Pavan Sharma

The S&P 500 ended the session flat, as while inflation may has peaked it is remaining stubbornly high putting the brakes on the market’s anticipation of a slow down inflation.

A surge in stock price doesn’t change the fact that Meta posted a sequential decline in earnings and revenue, while the Metaverse continues to burn through billions.

Contact Energy shares were up higher after delivering their 2023 half year result, which was down from the previous year but in-line with expectations. Operating earnings (EBITDAF) came in at $246m, down -24% from the previous year largely due to weaker wholesale pricing against a stronger corresponding period. Contact also reported a non-cash write down of $120m due to the lower storage capacity of tis Ahurua gas storage facility resulting in a reported net loss of $7m.

Fletcher Building weighs the NZX down, Star Entertainment sinks, Palantir posts profit, and Contact Energy posts a solid result.

We downgrade Apple upon declining hardware sales that we don’t see ebbing in ’23.

Happy monday, let’s get cracking – a lot to cover today. M&A over in the UK; ChatGPT’s (not so) existential threat to Alphabet, Dan Loeb jumps into Salesforce, entrenched inflation over in Norway & the US, and Mainfreight signals slowing growth.

We upgrade Air NZ from a Sell to a Hold. Since our last update, oil prices have dragged lower a major expense item for airlines – at the time the elevated fuel price being one of our major catalyst for the sell rating. While we aren’t too surprised over the increase in demand for air travel, however we are amazed with how well Air NZ and other airlines have been able to pass on costs inflation particularly fuel costs onto consumers as air fare remain extremely elevated, as supply struggles to recover back to pre-covid levels and keep up with recovery in demand as the world opens up.

Starbucks reported strong US results that were marred by a marked drop-off in China. We remain hold-rated on the stock amid China and valuation concerns.

Diversified Agriculture business Elders shares slumped on no news, after an inquiry by the ASX. Elders said it could not explain the decline but noted that it “held two investor briefings yesterday with a number of institutional investors”.   Elders noted factors already known by the market may be a contributor; 1) Declining livestock prices from historic highs; 2) Unseasonably wet conditions affecting eastern Australia ; 3) Softer real estate activity amid rising interest rates; 4 )Strong winter cropping outlook.