Market Rejects ANZ’s Record Profit | Amazon Miss 

28 October 2022


New Zealand Market Movers 

The New Zealand market (NZX 50 Index, +0.5%) rose half a percent on Thursday on light trading.  

ANZ Bank (-4.0%) sold off even after reporting an annual cash net profit of $2.06 billion (for the 12 months to 30 September 2022), an 8% increase over its 2021 figure. However, the company’s report ominously spent half of its space addressing the “financial pressure” impacting its home-loan customers from interest rate rises. At the same time, ANZ’s Home lending increased $5.3 billion to $104 billion over the 12 months.  

Ebos (+2.5%) rose after updating the market on favourable start to the 2023 financial year, where revenue for the 3 months to September reach $3B. 

Australia Market Movers 

The Australian market (ASX 200 Index, +0.5%) closed at a six-week high on Thursday. Energy (+2.4%) and Materials (+1.7%) led sectorial gainers as Crude Oil (+1.1%) has now gained ~4% in the past two trading sessions. 

The Bank of Canada lifted its benchmark interest rate 50-basis-points on Thursday, which was less than the market expected. Investors are now hoping that the Reserve Bank of Australia follow suit next week Tuesday and delivers another minimal 25-basis-points. As Canada and Australia are both contending with recessions, the slowing pace of rate hikes should manufacture softer landings, while still paying service to their respective mandates to control inflation. 

Europe Market Movers  

European markets (Stoxx 600 Index, +0.1%) closed flat on Thursday with losses in Mining (-1.7%) and Technology (-1.6%) offsetting gains in Oil and Gas (+3.5%) and Banks (+1.1%). 

Credit Suisse (-18.6%) shares cratered after reporting a third-quarter loss of 4.034 billion Swiss francs compared to expectations for a loss of 568 million Swiss francs. 

US Market Movers 

US markets (S&P 500 Index -0.6%) closed mixed on Thursday (Nasdaq fell -1.8% and Dow advanced +0.6%) after US Gross Domestic Product (GDP) data posted its first quarter of growth in 2022, rising by +2.6%. Even so, the US Federal Reserve is still widely expected to approve a fourth consecutive 75-basis-pointst rate hike next week.  

Meta Platforms (-24.6%) has performed even worse on the second day after releasing its latest earnings report, after falling -15.0% on Wednesday. 

McDonald’s (+3.3%) climbed after reporting better-than-expected quarter three sales before the bell on Thursday. Revenue was ~3% higher than market expectations at $5.87 billion as a result of raising menu prices and robust restaurant traffic. 

 
Stock In Focus 

AMAZON.com (AMZN.NASDAQ) 

Amazon shares are currently down –14% in after-hours trading, after its third quarter result missed market expectations. Its profit making AWS suffered its slowest level of growth since 2014, its revenue growing ‘only’ +33% to $20.5B, and delivering operating income of $5.4B, off market expectations of $6.37B.  

Looking ahead management also guided soft group revenue of between $140B to $148B, well below market expectations of $155.15B, citing fluctuations in foreign exchange, changes in global economic and geopolitical conditions and customer demand and spending. 

We are Buy High Risk rated on Amazon, we still see further volatility and possible downside across the market over the near-term, therefore investors should still be patient and prudent. 

 
What Markets will be Watching this Week (UTC +13) 
 
Monday 
CN GDP Growth Rate Year-on-Year Quarter 3 

Tuesday 
US Microsoft earnings 

Alphabet earnings 

Visa Earnings 

Coca-Cola earnings 

Wednesday 
AU Inflation Rate YoY Q3 

Meta Platforms earnings 

Boeing Earnings 

Thursday 
CA BoC Interest Rate Decision 

Apple earnings 

Amazon earnings 

McDonald’s earnings 

Starbucks earnings 

Friday 
EA ECB Interest Rate Decision 

US GDP Growth Rate Quarter-on-Quarter 

Exxon Mobil earnings 

The New Zealand market (NZX 50 Index, +0.5%) rose half a percent on Thursday on light trading. ANZ Bank (-4.0%) sold off even after reporting an annual cash net profit of $2.06 billion (for the 12 months to 30 September 2022), an 8% increase over its 2021 figure. However, the company’s report ominously spent half of its space addressing the “financial pressure” impacting its home-loan customers from interest rate rises. At the same time, ANZ’s Home lending increased $5.3 billion to $104 billion over the 12 months. 

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