Rate hikes > the RBA is tipped to lift rates by +25 basis points today to 4.35%, as it plays catch-up to its central bank peers. Inflation is still sitting elevated in Australia — we think this isn’t the last hike…noting a red-hot rental market remains, while fuel + electricity pricing lingers on as a key contributor to stubborn CPI. AUDJPY is the way to benefit from the likely interest rate hike.
The race that stops the nation¹ > Macquarie’s quants have turned their attention to the Melbourne Cup – The team’s traditional model is tipping No. 3, Without A Fight, to continue its Caulfield Cup win at Flemington on Tuesday, ahead of No. 21 Future History and No. 5 Vauban.
Does Cup Day correlate to higher returns on the ASX? A study here suggests it does – Cup Tuesdays are tend to correlated to higher returns on the ASX vs other days of the week and other Tuesdays. Link.
Noting contrarian investor Chris Kourtis has been picking up stock in CSL and ResMed while their stock has been sitting down and dirty in the charts — we still like we think CSL is worth picking up here…the “attack of the GLP-1s” (Ozempic, etc) is a material effect, but we still see upside while GLP-1s remain relatively expensive. We take a more sanguine view on FPH and ResMed…not picking up any of those yet…
Mainfreight was down -5.7% yesterday, following a weak quarterly result from Maersk (which reported over the weekend it would cut 10,000 jobs), Move Logistics also fell -4.8%. Mainfreight reports on Thursday which is guided to be weak but with the stock trading below $60 we feel comfortable picking ‘some’ up for those that can hold on for medium term and then load up post earnings — we have gone on about Mainfreight a bit here, but it’s amazing how many people love the stk at 80 bucks but don’t love it at 57 bucks…See below — air spot rates have dropped…esp. in North-East Asia…this is a cyclical thing…
The ad man game > NZME guiding down earnings on the back of weak advertising spend, with that crucial Dec/holiday period ad spend looking weaker than usual.
Disney gets a new CFO
Disney stock has been on a slide lately. Marvel films aren’t what they used to be. Nelson Peltz has been in there agitating a lot (better known to Gen Z as the father of bride-of-the-year Nicola Peltz). Now they have a new CFO — Hugh Johnston. So what? Well — Johnston is the former CFO of Pepsi, and he’s had combat experience in the field against (and with) Peltz before — Peltz previously went activist at Pepsi and was somewhat successful, with a Peltz representative appointed to the board and the co initiating buybacks and cost-savings. A defensive move for the entertainment company, then — bring in someone who has fought with Peltz before, but also one that should make Peltz and co happy — Johnston knows the playbook and can implement some bottom-line changes. Stock is sitting at $84.00, near five yr lows.
Elsewhere in Disney the co is in talks to acquire the remaining interest in Hulu from Comcast. Disney will pay ~$8bn for the remaining 33% of the streamer, which values Hulu at ~$25bn. Hulu commands ~20% of the US streaming market, and the move suggests that the streamers are starting to consolidate — we think once they have finished consolidating they should all have Netflix-like profitability. Painful times ahead before then, though. Remaining buy-rated.
Mark Twain:
The Melbourne Cup is the Australasian National Day. It would be difficult to overstate its importance. It overshadows all other holidays and specialized days of whatever sort in that congeries of colonies. Overshadows them? I might almost say it blots them out. Each of them gets attention, but not everybody’s; each of them evokes interest, but not everybody’s; each of them rouses enthusiasm, but not everybody’s; in each case a part of the attention, interest, and enthusiasm is a matter of habit and custom, and another part of it is official and perfunctory. Cup Day, and Cup Day only, commands an attention, an interest, and an enthusiasm which are universal – and spontaneous, not perfunctory. Cup Day is supreme it has no rival. I can call to mind no specialized annual day, in any country, which can be named by that large name – Supreme. I can call to mind no specialized annual day, in any country, whose approach fires the whole land with a conflagration of conversation and preparation and anticipation and jubilation. No day save this one; but this one does it.