Key themes, sector-by-sector expectations and tactical watch-points for the month ahead
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Grady Wolf, senior market analyst at Beldirect, flags a “pivotal” August as companies deliver FY24 numbers and FY25 guidance. Expect low-single-digit earnings growth across the market, with margin defence and capital allocation the decisive factors for share-price reactions.
Macro & market backdrop
- ASX 200 rose 8.1 % last week, driven by a 5 % surge in Materials and Healthcare that offset weakness in Financials and Consumer Services.
- All Ordinaries added 1 %, led by a 42 % spike in Kaix and tempered by Imuene’s 22 % slide.
- US payrolls (Tue) and the Fed decision (Thu) headline the external calendar; markets price a hold.
Sector-by-sector playbook
Financials – profit-taking in progress
- CBA fell from $190 to $173 (-9 %) as investors rotate out of richly-valued defensives.
- Valuation: CBA’s trailing P/E of 33× vs sector 19×; catalysts now NIM trajectory, credit provisions and FY25 guidance.
- Watch: CBA chart for a break below $170 as confirmation the bull run has peaked.
Consumer Staples – crowded long, vulnerable to disappointment
- Woolworths and Coles have rerated on “flight to safety”; modest earnings growth risks a sell-the-fact reaction.
Technology – growth must justify multiples
- Global comps: Netflix beat EPS yet fell 3 % post-result.
- Domestic tech (e.g., TechnologyOne, recently downgraded) needs to show accelerating ARR and margin expansion.
- Upside surprise candidates: cloud, cyber-security and digital-payments names with offshore revenue.
Retail & Discretionary – margin squeeze evident
- Profit warnings already out from Accent Group and Adairs; consensus expects low-single-digit EPS growth.
- Outperformers likely to be online retailers with lean inventory and strong cost control.
Materials – green-energy metals vs iron-ore drag
- Copper leveraged to energy-transition demand; iron-ore subdued on weak China stimulus.
- BHP and Rio Tinto: green-diversification (potash, lithium) may cushion headline earnings misses.
- Chart pack:
Healthcare – mixed bag, ResMed stands out
- ResMed’s sleep-apnea momentum and new partnerships underpin a high-quality result.
- Elsewhere, cost inflation and pricing pressure remain headwinds.
Key risks to monitor
- Inflationary cost creep and higher interest rates eroding operating leverage.
- Supply-chain disruptions in tech and retail.
- China slowdown weighing on bulk-commodity demand.
- US tariff exposure – watch for quantified impacts in guidance statements.
- Guidance withdrawal: a silent cue for uncertainty and likely sharp negative re-rating.
Client flow snapshot (Beldirect)
- Most-traded single stocks: CBA, BHP, Neuren Pharma, Fortescue, Pilbara Minerals, Mesoblast.
- ETF flows: Vanguard Australian Index ETF, Vanguard US Total Market, AUD-hedged US shares, Vanguard Australian Shares High-Yield ETF.
Action checklist for investors
- Review portfolio exposure to banks; trim on any relief rally above $175–$180 for CBA.
- Focus on companies with pricing power and disciplined capital management.
- Watch copper-leveraged miners and global-facing tech for potential upside surprises.
- Diarise every Wednesday and Friday in August for Beldirect’s rolling video updates.
Stay disciplined, stay selective, and keep risk management front-of-mind as the numbers roll in.