With a busy week in the earning season, the Superbowl in the United States drawing record viewing numbers and the comparison of the Taylor Swift economy encouraging travel spend, there has been much discussion on the markets.
Siobhan Blewitt, founder and CEO at Frais Capital, discussed the leading topics for the week on Monday at Disrupt Radio with Libbi Gorr. The key points to note have been the upgrades in domestic stocks, consumer spend and earnings season.
Hasan Tevfik, Investment Strategist, MST Financial shares the below insight from the week:
The reporting season is so far coming in a little better than those in the past. We are about 25% through, and here is a brief snapshot of the top-down stats so far.
ASX 200 June 2024 EPS forecasts have come down 0.4% or $550m to $151b during the reporting season. Over the long term, we see an average downgrade of 0.7% during a reporting season month (Feb or Aug). Here we exclude the effect of the currency. If we include the currency effect (more than a third of the ASX 200 profits base report in USD) we find ASX 200 June 2024 EPS has been upgraded by 0.4% or $650m.
Companies have been able to protect profit margins, at least for Industrials. ASX 200 Industrials EBITDA and net margin forecasts for June 2024 have risen by 11 basis points and 2 basis points, respectively. Commodity companies have endured a downgrade of 29 basis points for EBITDA margins and 21 basis points for net. However, we expect this to change as the big miners report.
Several ‘domestic demand’ stocks have enjoyed the biggest upgrades. Boral & JB Hi-Fi top the list. Some of the biggest downgrades have been for Aussie growth stocks like Polynovo, Seek and REA.
More to follow as the reporting season progresses.
Source: MST Hasan Tevfik
Overall, a big week for markets, discussions on the labour market, the state of the economy and more.
To learn more about the current market movements, wealth management strategies, portfolio advisory and further commentary, visit Home | Frais Capital.
You can also listen to Siobhan Blewitt on Monday mornings at 7am with Libbi Gorr on Enterprise Breakfast at Disrupt Radio.
