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A tenth straight winning month for Aussie shares drifted towards a lacklustre conclusion as US futures fell heavily following an earnings update from retail giant Amazon.

The S&P/ASX 200 trimmed an early 20-point advance to half a point or 0.01 per cent mid-session. The market mood soured as a sharp decline in US futures pressured Asian markets.

Declines in Afterpay, Fortescue Metals, CSL and Wesfarmers largely offset advances in BHP, Rio Tinto and the banks.

What's driving the market

Slender overnight rises in the US were overshadowed by concerns about the prospects for tonight after Amazon warned online sales growth slowed as malls reopened. Nasdaq futures dived 171 points or 1.14 per cent as Amazon tumbled 7.47 per cent in after-hours trade. S&P 500 futures fell more than 0.6 per cent.

Amazon's extraordinary growth during the pandemic left plenty of room for disappointment. A sales increase of 27 per cent last quarter would delight many investors, but set off alarm bells after a string of 40%+ quarters.

“They just don’t have the tailwinds they had last year,” Brian Yarbrough, analyst at Edward D. Jones, told Bloomberg. “It just becomes the law of large numbers. There’s just no way it can be sustained.”

Overnight, US stocks pushed to fresh highs as traders found the positives in mixed economic data. The S&P 500 and Dow both rose a little over 0.4 per cent.

"A government report showing the US economy grew by a strong 6.5% annual rate in the June quarter helped ease investors’ concerns over the pace of economic recovery," Kalkine Group CEO Kunal Sawhney said.

"While the GDP growth estimates broadly missed the market expectations, investors appear to have shrugged off this disappointment while appreciating the fact that it is above its pre-pandemic peak."

The ASX remained on track for another winning month. The ASX 200 has put on roughly 110 points in July, all in the second half of the month as investors looked to an economic rebound when the lockdown in NSW ends.  

"The lockdown and the material acceleration in the vaccine drive now being seen is expected to create the pre-conditions for a strong re-opening in the December quarter, with national GDP forecast to rebound 3.0%, erasing almost all the job losses of Q3," Westpac senior economist Elliot Clarke said.

"The recovery should spill over into the first half of 2022 when we expect growth of 2.9%. While 2021 growth is now expected to be around 3.2% (from 4.8% prior to the lockdown), 2022 growth is now seen at 4.2% instead of 3.2%."

Going up

NAB climbed 0.66 per cent after announcing plans to buy back up to $2.5 billion of shares on-market. The buyback represents an unwinding of the defensive stance adopted by many companies during the depths of the pandemic. Other companies are expected to follow. NAB raised capital and slashed its dividend last year to bolster its balance sheet.  

CBA firmed 0.48 per cent, Westpac 0.41 per cent and ANZ 0.29 per cent.

BHP climbed 1.8 per cent to a new high, bolstered by last week's record quarterly update. Rio Tinto rose 1.91 per cent. Fortescue Metals retreated 2.38 per cent from yesterday's record close following a 3.1 per cent drop in iron ore yesterday.  

Seven Group edged higher after tightening its grip on Boral. Seven CEO Ryan Stokes was appointed chairman of the Boral board after Seven increased its stake in the construction materials business to 69.6 per cent. Former Boral chair Kathryn Fagg retired from the board. Seven shares inched up 0.34 per cent. Boral shares dropped 1.02 per cent.

Gold's best session since May boosted local miners. Ramelius rose 4.86 per cent, St Barbara 3.91 per cent and Newcrest 1.19 per cent.

Fund manager Janus Henderson climbed 7.18 per cent following yesterday's half-year update. Lithium miner Orocobre rallied 6.52 per cent to a new record.  

Going down

Origin Energy dived 7.85 per cent after flagging $2.2 billion in impairments and tax expenses in its full-year result. The charges reflect reductions in the carrying value of assets as wholesale electricity prices decline, as well as a deferred tax liability. The company reaffirmed full-year guidance.

News of a half-year operating loss and a slowdown in growth sent shares in Marley Spoon down 22.76 per cent. The meal delivery service, one of the big winners from pandemic lockdowns, announced net revenue grew 12 per cent last quarter on a constant currency basis. The company reported a half-year operating loss of 15 million euros as it invested in marketing.

AMP fell 1.64 per cent to an all-time low after the regulator, ASIC, launched civil proceedings against the wealth manager over a superannuation fee scandal. AMP said it had fixed the issue and remediated 2,500 customers for a total of $900,000.

BNPL firm Sezzle dropped 9.75 per cent after reporting increasing pressure on margins last quarter. Underlying merchant sales rose 118.7 per cent year on year.

Other markets

Asian markets followed US futures lower. The Asia Dow fell 0.27 per cent, China's Shanghai Composite 0.67 per cent, Hong Kong's Hang Seng 0.69 per cent and Japan's Nikkei 1.35 per cent.

The "risk-off" mood helped drag Brent crude down 42 US cents or 0.56 per cent to US$74.68 a barrel.

Gold trimmed strong overnight gains, falling US$3.60 or 0.2 per cent to US$1,827.60 an ounce.

The dollar eased 0.03 per cent to 73.93 US cents.

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