Welcome to Charts and Caffeine – Livewire’s pre-market open news and analysis wrap. We’ll get you across the overnight session and share our best insights to get you better set for the investing day ahead.
S&P 500 – 4,129 (-0.22%)
NASDAQ – 12,381 (unch)
CBOE VIX – 24.16
FTSE 100 – 7,488 (-0.61%)
STOXX 600 – 431.13 (-0.47%)
SPI FUTURES – 6,876 (+0.16%)
US 10YR – 3.061%
USD INDEX – 108.54
GOLD – US$1,761/oz
WTI CRUDE – US$93.63/bbl
EARNINGS WRAP AND PREVIEW
It was a hodgepodge day yesterday for earnings sector-wise, with the smaller miners taking centre stage. Pilbara Minerals (ASX: PLS) posted its maiden profit, proving that the leaders in each major commodity are making a serial amount of money. Alumina (ASX: AWC) more than doubled its first-half net profits and hiked its dividend. Meanwhile, Monadelphous (ASX: MND) and Perenti (ASX: PRN) dug up even more profits themselves – but flagged that the competition for skilled labour will be the story of the next year.
In the consumer and retail spaces, Ansell (ASX: ANN) dared to issue earnings guidance for FY23 despite a steep fall in net profits. Breville Group (ASX: BRG) reported a double-digit rise in revenues, profits, and dividends. Scentre Group (ASX: SCG) delivered a 20% hike in net profits but only doled out an extra half a cent in dividends. Endeavour Group (ASX: EDV) noted a recovery in hotels and retail as it hiked its profit and dividend. Then, there’s poor old Kogan (ASX: KGN) which crashed to a $35 million loss, admitted it will have to hike the cost of its memberships, and failed to provide earnings guidance.
Today is Day 3 of the biggest week of reporting season – and the highlight reel stretches from Coles and Dominos to Tabcorp and Wisetech. May I suggest an extra shot of coffee?
STOCKS TO WATCH
Today’s stocks to watch section is historic (at least to me) – I have never seen so many upgrades for one company in one day! Sure, the downgrades are still coming (Reliance Worldwide, Nick Scali, and two for poor old AdBri) but the sudden crowd around this next company just amazed me:
The company in question is Altium (ASX: ALU). Not one but three brokers are loving this stock now. Two of the brokers in question now have outperform ratings on the company – namely RBC and CLSA. Both also increased their price targets by several dollars.
Then, there’s Macquarie who shared a more muted view and upgraded the company from an underperform to a neutral. Analysts are backing management’s conviction in hitting its FY26 targets – though you should watch out for weaker overall subscriber growth and higher customer churn.
One more company received an upgrade from the “sell” to “neutral” column – but it’s at Citi. NIB Holdings (ASX: NHF) beat analyst expectations for insurance margins, but analysts noted that the achievement was especially impressive given NIB lost policyholders!
Today, the charts are a global markets special. Making money with a home bias is one thing but mastering international equities is a whole different beast. But, as is with any investment, all roads lead back to timing. And these two charts are a terrific example of that:
1) Are all the best global opportunities in the US? More than a few would say yes but in a classic case of “get out while you’re ahead”, the S&P 500 has now retraced its bull market all the way back to pre-COVID times. It was good while it lasted, hey?
2) And things are not all that much better in emerging market equities. The relationship between the MSCI emerging markets index and the S&P 500 has also come back around. This time, the breach goes all the way back to the turn of the century. Of course, since this chart is in US Dollar terms, things are weighted down by that fact.
18.6%: The forecast for UK inflation come January 2023, per Citigroup
And in case you thought Citi’s call was an outlier, well I’ve got bad news. Bank of America has their call at 14%, while Goldman Sachs and EY have their calls at 15%.
Everything’s fine, right?….. Right?!
Today’s report was written by Hans Lee.
GET THE WRAP
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