Josh Gilbert, lead analyst for APAC at eToro Group Ltd (Unlisted (US):ETRO), shares his two things to watch in Australia in the coming days.
Earnings season wrap
Aussie earnings season is done, and the results overall were better than what many investors would have expected going in.
The Big Australian was the standout, roaring its way back to the biggest company in Australia. BHP saw underlying profit jump 30% to US$13.2 billion and copper delivered more than half of group earnings for the first time in the company's history. The supermarket titans both proved you can hold prices down and still grow profit, with Coles lifting underlying earnings 13.7% while shelf prices rose just 1.5%. Meanwhile, at Woolworths, Amanda Bardwell managed to get shoppers back through the door, helping to lift underlying net profit 15.4%. Even Qantas, which took an A$420 million hit from the Middle East conflict and higher fuel costs, saw its shares rise on the day thanks to the rest of the business keeping moving forward and telling us its customers are prioritising travel over other discretionary spending.
It’s not all rosy across the ASX, though. JB Hi-Fi posted record sales of A$11.06 billion and still had its worst day in years. WiseTech grew revenue 79% and still fell, thanks to headline controversy and FY27 guidance indicating to investors that growth is now coming from efficiency rather than sales. Meanwhile, CSL rallied on a US$2.6 billion reported loss, simply because expectations had fallen so far that a better-than-feared result was enough to give it a boost.
The biggest takeaway was that Australia has a pickier consumer and that AI advancements are forcing corporate Australia to get leaner, and it seems to be working. Cost discipline showed through, and while the consumer is still turning up at supermarkets and airports, they’re not out buying laptops and sofas.
With reporting season done, the bad news is that September is the ASX's worst-performing month on average over the last twenty years. The earnings catalyst has faded, and a wave of stocks go ex-dividend this week, marking prices down by what's about to be paid out. Add the Middle East conflict grinding on, oil staying elevated and inflation stubborn enough to likely force another RBA hike, and seasonality isn't the only thing working against the market this month.
Apple product launch
Apple takes the stage on September 9 for the biggest launch it has run in years, and it is the first under new chief executive John Ternus, who took over from Tim Cook last week. The company is expected to unveil its first foldable iPhone alongside the full rollout of Siri AI and a push into smart home devices, which puts both of Ternus's challenges on the table in the same week.
The foldable is the one to watch. A foldable at a premium price tells you whether Apple can still make people pay up for a genuinely new iPhone, which matters because the iPhone still does just over half of Apple's revenue, US$210 billion of the US$416 billion the company made last financial year. Beyond the foldable, Apple's pipeline is reported to include AirPods with cameras, smart glasses, a tabletop robot for the home and a touch-screen MacBook. If Cook's decade was about services, Ternus's looks like it'll be about devices. The plan is to get more Apple products into more rooms, which is why the board handed the job to a hardware engineer rather than an AI name.
Siri AI is the other watch point. Apple deploys it at scale this month as a proper competitor to the chatbots, and the ambition is eventually to charge for it or earn from third-party apps plugged into it. This will be a big focus for the street, because Siri has spent a decade building a reputation for not doing what you ask it to. The question is whether it arrives with a price attached or it runs for free, because a free assistant means Apple carries the running costs with no revenue against it. Investors haven’t been impressed with the lack of movement in AI over recent years, but Apple has been written off for being late plenty of times before, and it has usually been the wrong call.
History hasn’t been kind to investors around product launches. In four of the last five September iPhone events, Apple shares fell in the fortnight leading into the event, and in three of those they kept falling afterwards. This year has a slightly different feeling, though. A new CEO and a genuinely new product rather than just an incremental upgrade. Shares have rallied 21% this year, and it’s trading at 35x forward earnings, so there’s little room for a disappointing launch. The hope will be that this isn’t buy-rumour, sell-the-news.