Archives: Reports
US stocks delivered a mixed performance overnight with the S&P500 closing down -0.16% with the Financials -0.4% and Real Estate Sectors -0.75% offsetting gains in tech +0.37% and Consumer Discretionary +0.5%, again! The NASDAQ eked out a small gain registering its 5th consecutive positive day but it still endured its worst month in 2023 falling over -2.1%. New inflation data, core personal consumption expenditure (PCE), came in as expected allowing yields to edge lower which helped the likes of tech on the day – volatility is set to rise in the coming days with nonfarm payrolls due tonight and lower liquidity ahead of Labor Day.
Today marks the end of FY23 reporting, although there will be a few stragglers that come out late, normally with bad news! Interestingly enough, the only two sectors to finish higher during August were discretionary retail (+4.64%) and property (+0.99%), the two sectors that many fingered as having most risk ahead of results! Further still, the defensive/safe Utilities & Staples were the two weakest links, showing the importance of retaining an open mind, particularly in this market.
US stocks rallied for the 4th straight session overnight as economic data continued to signal that the Fed is approaching the end of its current hiking cycle. The S&P500 closed above 4500 while the NASDAQ finds itself less than 3% below its 2023 high, at MM we are still targeting a break of 16,000 in the coming weeks/months by the NASDAQ which is no longer a big call as Treasury yields edge lower with investors taking a “bad news is good” approach embracing that a slowing economy will lead to a more dovish Fed.
Bang! Weak building approvals and a softer-than-expected read on inflation had the bulls charging today, and an already positive lead from the US overnight on weaker jobs data was supercharged by our own soft economic reads at 11.30 a.m., which should see the RBA hold fire from here, making 4.1% the peak in interest rates!
US indices rallied overnight delivering their best performance since June as bond yields retreated with economic data pointing to an end in the Feds tightening cycle. Almost 90% of the S&P500 closed higher led by the “tech mega-caps” as US 2-year treasury yields sank back below 4.9%. US job openings fell by more than expected to 8.83mn, another new 2-year low while consumer confidence fell amid a souring view towards jobs.
The majority of companies have now reported and while we hate using the old cliché, its been better than feared, much like the broader economic outcomes that have played out over the past year which has prompted a more aggressive stance by central banks globally – the imminent recession is getting less airtime and markets are reflecting that. As we’ve written at nauseum over recent months, we’re neutral at the index level but that belies significant action that’s unfolding under the hood, a theme we expect to continue, creating a great environment for stock picking, as long as you pick the right stocks!
The ASX200 rallied +0.6% on Monday despite an average day on the reporting front which saw Fortescue (FMG) -5.1% and NEXTDC (NXT) -2.6% both fall after delivering their earnings numbers/forward guidance. However, on the day there were some very influential names in the winner’s enclosure such as CSL Ltd (CSL) +1.7%, BHP Group (BHP) +1.2%, and Commonwealth Bank (CBA) +1.2% which when combined with over 60% of the main board advancing was enough to send the index higher.
A solid session to kick off the new week despite a mixed bag on the reporting front as we transition down the market cap spectrum over the next week. So far, results have been better-than-expected with earnings beats outnumbering misses 5:3, however there is growing uncertainty around what comes next and that’s filtering into softer guidance in aggregate for FY24, prompting downgrades.
Fed Chair Jerome Powell made it abundantly clear in his speech from Jackson Hole that the central bank would keep tightening if required to bring inflation back to its 2% target – its currently sitting at 3.2% after peaking above 9% in June 2022. As Powell reiterated from Wyoming “It’s the Fed’s job to bring inflation down to our 2% goal and we will do so”. Obviously, no mention was made about how/why the genie had escaped the lamp in the first place but we must acknowledge they have performed a solid job of reining it back in over the last ~18 months. Other comments while fairly hawkish were no surprise to MM:
