ASX finishes flat as mining rally offsets falls elsewhere, markets eye stage 3 tax tweaks — as it happened

Today appeared to be a day of portfolio reallocation across the ASX, rather than investors sinking in new money.

The mining sector jumped 1.2%, led by many of the lithium, nickel and rare earths miners that have struggled recently, with gold miners also surging.

The big iron ore miners also had a positive session, with BHP and Fortescue up 1.2% and Rio Tinto up 1%.

The mining sector appears to have been a beneficiary of reports that China is about to launch a stock market stabilisation fund worth around 2 trillion yuan ($425 billion).

Not that Chinese stocks were beneficiaries, with the Shanghai (-0.6%) and Shenzhen (-1.5%) markets both down and Hong Kong only 0.8% higher today after a recent torrid run.

Real estate and utilities also both gained 0.9% on the Australian market, while energy eked out a 0.1% rise.

But the money going into those sectors appeared to flow out of  consumer staples (-0.7%), healthcare (-0.6%), technology (-0.5%), financials (-0.4%), industrials (-0.3%) and consumer cyclicals (-0.3%).

Healthcare technology firm Nanosonics was by far the biggest loser on the ASX 200, slumping 33.4% on a trading update that clearly shocked investors.

The big profit result out before the local market opens tomorrow will be Tesla's fourth quarter results. Scroll down for some analyst comments ahead of that.

Sam Yang will join you tomorrow morning to dissect that and the rest of the overnight market action.

Until then …

One to watch out for after US trade closes, so around about when our blog gets up and running tomorrow morning — Tesla will unveil its fourth quarter results.

Traders probably won't be as concerned with the profit numbers for the quarter just ended as they are for the outlook for 2024 from the company and its CEO and major shareholder Elon Musk.

Dan Ives from Wedbush Securities says analysts like himself will be particularly interested in Tesla's pricing plans, after it slashed prices and its profit margins last year to try and boost sales growth.

"Musk and Tesla faces a key strategic decision ahead: Keep cutting prices with a glut of EVs and competition flooding the industry … or hold serve and maintain price and margin stability for 2024 through this softer EV demand storm," he argues.

"Which pricing path Tesla takes will be a foundational move for the future of Tesla over the coming years in our view."

He's calling for Tesla to set a line in the sand for its margins on tomorrow's conference call, but is still optimistic about the company's long-term future, with an "outperform" rating and $US350 price target.

It last traded at $US209.14 and its shares have lost almost 16% of their value since the start of this year and are worth about half of their peak value above $US400 in November 2021.

My Parliament House colleague Jake Evans has a story on the Liberal Party's response to reports that the Albanese government will tweak the stage 3 tax cuts, originally passed in 2018 and added to in 2019 by the Turnbull and Morrison governments respectively.

The Opposition has vowed to unpick any changes the government makes to the tax cuts, due to take effect on July 1 this year, if it is returned to government.

Shadow Minister for Foreign Affairs Simon Birmingham, who was finance minister in the previous government, said the stage 3 cuts fit into a package of reforms that had been carefully calibrated to address years of bracket creep.

"There are twice as many Australians in the top [$180,000] income tax bracket today than when the threshold was set for that bracket," Senator Birmingham said.

"If it's not changed, more and more Australians will be pushed up into that tax bracket over the years to come … you might be a little bit better off today, you likely will be worse off in the long run."

My colleagues Dannielle Maguire and Brooke Chandler have put together this explainer on what the currently legislated stage 3 tax cuts look like.

It's working on my PC and my Android phone.

But if anyone else is having trouble with this function, please let me know so I can raise it with our techs.

Some good work from Peter Martin at The Conversation, explaining why so many of us feel even worse off than the inflation figures suggest we should.

"Way back in the late 1990s, more than a quarter of a century ago, the consumer price index used to actually reflect the cost of living. It included all of the big costs incurred by households including — importantly — mortgage interest payments, which at the time accounted for an average of $5 of every $100 each wage earner spent.

"Then in September 1998, in response to representations from the Reserve Bank and the Treasury, the bureau changed the way it calculated the index, excluding mortgage and other interest payments in a decision it acknowledged would make the index worse at measuring living costs."

Including mortgage interest payments, "living costs" are up 9 per cent for the average working household.

Read more on the ABC website.

Companies listed on the ASX are just about to report their latest half-year earnings, mostly during February.

Ahead of reporting season, we generally have what's known as confession season — that's where companies with (often unpleasant) surprises fess up early as part of continuous disclosure obligations.

Nanosonics is a victim of one such confession.

It's reported a 13.4% drop in sales of new units, compared to the same period a year earlier and a 22.5% drop in upgrade sales to existing customers.

That's seen revenue drop 2.4% to just under $80 million, while costs were up 12%.

The combination of the two is expected to see pre-tax profit for the half year to December 31, 2023 more than halve compared to the same period a year earlier, from $11.4 million to $4.9 million.

The manufacturer of disinfection equipment for ultrasound probes says hospital budgetary constraints have been behind the falling sales, but it is hoping the second half of the financial year will be better.

"Based on the company's current sales pipeline and the opportunities for ongoing pipeline growth in both new installed base and upgrades, the company is expecting both capital unit and revenue growth in H2 over H1 and is currently undertaking a detailed review of the full year outlook," noted CEO Michael Kavanagh in an ASX release.

"Further, we are also reviewing a number of additional customer offerings to support our customers to upgrade capital units earlier without impacting the longer term value of a trophon unit."

The company says it is also pushing ahead with preparing its US Food and Drug Administration submission for approval of an endoscope reprocessing technology it is developing.

Investors were not impressed, with Nanosonics shares down 33% to $2.93 by 12:50pm AEDT.

Your correspondent owns a small parcel of Nanosonics shares that he has held for many years.

• ASX 200: Flat at 7,514 points
• Australian dollar: Flat at 66.52 US cents
• S&P 500: +0.3% to 4,865 points
• Nasdaq: +0.4% to 15,426 points
• FTSE: Flat at 7,486 points
• EuroStoxx: -0.3% to 472 points
• Spot gold: -0.1% to $US2,028/ounce
• Brent crude: +0.1% to $US79.64/barrel
• Iron ore: +2.4% to $US132.10/tonne
• Bitcoin: +1.7% to $US39,856

Price current around 12:30pm AEDT

Live updates on the major ASX indices:

The ASX is basically a story of two markets today — resources are surging ahead, up 1.2%, while most other sectors are being sold-off.

It seems like many investors are selling down some of their other holdings to pile into the resources rally.

In particular, some of the lithium, nickel and other miners of commodities linked to the renewable energy transition are rebounding following recent heavy losses.

On the flip side, healthcare, tech, consumer stocks and financial firms were generally on the nose, including the big four banks.

The biggest loser was ultrasound probe disinfection company Nanosonics, off 33.2% on a trading update (more on that in a follow up post soon).

Overall, about half of the top 200 stocks are trading higher, with 91 in the red.

That's left the overall ASX 200 index up just 1 point at 7,516.

While Netflix subscribers might have been cranky about a crackdown on password sharing, the streaming service hasn't lost subscribers because of it.

In fact the opposite.

Netflix just reported its full-year earnings, and with it a 13 million subscriber surge (well ahead of the company's forecast for 8.7 million net addition), bringing its worldwide total to 260.3 million.

The company said it saw subscriber growth in all regions, adding 2.81 million households in the US and Canada; 5.05 million in Europe, the Middle East and Africa region; 2.35 million in Latin America; and 2.91 million in the Asia Pacific region.

The company also reported a 12.5 per cent year-over-year revenue increase.

For the December quarter, Netflix posted revenue of $US8.8 billion, slightly ahead of the company's forecast of $US8 billion.

Profits were $US1.976 billion, or $US2.11 a share, four cents below the company's forecast.

In its shareholder letter, Netflix said it expects "healthy double digit revenue growth" in the coming year and "continued record membership growth".

The company is aiming to grow its ads business, it says, with the aim of making it "a more substantial revenue stream".

We also learned this morning that Netflix, which has previously said it's keen to invest in live programming, has struck a deal to start exclusively broadcasting World Wrestling Entertainment's (WWE's) hit wrestling show Raw.

The stock was up as much as 6 per cent in after-hours trading immediately following the earnings report.

Supermarket giant Woolworths says it's not trying to "cancel" Australia Day as it grapples with the backlash from its decision not to sell Australia Day merchandise.

It's taken out newspaper ads today to explain to the public why it took those steps.

CEO Brad Banducci spoke to the ABC's Sabra Lane on AM this morning, defending the decision but admitting they could have done a better job of explaining it.

"We could have done a better job of landing our message at the beginning."

Concerningly, Mr Banducci says there's been a 50% increase in rudeness and aggression towards staff because of the decision to drop the stock.

The Australian share market has opened higher, with the ASX 200 up 0.2% to 7530 points, with materials and energy the best performing sectors.

Iluka Resources is the top performing stock, up 7.3%. It released its quarterly report yesterday, detailing progress on a number of mining projects around the country.

Infection prevention company Nanosonics Limited is the worst performing stock, down 35.1% following the release of a trading update after markets closed yesterday. Citi analysts this morning said they believed it was vulnerable to potential for increased competition as a one-product company.

• ASX SPI futures: +0.1% at 7495 points 
• ASX 200: + 0.2% 7530 points 
• Australian dollar: 65.8 US cents 
• Wall Street: Dow Jones -0.24%, S&P 500 +0.25%, Nasdaq +0.43%
• Spot gold: -0.03% to $US2,028/ounce
• Brent crude: -0.41% to $US79.73/barrel
• Bitcoin: +1.45% to $US39,725

Figures updated at 10:30am AEDT

Live updates on the major ASX indices:

As the Albanese government meets to discuss changes to stage 3 tax cuts, industry groups have been weighing in.

Four of Australia's major employer organisations have collectively called on the government to honour its promise to implement the stage 3 tax cuts in full from July 1.

"The Stage 3 tax cuts have not only been legislated: they have won support at two general elections."

In a joint statement, the Australian Industry Group, Australian Chamber of Commerce and Industry, Business Council of Australia and Minerals Council of Australia laid out their case for keeping the cuts as planned, including economic and political arguments.

The letter states that delivering on the cuts would help "demonstrate that governments can make and keep promises".

"Tinkering at the edges would mean a promise has been broken."

The four groups argue the reduction in marginal tax rates on personal income will boost workforce participation, productivity and living standards. 

"A further boost will come from the sharp reduction in the difference between personal income tax rates and the rate of income tax paid by companies.  This is particularly important for small and family-owned businesses where effort will be redirected towards business (and employment) expansion rather than on navigating between different rates of tax applying to income flowing from different forms of business organisation."

The group said the stage 3 cuts could be left in place while the government provided additional cost of living relief to those in need.

It remains to be seen whether the government will heed these calls from the heavyweight industry bodies — but it might be too late.

Right now, news reports seem to indicate the government is already discussing how it will make changes to the tax cuts.

We should know more in the next few hours or day — and we'll certainly keep you updated here on the business blog.

It's earnings season in the US, so let's take a look at some of the major US companies whose results were out overnight.

Wall Street is holding its record high, thanks in part to strong results from some companies (but also due to hopes the Fed will start to cut rates), with drops in others weighing down some indexes.

Procter & Gamble's shares grew 4.6% after they posted a stronger quarterly profit than expected.

United Airlines jumped 6.3% after it also reporter stronger profit. Though the US airline warned it may lose money in this year's first quarter due to the groundings of its Boeing 737 MAX 9 planes. Executives said they're now weighing alternative plans — and rethinking the company's order for a whole bunch of new MAX 10s.

Here's what United's chief financial officer Michael Leskinen said just earlier:

"The reality is that with the MAX grounding, this is the straw that broke the camel's back with believing that the MAX 10 will deliver on the schedule we had hoped for."

He later clarified United would not cancel the order for MAX 10s, just remove them from internal plans. Industry experts say airlines rarely cancel orders for fear of losing deposits, but often juggle models or else use public pressure to help win concessions. United is one of Boeing's biggest customers.

3M's profit fell 10.9%, dragging down the Dow Jones Index, and Johnson & Johnson dropped by 1.6%.

Netflix jumped 7% in after hours trading after it reported unexpectedly strong subscriber growth in the last quarter. It added 13.1 million subscribers in that period, meaning 260 million people now have an account with the streaming service.

And later this week we will hear results from companies including Tesla and Intel.

As I mentioned earlier, there is growing speculation in several media outlets this morning that the prime minister is poised to announce changes to the stage 3 tax cuts.

The Labor caucus is meeting today to discuss a range of issues including cost of living relief measures and, reportedly, changes to the cuts, which were an election promise.

So what changes could they be? My colleague Michael Janda canvasses several options the government could consider:

• ASX SPI futures: +0.2% at 7504 points
• ASX 200: 7514 points
• Australian dollar: 65.7 US cents
• Wall Street: Dow Jones -0.24%, S&P 500 +0.25%, Nasdaq +0.34%
• Europe: FTSE -0.03%, DAX -0.34%, Stoxx 600 -0.37%
• Spot gold: +0.36% to $US2,028/ounce
• Brent crude: -0.46% to $US79.69/barrel
• Bitcoin: -1.3% to $US39.275

Figures updated at 7:50am AEDT

Good morning and welcome to the ABC's live markets blog.

The local share market is expected to open a little higher this morning after mixed results on Wall Street.

US investors are continuing to feel optimistic that the Federal Reserve will aggressively cut interest rates (they're set to meet next week) and Wall Street is nearing record highs.

The S&P 500 is up 0.1%, while the Dow Jones is down 0.2%.

ASX 200 futures are up 0.1%.

And the Australian dollar is higher, buying 65.7 US cents.

Turning our eyes to Canberra, speculation is swirling this morning that the government is gearing up to announce some changes to the stage 3 tax cuts, as pressure grows on it to offer cost of living relief to middle and lower income earners doing it tough. Cabinet met yesterday to discuss the issue but no official announcement has been made yet.

The Labor caucus is meeting today to discuss broader cost of living measures. My colleague Tom Crowley in Canberra wrote about what's on the table in this helpful piece here