Good afternoon and welcome to the ASX Today for Wednesday, I’m Jon Davidson. It looked like we were in for a flattish green day, best case after Wall Street had a lacklustre session overnight, but to kick off February earnings season down under, the Australian market had a big surprise in store.
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Aussie ‘Mag2’ constituent Commonwealth Bank (ASX:CBA) had a very good day, up +8% as its latest earnings report helpfully blew analyst expectations out of the water. While BHP (ASX:BHP) had recently reclaimed its position as #1 stock by market cap Down Under, from today that’s no longer the case.
The world’s most expensive bank stock is back to levels we last saw in November CY25, which wasn’t far off its October-era all-time highs. (A valuation that almost not a single analyst in Australia thought of as rational, but one largely perceived as due to foreign investment inflows.)
To this day, not a single broker rates the stock a buy, at least according to publicly accessible data, but we’re learning more and more lately that fundamentals might not matter anymore.
So thanks to Commonwealth, the mood in the room divorced itself from Wall Street, which is always nice to see, because we are, in fact, our own country.
That divorce mightn’t last. Overnight, we get U.S. unemployment data for January, already having been delayed, and that’s widely perceived as what Wall Street is waiting for, thus a tepid evening. Overnight Friday, we get U.S. inflation data – so by Monday, we’ll probably be very Ameri-centric once more.
Elsewhere on Australian markets, rare earth Neodymium prices are back to COVID-19-era three-year highs, and as of yet, we’re not seeing a surge of enthusiasm in REE stocks, probably because the silver slump and gold’s pause at the US$5,000/oz level has given some pause. One to watch.
Looking at local stocks, CSL (ASX:CSL) lost a lot of blood Wednesday as its latest earnings report went the opposite direction as CBA; the blood plasma giant is now where it was in 2018. I’ve often said I thought it was weirdly high.
Elsewhere, James Hardie (ASX:JHX) appears to have gotten its groove back after a well-received earnings report on Wednesday. While overall sales contribution was fairly slim, its $14 billion buyout of AZEK last year appears not to have been a complete disaster, and shorts on the stock have more or less vanished.
Finally, Electro Optic Systems (ASX:EOS) pared back on Wednesday after Tuesday’s reply to the short-selling firm Grizzly Research saw some life kicked back into the defence tech stock; what I make of that is that nerves have kicked back in again, and the market’s waiting to see what happens next.
That’s The ASX Today for Wednesday, I’m Jon Davidson, have a great night.
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