01/11/2024 09:19

US Banks

The US banks have been performing strongly since late 2023 and are now testing their 2021 highs. Stocks in the sector are reporting strongly, and while the current move looks stretched, a Christmas rally-style move, around 5-10% higher is our preferred scenario.

Read more

14/06/2024 09:47

Banks

NAB tested levels not seen since 2015 on Thursday, and Commonwealth Bank (CBA) posted fresh all-time highs last week. Please excuse the repetitive coverage of the banks, but we receive plenty of questions towards the sector, and they are closing in on pivotal levels. Plus, their US peers have been noticeably lacklustre of late.

Read more

16/05/2024 09:18

ANZ Group (ANZ) v Commonwealth Bank (CBA)

ANZ’s report this month was a slight miss to expectations primarily due to costs coming in ~1% above expectations. The important Net Interest Margin (NIM) fell 9bps half on half, but it was largely in line with forecasts. However, on the positive side, Tier 1 capital was well above expectations, driving a strong dividend (83cps vs 81cps expected) as well as a sizable $2b buyback. As we said at the time, the small miss for ANZ was offset by larger capital returns in dividends and buybacks – WBC and NAB both delivered slightly better results this month.

Read more

23/04/2024 09:01

Are Macquarie & now Citi correct that the banks are a sell?

On Monday, Citi joined Macquarie with a “sell call” on the major banks, which saw the sector reverse early gains to close near their intra-day lows, ANZ even slipped into negative territory. There were two major reasons behind their bearish stance: Citi believes the valuations of the banks are stretched considering the potential political “attacks on their profits”, i.e. when the RBA starts cutting, they will be forced to follow suit at the expense of profitability. Macquarie said to “sell” the banks in mid-March as the sector posted new highs, again a call on valuation grounds; good timing so far!

Read more

15/03/2024 09:15

Do we like Macquarie’s sell call on the banks?

Yesterday, Macquarie came out with a rare call that it’s time to sell the “Big Four Banks,” and they’ve also advised clients to be underweight in everything! The crux of their view is that the current high valuation of the Australian banks isn’t justified by the fundamentals. They even doubled down on Westpac (WBC), moving from outperform to underperform; by definition, they must think their own shares are a sell. Last week, the banks hit multi-year highs, led by Commonwealth Bank (CBA), which posted all-time highs; hence, it's not hard to comprehend some kneejerk profit-taking.

Read more

15/12/2023 09:38

The Banks

The banks have been quiet in 2023, with ANZ and CBA higher while NAB and WBC are currently lower, but they have paid healthy dividends along the way, and the underlying ASX200 (excluding dividends) is only up +4.8% with a few weeks remaining.

Read more

10/08/2023 09:09

First Up

The banks returned to form with a bang on Wednesday following CBA’s solid FY23 result with margins holding up extremely well despite the much-discussed increased competition. While the result may not have been outstanding there was nothing not to like from margins to dividends and even a surprise $1bn buyback which illustrates their strong capital position and confidence by the board.

Read more

30/06/2023 09:12

Global Markets

US stocks closed mixed overnight with the S&P500 rallying +0.45% while the tech-based NASDAQ slipped -0.16% following the strong economic data which appears to give the Fed more room to hike rates if and when required.

Read more

16/05/2023 09:12

Global Markets

US stocks edged higher overnight led by the Tech Sector, software business NVIDIA Corp (NVDA US) closed up +2.2% contributing the most number of points to the S&P500 in the process. The AFR described the market as being in a state of flux and this has felt on point of late, our preferred scenario is still the S&P500 makes fresh highs back above 4200 but failure into such strength wouldn’t surprise MM and we remain very open-minded as to what comes next.

Read more

13/03/2023 09:13

First Up

After numerous months of hanging on every word/innuendo from the Fed, RBA, BOE, et al we have a new gorilla in the room i.e. the collapse of Silicon Valley Bank (SIVB US), the 2nd largest bank to collapse in the US history. The wheels started to fall off last Wednesday when the company surprised the market by announcing it needed to raise $US2.2bn to shore up its balance sheet, the rest is already history as we witnessed a hysteria-induced run on the bank largely blamed on Venture Capitalists, customers withdrew a staggering $US42bn by the close of business on Thursday.

Read more