Stocks end a good week higher (NAB, NCM, MSB, BBN)
WHAT MATTERED TODAY
A reasonable session to end the week with the market higher despite weaker than expected data coming from China – then again, weak data = stimulus = stocks go higher! Overall, it was really nice to get back into looking at company earnings rather the Coronavirus stats this week. While the virus is still very much in play its far more interesting to think about corporate earnings – and this week we had a large whack of them with more to come over the next two weeks. While there were clear hits and misses over the week, overall results were positive against low expectations.
As a sector level today, IT the standout with a few of our stocks in that space doing well – XRO, Z1P and the like, while Afterpay put on more than 6%.
As mentioned above, Chinese data was weaker today, a bunch of metrics below expectations however stocks looked through it, and move higher from the 11.30 low,
China data today
Source: Bloomberg
Asian markets edged higher today while US Futures were in the green during our time zone.
LOCAL REPORTING CALENDAR: CLICK HERE **Please note, data sourced from Bloomberg, not all ASX companies are on this list and dates can vary**
Overall, the ASX 200 closed up +35pts or +0.58% to 6126 today. US Futures are higher, with Dow Futures up +82pts/0.30%.
ASX 200 Chart
ASX 200 Chart
CATHCING MY EYE
National Bank (NAB) +1.17%: Out with a quarterly trading update today showing cash earnings of $1.55B for 3Q20 which puts them on track to meet current earnings expectations for the full year. The treasury & markets division was a standout, more than recovering from their miserable 1H20 performance which enabled NAB to report 10% income growth in 3Q20 compared to the quarterly average of 1H20. Their net interest margin is unchanged from 1H20 to 3Q20 as a result of the improved treasury performance which offsets the impact of lower interest rates and competition. Expenses are 2% higher in 3Q20 compared to the quarterly average of 1H20 with COVID impact to blame. They were supposed to be unchanged. They confirmed that 12% of home loans are subject to deferral and 16% of business loans. All up, an inline update.
National Bank (NAB) Chart
Newcrest (NCM)-0.90%: I said this morning that the result was a beat, and on first read through it was with both profit and dividends coming in ahead of the street. The balance sheet was strengthened during the year and the company is “rich” with 3-5 tier 1 growth opportunities. Their underlying NPAT was $750M vs consensus of $703m + other metrics were strong, however the stock closed down - Why? Operational issues at Lihir continue with grades disappointing. Frustrating to say the least when it did look like Lihir was on the improve. NCM screens ‘cheap’ when looking at gold stocks globally and todays update on Lihir refocussed attention on why that is. Anyway, we’ll see how it plays out from here but we we’re not that enthused by todays news.
Newcrest Mining (NCM) Chart
Mesoblast (MSB) +39.05%: we wrote about the FDA issues in Tuesday’s report and now the biotech looks to have put the issue behind them. A vote by an advisory committee went in favour of Mesoblast’s RYONCIL drug 9 to 1. Though the vote is non-binding, the FDA will now consider the recommendation and make a final determination by 30 September.
Mesoblast (MSB) Chart
Baby Bunting (BBN) +10.37%: top line growth of 14% and Profit growth of 34% were both better than expectations for Baby Bunting’s full year result out today. NPAT of $19.3m was a little ahead of expectations, driven by a 91% lift in Click & Collect orders into the second half of the year. As with many other retailers, the online presence had to be accelerated as the pandemic hit and BBN was able to capitalized on the shift. Despite the fall in travel related products, BBN saw sales growth of 11.8% for the full year, and +15.3% in the second half alone. The momentum has continued into the new financial year with LFL sales up 20% for the first six weeks, though the company didn’t give guidance for the full year.
Baby Bunting (BBN) Chart
Sectors this week
Source: Bloomberg
Stocks this week
Source: Bloomberg
OUR CALLS
No changes today
Major Movers Today
Have a great night
James, Harry and the Market Matters team
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