As we said yesterday the local reporting season has been market supportive so far with no real landmines (yet) and while its early days we’re largely following in the footsteps of the recent US earnings season which saw over 70% of companies beat market expectations for both sales & profits.
- Corporate America has upheld its end of the bargain helping stocks advance and now it’s Australia’s turn.
We feel that local companies will largely replicate their US peers over the coming weeks although there’s now one key difference and that is that we have already seen the vast majority of stocks rise into this earnings season albeit primarily on optimism around the macro-economic backdrop. However, the market level we do feel will hinder any subsequent major gains after good results similar to CBA this week whose result MM felt was solid and ahead of expectations but the stock has drifted since i.e. there’s no relief rally left in most stocks with the index above 7000.
