Archives: Reports
A choppy session at the index level, although ultimately we ended pretty close to where we started down by ~15pts as a number of influential companies pared back losses despite a mixed bag of results. Materials were the winner thanks largely to ongoing strength in Copper & Iron Ore prices while some money came out of the Communications sector led by Telstra (TLS) which fell ~1.2%
The ASX200 trod water on Monday with the index rotating in a very tight 26-point range however beneath the hood it was a very different story with reporting season providing its usual volatility e.g. Inghams (ING) +11.%, NIB Holdings (NHF) -11.6%, and BlueScope (BSL) -10%. As we approach the halfway mark in this reporting calendar winners are ahead of losers by a nose but with Commonwealth Bank (CBA) falling over 8% last week after disappointing the market its no surprise that the index has struggled of late – with BHP Group (BHP) facing the music today the story looks poised for its next chapter.
A reasonable session at the index level today with some support emerging for the banks into weakness while BHP rose ahead of their results due out tomorrow. Overall, more misses than beats today as many of the reporting companies fell sharply, although overall, with 40% of companies having now reported, we still observe that beats are outnumbering misses (just).
If we are correct this merry-go-round of market opinion will dominate 2023 as economists and investors alike attempt to 2nd guess the Fed, RBA, BOE & Co. The RBA Chair Philip Lowe has become increasingly hawkish as the year evolves with the senate hearing not dampening his aggressive stance towards inflation. In our opinion it’s simply a year to watch for elastic bands stretching too far and fading the respective moves whether it be too hawkish, dovish focused on a recession, a recovery, or rate cuts in 2024 – they are all probably going come into play this year in one form or another.
Friday’s tough day for equities took the ASX200 lower for a second consecutive week, almost 3% below its early February high. Reporting season has created some major volatility on the stock/sector level which is no surprise but its not common to see Commonwealth Bank (CBA) lead both the sector and index lower – Australia’s largest banks closed down -8.2% for the week with the average fall across the “Big Four” come Friday being -5.6%, remember MM often says “the market cannot go up with the banks”.
The local market followed the overnight lead today as rising bond yields weighed on risk assets. The end of the market more leveraged to rates – Tech and Real Estate – were some the hardest hit while Energy was also under pressure as coal names continued their slide. Two sectors managed gains today despite the weakness, being Utilities and Consumer Staples.
The ASX200 delivered another fascinating session on Thursday with 8% of the main board moving by over 5%, with the winners dominating 15-1 it wasn’t surprising to see the index close up +0.8%, even with Commonwealth Bank (CBA) falling another -1.5%. Under the hood, the IT and Consumer Discretionary Sectors were the standouts both rallying +2.7% – interesting to see the interest rate-sensitive stocks outperform in a week when short-term bond yields are making 4-month highs.
A big day on the reporting front with more results than not topping expectations leading to good moves in many shares, while a higher-than-expected unemployment rate (3.7% v 3.5% exp) saw bond yields trickle lower, taking some pressure off the RBA.
The ASX200 tumbled over -1% yesterday after Commonwealth Bank (CBA) dragged both the sector and index lower, by the close the “Big 4” banks were responsible for over two-thirds of the main index’s 78-point fall. During the day we saw noticeably large volume through the futures market as nervous investors appeared to move to the sidelines following the market’s +9.6% rally from its early January low – in just 8 trading days the local market has surrendered over 200 points or 3%.
The market was hit today as the influential banking sector weighed heavily on the index, accounting for ~2/3rds of the day’s decline. It actually wasn’t too bad elsewhere with 50% of the ASX trading higher, but when the average decline of the Big 4 is ~4.5%, it’s always going to be tough going.
