14 August 2023 | Weekly Snapshot

Did you know?

The FIFA Women’s World Cup was founded in 1991, 32 years ago (currently its 9th tournament). Apart from breaking viewing and attendance records, it has also been a merchandise hit. Nike has revealed the Matildas sold more jerseys before the Women’s World Cup had started than the Socceroos did during and since the men’s World Cup in Qatar. The Matildas’ jerseys for this FIFA Women’s World Cup are outselling the Socceroos’ jersey from the FIFA Men’s World Cup two to one. Rebel Sport reported that the FIFA Women’s World Cup is one of the best supported major sporting events that they have ever seen.

Market Movements

Australian Share Market (ASX 200) – up 0.20%. The Consumer Discretionary sector (+1.96%) led the gains followed by Telco’s (+1.06%) and Energy (+0.76%) while Info Tech (-1.62%), Consumer Staples (-0.83%), and Utilities (-0.59%) led the declines. Offshore leads were mixed with the growth cohort of international equities underperforming last week as bond yields and equity valuations remained elevated. Our full year reporting season got underway last week with 17 ASX 200 companies reporting before ramping up this week when 61 ASX 200 companies will report. Results from the small sample last week were mixed but the broader demand backdrop seems ok. Cost pressures are the main concern from analysts heading into reporting which has seen earnings estimates falling over the past few weeks, with our market trading on around 14.7x forward earnings, slightly above the long-term average but not expensive. The Westpac-MI consumer sentiment index fell from 81.3 last month, to 81 in August, still around historical lows and sliding further despite the RBA’s hold decision, reflecting ongoing cost pressures on households and concerns over more policy tightening to come. Respondents also remained extremely pessimistic about family finances while near-term economic expectations also deteriorated. The NAB business survey on the other hand showed that confidence recovered slightly to +2 in July from -1 in June. Business conditions eased a touch, but demand, profitability and employment sub-indexes are all still at above-average levels. Inflation pressures worsened during the month with firms reporting a jump in labour cost growth, likely from the recent increase in minimum wage, and overall price growth lifting alongside wages. RBA Governor Lowe told the House parliamentary committee late in the week that although the RBA doesn’t rule out further tightening ahead, the economy is currently on path to soft landing. Notable comments were that the board believes it is now time to sit and assess the lagged effect of rate hikes to date with policy settings in restrictive territory, but the recent data is consistent with the economy straddling the narrow path to a soft landing with rate hike odds being pared back and the Aussie dollar falling to a 9-month low.


U.S. Share Market (S&P 500) – up 0.31%, with the Dow (+0.62%) and Nasdaq (-1.90%) mixed. Earnings started to slow with more than 90% of S&P 500 companies having now reported with earnings continuing to come in marginally better than expected last week. But due to elevated prices from the strong run over recent months, positive earnings surprises weren’t rewarded like they were earlier in the reporting season. The more upbeat themes from the Q2 reporting have included consumer resilience, largely intact secular growth narratives surrounding big tech, lingering normalization tailwinds for travel & entertainment, strength in auto, industrial and commercial aerospace end-markets, a tight supply backdrop for homebuilders, some investment banking and IPO green shoots, and the near end of destocking/inventory normalization. Cautious themes revolved around heightened macro uncertainty, waning pricing power, negative operating leverage risks, sticky wage pressures, a hiring slowdown, weak freight, and elevated longer term bond yields. It was a key week for inflation data with annual headline CPI rising to 3.2% in July from 3% in June, in line with expectations and the first rise in 13 months since inflation peaked at 9.1% in June last year as the benefits of high year ago base effects start rolling off. Annual core inflation, which removes food and energy costs, dipped to 4.7% from 4.8% last month, slightly higher than the 4.6% expected. The Producer Pirce Index was also largely in line. Headline PPI rose 0.3% in July, slightly above expectations for a 0.2% monthly rise and up from June’s 0.1% monthly increase. Core PPI was also up 0.3% for the month vs forecasts for a 0.2% increase. The PPI report noted an increase in services prices and goods prices rose slightly, with a 0.5% monthly increase for foods. The rise in energy costs during the month didn’t seem to have an impact on the inflation data as the oil price rose for the 7th straight week with gasoline prices up 8.5% since the July 4 long weekend, the largest increase in the month following the summer holidays since 2005. The inflation data was mostly interpreted as supportive of the recent disinflation narrative, although longer term bond yields rose.

Portfolio Movements

CBA (CBA) reported FY cash NPAT of $10.16B last week, up 6% for the year and EPS of $6.02 both largely in line with expectations. Although cash earnings for the fiscal second half fell 3% compared with the first half. CBA’s fiscal 2023 net interest margin was up 17 basis points on the previous year to 2.07% but fell 5 basis points in the 2H from 1H due to the ultra-competitive mortgage market. CBA declared a final dividend of $2.40 a share, up from $2.10 last year. Troublesome and impaired assets increased to A$7.1 billion from A$6.4 billion last year, which CBA attributed to increases in the construction and commercial property sectors. Due to its strong capital position CBA announced a further $1 billion on market share buyback for FY 2024. CBA noted the Australian economy has been resilient with the tailwinds of a recovery in population growth, relatively high commodity prices and low unemployment. However, there are signs of downside risks building as rising interest rates have a lagged impact on mortgage customers and other cost of living pressures become a financial strain. They are seeing consumer demand moderate and economic growth slow and are monitoring the impact of reduced discretionary spend, particularly on small and medium sized business customers.


Novo Nordisk (NOVO) surged 17% last week on results from the SELECT cardiovascular outcomes trial that achieved its primary objective by demonstrating a statistically significant and superior reduction in major adverse cardiovascular events (MACE) of 20% for people treated with semaglutide (WEGOVY) 2.4 mg. The SELECT trial was initiated in 2018, enrolled 17,604 adults and has been conducted in 41 countries at more than 800 investigator sites. The primary objective of the trial was to demonstrate superiority of semaglutide 2.4 mg with respect to reducing the incidence of MACE consisting of cardiovascular death, non-fatal myocardial infarction, or non-fatal stroke. Novo now expects to file for regulatory approvals of a label indication expansion for semaglutide 2.4 mg in the US and the EU this year.


Sony (SONY) beats Q1 estimates – Full year guidance underwhelms. Sony reported better than expected Q1 results last week, but full year guidance was below market expectations. Q1 revenue of ¥2.964T was up 33% year on year and ahead of the ¥2.516T consensus as was net income of ¥217.55B vs ¥169.76B. The company upgraded full year guidance for net income to ¥860.00B which was higher than prior guidance for ¥840.00B but below market estimates for ¥909.96B. The Japanese conglomerates operations span movies, music, financial services, electronic components, and gaming. The company said the PS5, Sony’s most important product, sales momentum had been picking up in July after slowing in the June Q but cut the outlook on its image sensors used in smartphones with recovery in China’s smartphone market taking longer than expected and key customer Apple recently noting that iPhone demand is also sluggish.

The Week Ahead

Domestic economic highlights this week include the RBA meeting minutes and our Q2 Wage Price Index tomorrow. The Westpac Leading Index is released Wednesday, with the July labour force data on Thursday.

International highlights include China Foreign Direct Investment today, Japan Q2 GDP tomorrow along with German ZEW Economic Sentiment. Tomorrow night has US Export and Import Price Index, Empire State Index, retail sales, Business Inventories and NAHB Housing Market Index. UK CPI is Wednesday night along with Eurozone 2nd estimate of Q2 GPD, Industrial production and Trade Balance, and US Housing Starts, Capacity Utilization, Industrial Production and the FOMC July meeting minutes. The US Philadelphia Fed Index and Leading Indicators is Thursday night. With Japan CPI on Friday.

Corporate reporting ramps back up this week with full year results from CSL and NAB Q3 update tomorrow, and Transurban full year results on Wednesday. And full year results from Amcor, Telstra, Sonic Healthcare, and Westpac Q3 update on Thursday.

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

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