New Zealand Market Movers
The New Zealand Market (NZX50 Index) was flat yesterday.
Vulcan Steel was one of the poor performers down -10.6%, providing a weaker earnings guidance for the 2023 financial year, as demand starts to soften. Cyclone Gabreille hitting the Hawkes Bay and Gisborne area extremely hard, saw stocks with exposure there fall heavily, Scales Corporation down -4.7%, threat of significant damage to crop and farms and disruption to operations.
Sky City shares were down -3.2% after a weak result from Australian equivalent Star Casino, which fell another -13.5% yesterday, after being down 20% on Monday.
Kathmandu share rose +1.9% after announcing that its first-half results were benefitting from the return to travel and international tourism which saw revenue jump +34%, from the previous year.
While property and retirement villages were both weaker as NZ house prices continue to slip in January, down -1.3% for the month, and down-13.9% over the last 12-months.
Australia Market Movers
The Australian market (ASX200 Index, +0.2%) edged up on Tuesday, on a busy day of mostly weak results offset by market heavy weight CSL’s minor gain and a bounce in tech shares following Wall street’s lead.
James Hardie share’s fell -4.3%, after cutting full year net profit guidance from US$650m to $710m down to US$600m to US$620m, construction demand softened.
Australian homeware and furniture retailer Temple and Webster slumped -26% after revealing first half revenue and profits both fell -12% and -47% respectively from last year. The result reiterating Westpac’s and NAB’s weak consumer confidence index result as higher interest rates and cost of living weigh down.
US Market Movers
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.
Most sectors were lower except for tech, following Palantir’s results which reporting its first-ever profit, ahead of markets expectations of a loss. Allowing other tech names to report strong gains such as Tesla (+7.5%) and Nvidia(+5.4%).
CPI print came in at 6.4% for January. It’s around what was expected, and the read is less rosy than December’s CPI print – it’s a suggestion of what we’ve reiterated several times: that higher rates are here for longer. Services growth kept on a steady upwards incline which is what is going to be concerning the Fed the most – services has a modest (20%) weighting in CPI, but a much greater weight in PCE (core) which is what the Fed cares about.
The news saw treasury yield react accordingly, that the fed still has more work to do with the 6-month U.S. Treasury closed at 5.022%, above 5% for the first time since July 2007.
Stock in Focus: CSL Limited (CSL.ASX)
CSL shares rose +0.9% as the market responded relatively positively to the release of the company’s half-year results. For the six months ended 31 December, CSL reported a 19% increase in revenue to US$7,183.5m and a +10% lift in net profit after tax (NPAT) in constant currency to US$1,957m.
This was driven partly by a five-month contribution from Vifor Pharma, strong growth in immunoglobulin and albumin sales, and record levels of plasma collections.
This allowed the CSL board to lift its interim dividend by 2.9% to US$1.07 per share. Looking ahead, management has reaffirmed its guidance for FY 2023 NPATA in the range of approximately US$2.7 billion to US$2.8 billion at constant currency.
We remain Buy rated on CSL as a quality leading healthcare company as the underlying business will returns back to its strong growth trajectory following its covid induced hiatus. The Vifor acquisition also complements the business by adding additional growth. Further, due to the nature of their product CSL would be immune to any economic slowdown making it a more defensive holding over volatile periods.
What Markets will be Watching this Week (UTC +13)
Monday
Contact Energy Earnings
CSL Earnings
Tuesday
Westpac Consumer Confidence Index
CBA Earnings
FMG Earnings
James Hardie Earnings
Wednesday
US and UK Inflation (CPI) Data for January
Wesfarmers Earnings
Treasury Wines Earnings
Fletcher Building Earnings
SkyCity Earnings
Thursday
Telstra Earnings
QBE Insurance Earnings
Friday
US Building Permits Data