12 February 2024 | Weekly Snapshot

Did you know?

Under a new format announced last year, the Reserve Bank of Australia will now meet every 6 weeks to set interest rates, rather than the first Tuesday of the month.

Market Movements

Australian Share Market (ASX 200) – down 0.71% and easing back from last week’s all time high although offshore leads were mostly positive. The Healthcare sector (+1.32%) led the gains continuing its strong rebound over recent months. Info Tech (+0.91%) was helped by strong offshore leads from big tech. Financials (+0.73%) are up 5 weeks in a row led by banks up 8 weeks in a row on optimism that interest rates have already peaked. Energy (-3.44%) led the declines despite a weekly rise in the oil price with geopolitical risks, particularly in the Middle East, remaining elevated. Materials (-3.03%) were also lower with lingering concerns around the growth trajectory for China as they headed into their weeklong closure for New Year celebrations. Chinese equities have been off to a rough start in early 2024 falling 10% to a 5 year low before rebounding somewhat last week on further government measures to halt the decline. Consumer Staples (-1.73%) was another notable decliner. It was a fairly quiet week in terms of data releases with the RBA’s first meeting of the new year the highlight, leaving the cash rate unchanged at 4.35% as expected. But unlike the US Federal Reserve who has now moved to an outright easing bias, the RBA said further rate hikes cannot be ruled out yet with inflation still not expected to return to target until late 2025 although interest rates markets think they are done hiking with the next move expected to be down with current pricing implying two rate cuts by year-end. The RBA moves to a new format this year with interest rate setting meeting to be held every 6 weeks, rather than the first Tuesday of every month. The ASX interim profit season is now underway with a few results last week, but some significant large cap results due this week.


U.S. Share Market (S&P 500) – up 1.37%, with the Dow (+0.04%), and Nasdaq (+2.31%) also higher for the 5th week in a row with the S&P 500 trading above 5,000 points for the first time. The S&P 500 and Nasdaq are now higher for 14 out of the past 15 weeks with the Nasdaq rallying back near its all-time high from late 2021. The hot streak has also seen the S&P 500 forward P/E ratio rise above 20.0 for first time in 2 years, currently sitting at 20.3. The January ISM Services index at 53.4 was ahead of the 52 expected and a jump up from last month’s 50.5 with Services making up around 70% of the US economy. The prices paid sub index surged to 64 from last month’s 57.4, the highest since Feb last year and the largest monthly increase in 12 years suggesting inflation pressures haven’t been completely put away yet. The US Treasury sold $US42 billion worth of 10-year bonds last week, the largest on record, with stronger than expected demand. There have been some concerns about the amount of debt the US govt is racking up but no signs of that last week. Earnings reports continued to roll in with some cost-cutting, restructuring, and layoffs emerging as a Q4 earnings season theme although the weekly initial jobless claims at 218K were in line and remain historically low with the jobs market continuing to hold up better than expected. US Q4 earnings metrics improved again last week although 2024 estimates have been fairly stable hence the forward P/E expansion. With 67% of S&P 500 companies now having reported, 75% have beaten consensus EPS expectations with companies now reporting earnings that are 3.8% above estimates, up from 2.6% last week. The blended earnings growth rate for the fourth quarter is currently +2.9%, improving again on the +1.6% last week and is now ahead of the 1.5% earnings growth rate expected at the beginning of the reporting season.

Portfolio Movements

Amcor (AMC) reports first half results – Reaffirms full year guidance. Global packing giant Amcor reported Q2 / first half results last week, showing some improved stability in earnings following a rough 2023. Net sales of $6,694 million, adjusted EPS of 31.3 cps and adjusted EBIT of $709 million were in line with adjusted Free Cash Flow of $113 million ahead of the prior year. Most importantly fiscal 2024 guidance for adjusted EPS of 67-71 US cents per share was reaffirmed, although Q2 volumes were slightly lower than anticipated with demand remaining soft. CEO Ron Delia said: “Solid fiscal 2024 second quarter and first half execution led to adjusted free cash flow ahead of last year and adjusted earnings per share modestly above our expectations set out in October, despite challenging market conditions. This leaves us on track to achieve our full year earnings and cash flow guidance for the 2024 fiscal year.”


Linde Plc (LIN) beats Q4 estimates. Industrial gasses giant Linde has beaten Q4 estimates again and been a solid contributor in the portfolio reporting Q4 adjusted earnings of $3.59 per share, up from $3.16 a year earlier and ahead of the $3.50 expected. Q4 revenue of $8.3 billion also up nicely on the $7.9 billion a year earlier and ahead of the $8.07 billion expected. Full year 2023 adjusted EPS of $14.20 was up 16% for the year. The company said it expects full year 2024 EPS guidance is in the $15.25 to $15.65 range, in line with the $15.45 consensus estimate for the year ahead. CEO Sanjiv Lamba said, “Despite the challenging environment in 2023, the Linde team once again delivered industry leading results including a 25.4% ROC, 27.6% operating margin and EPS growth rate of 16%. In addition, we closed the year with a strong balance sheet and a high-quality project backlog of $8.5 billion which will contribute earnings growth for years to come.”.


Nippon Steel (5401) raises full year profit guidance. Japanese Steel maker Nippon Steel, increased their full year profit and dividend forecasts with their Q3 results last week, revising up full-year plans for pure business profit by ¥50.0bn (to ¥890.0bn) and the dividend by ¥10 (to ¥160). It will be the 2nd year in a row of record profits due to improving margins from better cost management with potential for a 3rd straight year of record profits if recent trends of improving prices in Asia and improving domestic margins continue, a restructuring of production facilities is planned, and the Canadian coking coal business driving growth if coking coal prices were to remain around current levels. The firm also gave an update on progress with the planned US Steel acquisition, which will likely be a lengthy process.

The Week Ahead

Domestic economic data releases this week include Westpac Consumer Confidence and NAB Business Conditions tomorrow. Employment data on Thursday is a highlight with a 30K jobs gain and the unemployment rising from 3.9% to 4% expected.

International economic data releases include US Treasury Budget tonight. UK Unemployment, German ZEW Economic Survey, US Small Business Index are tomorrow night. US CPI on Wednesday night is a highlight, along with UK CPI, and Eurozone Q4 GDP (2nd estimate). Japan Q4 GDP is Thursday with UK Q4 GDP, US Empire State Index, Philadelphia Fed index, Retail Sales, Capacity Utilization, Industrial Production, and NAHB Housing Index all on Thursday night. Friday night is US Housing Starts, PPI and University of Michigan Consumer Sentiment.

Portfolio company reporting this week includes ANZ Q1 today, CSL first half and Macquarie Q3 are tomorrow. Wednesday is Commonwealth Bank first half and CME Group Q4. South 32, Telstra, Wesfarmers and Treasury Wines first halves are Thursday, with Insurance Australia Group first half on Friday.

Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice

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