Trending On Livewire: Weekend Edition - Saturday 3rd August

Good morning,

We’ve recently updated the Weekend Edition of Livewire’s daily newsletter. We’re focusing on the best-performing content from the week and some of our favourite wires from contributing experts. Let us know what you think.

Welcome to the weekend - and boy, has it been a busy one for traders! This week saw the start of ASX Reporting Season. Rio Tinto (NYSE: RIO) pushed higher following its in-line result while ResMed (ASX: RMD)  and Credit Corp (ASX: CCP) shareholders were treated to a real rollercoaster. But the party really gets started next week with some big names all gearing up to face investors - and in some cases, the music.

Speaking of music, the RBA was probably in a 'Celebration' mood following Wednesday's cooler-than-expected inflation print. The 0.8% quarter-on-quarter trimmed mean figure means the next interest rate decision will likely not be a hike.

Finally, the Federal Reserve hinted they are ready for rate cuts as soon as September. But even without the first cut, markets have already started a huge rotation of capital away from large and mega-cap stocks into small-caps. Which reminds me… that’s what this week’s episode of The Rules of Investing is about. And it’s worth a listen.

Hans Lee
Senior Editor, Livewire Markets

The Rules of Investing: How to dominate small caps like Roger Federer dominates tennis

In tennis, just as in investing, it's the points that you win that matter. After all, Roger Federer played 1,526 singles matches throughout his career, and while he only won 54% of the points within those matches, he walked away with the win 80% of the time.

Ausbil Investment Management's Arden Jennings is focused on his winning points. While he had a similar mix of winners and losers, like Roger, during FY24, his focus on his winners helped his funds top the performance charts. So, where is the Roger Federer of Australian small caps seeing the most opportunity today? Find out in this episode of The Rules of Investing.

Ally Selby, Livewire Markets ∙ 21 min episode

LISTEN TO THE PODCAST

More on small caps:

Buy Hold Sell: 5 stocks likely to surprise to the upside this reporting season

It's not shaping up to be an easy reporting season, with weakening consumer sentiment and business conditions, as well as a softening labour market, taking a toll on Australia's listed companies. And while analysts believe earnings will disappoint this August results season, they also argue that earnings will rebound over the year ahead.

With this in mind, Livewire's Ally Selby was joined by Marcus Today's Henry Jennings and Market Matters' James Gerrish for their analysis of three stocks that could beat consensus predictions for their earnings result this August. Plus, they also nominate a stock that they believe will crush it with an earnings beat.

10:32 min episode

FULL EPISODE

MORE ON Reporting Season:

• The one question these investors want answered this ASX reporting season • 4 min video

Top 3 Wires this Week

1. Christopher Joye: How investors can prepare ahead of a second "humiliating" RBA rate hiking cycle
   The Coolabah Capital Investments Co-Founder and CIO also tells us why he thinks the RBA will be "humiliated" into more rate hikes • 21 min interview
   
2. Goldman and Macquarie's predictions for the August reporting season
   The brokers have quashed hopes of a positive reporting season, although it's not all doom and gloom when it comes to the year ahead • 5 min read
   
3. Dividends and cash flow are key to long-term returns. Here’s 2 stocks that fit the bill
   This shareholder yield strategy is set to thrive as the Great Rotation takes hold, explains Epoch Investment Partners' Kera Van Valen • 7 min read
   
   

From our Experts

• Bumper gold price finally starts to flush out near-term producers
  Barry Fitzgerald, Independent Journalist ∙ 4 min read
  
• The biggest change in mining in 100 years: Miners as Fund Managers
  Richard Gannon, GP Partners ∙ 6 min read
  
• Trump or Harris? Who cares! These commodities will do well regardless
  James Cooper, Fat Tail Investment Research ∙ 4 min read

Carl’s Chart of the Week: Market pricing 3 interest rate cuts By Christmas 2025

Better than expected June CPI inflation data has flipped market pricing for Australian interest rates over the next 18 months on its head.

The Australian stock market surged to a new high as most economists are now calling the RBA will stand pat when it meets to decide on its official cash rate on Tuesday next week.

But, it gets even better. As seen by the chart above, not only have markets completely factored out any possibility of further RBA rate hikes, but they’re also now factoring in as many as three 0.25% cuts by December next year.

See Why 3 Rate Cuts Are Expected by Christmas 2025

Weekly Poll

We mentioned in the introduction to this newsletter that several major companies report next week. Now, we want to hear from you. Of the following reporting names, which do you think has the biggest potential to surprise? (To the upside or downside)

• Arcadium Lithium (ASX:LTM)
• Avita Medical (ASX:AVH)
• Life360 (ASX:360)
• REA Group (ASX:REA)
• QBE (ASX:QBE)
• Nick Scali (ASX:NCK)

VOTE NOW

Meme of the Week

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