best growth outside recession recoveries since 1992. The S&P 500's net income margins are approaching 16%, up from a prior ceiling around 14%, driven by tech and AI productivity gains. The market's full-year profit growth estimates have been lifted to 27%, and the average year-end target has been raised to 7,894 points.
Copper Squeeze: Deepening the Squeeze
The copper squeeze is deepening, with the LME spread hitting its highest since 2021. Spot copper is trading well above later-dated futures as LME stockpiles keep draining. The August contract hit a premium as high as $370 over September futures, while the cash-to-three-month spread reached $434 a ton. The LME's emergency measures to contain the spot rally have not been enough to ease the squeeze, which is fuelled by shipments to the US ahead of potential refined copper tariffs and tight Chinese feedstock.
Yen: Unwinding Bearish Bets
The yen is unwinding bearish bets after the US-Japan action, with leveraged funds keeping unwinding their bearish yen bets. The yen weakened about 1% this week to 159.35, erasing much of the official-action gains. However, the currency has clawed back most of its gains, with bullish pound bets built to the most since February and NZD shorts to the most since 2006.
Options Buying: FOMO Insurance
Options buying is driven by 'FOMO insurance' as the S&P 500 rallies to fresh highs. Demand for upside calls has outstripped demand for flat-market options for at least 170 S&P 500 stocks, the most since 2016. Institutions are buying bullish calls as 'FOMO insurance' to capture upside without committing full capital. The S&P 500 is up around 23% since late March, closing at another record on Thursday.
Berkshire: Equity Buying and Cash Pile
Berkshire (BRK-B) is equity buying and trimming its record cash hoard. The company added 17.5 million Delta shares and 48.1 million Alphabet shares, making them the third-biggest holding at $37.8 billion. Berkshire spent $6.8 billion on homebuilder Taylor Morrison and handed $10 billion to Alphabet to support AI investments. The company repurchased about $4.5 billion of its own stock and added a net $20 billion of other equities.
In conclusion, the ASX 200 is set for a day of contrasting fortunes, with some companies riding the wave of growth and others navigating the challenges of a dynamic market. As the market opens, investors will be keeping a close eye on the key takeaways from the day's headlines, looking for opportunities to capitalize on the market's ups and downs. Stay tuned for more updates as the day unfolds!
