24 April 2023 | Weekly Snapshot

Did you know?

According to the Australian War Memorial 103,021 Australian service men and women have perished in War dating back to 1860 with the majority of those in World War 1 (61,674) and World War 2 (39,656).

Market Movements

Australian Share Market (ASX 200) – down 0.42% and snapping a 3-week winning streak with volatility noticeably lower than it has been in recent months. The Energy sector (-2.29%) led the declines followed by Materials (-2.16%) and Consumer Staples (1.03%). Industrials (+0.78) led the gains followed by Financials (+0.74%) and Utilities (+0.43%). It was a quiet week in terms of data releases with just the Reserve Bank of Australia April meeting minutes out. Members did weigh another 25 basis point hike but elected to hold the cash rate steady at 3.60% after 11 consecutive monthly hikes. Members will reassess if, when, by how much policy may need to be tightened further after receiving updated economic forecasts next month and the upcoming Q1 CPI data due on Wednesday. Members noted interest rates are still likely to rise further and mentioned new upside inflation risks from the huge immigration intake recently announced and still see potential for larger wage increases later in 2023. The government also announced a big shake up of the RBA, the biggest since inflation targeting and formal independence was established back in the 1990’s, with changes set to take place from mid next year. There was some quarterly sales and production figures from the big mining and energy companies with BHP noting their Q3 Western Australia Iron Ore (WAIO) division achieved record production for the nine-month period. Woodside’s maintenance activities caused a drop in Q1 production with revenue down 16% from Q4 2022 on the combination of lower production and lower oil prices. The Q1 earnings season in the U.S ramped up with another 60 S&P 500 companies including 6 Dow components reporting results last week. According to FactSet’s latest Earnings Insights report 18% of the companies in the S&P 500 have reported earnings for the first quarter. Of these companies, 76% have reported actual EPS above the mean EPS estimate. The blended annual earnings decline for the companies that have reported is currently -6.2%. This is slightly better than the estimated Q1 earnings decline of -6.7% expected at the end of March.


U.S. Share Market (S&P 500) – down 0.10%, with the Dow (-0.23%) and Nasdaq (+0.42%) also lower with the S&P 500 changing by less than 1% for a third-straight week, the longest stretch since August 2021 with the volatility index (VIX) also falling to the lowest level since late 2021. The bond market volatility index (MOVE) has also declined by 40% over the past month with relative calm returning to markets. Economic data improved after some softer reads recently with the April Empire Manufacturing Index jumping 35.4 points and into unexpected expansion territory, the first positive print in 5 months and the highest since July last year. In contrast the April Philadelphia Fed manufacturing index fell more than expected before the April Markit flash US manufacturing PMI rose more than expected and the first expansion in six months with manufacturing data positive but quite volatile over the month. The NAHB Housing Market Index rose slightly ahead of estimates and the fourth-straight monthly gain as homebuilder confidence continues to improve after being battered by the interest rate hikes last year, supported by a lack of inventory in the existing home market. U.S housing data has been a bright spot recently although Building permits were down 8.8% for the month, a big miss and Existing home sales were a bit softer than expected in the first weaker than expected housing data in a while. The weekly initial unemployment claims continued to creep higher to 245K from last week’s 240K suggesting some easing in the super tight labour market. On the fiscal front, debt-ceiling negotiations got underway with Republicans presenting a plan to raise the debt ceiling into 2024, but with a proposal to cap nondefense discretionary spending and limit future increases to 1% per year. It is going to be a busy week ahead that could test the relative calm in markets with 180 S&P 500 companies set to report this week, including 14 Dow 30 components.

Portfolio Movements

Bank of America (BAC) beats downgraded Q1 earnings estimates with 15% year on year earnings growth. Bank of America reported Q1 EPS $0.94 last week, ahead of the $0.81 expected that had been downgraded last month on the Banking issues with earnings growth of 15% on the year ago quarter. Q1 revenue of $26.3 billion was also ahead of the $25.16 billion expected. Management comments included: “Every business segment performed well as we grew client relationships and accounts organically and at a strong pace. Led by 13% year-over-year revenue growth, we delivered our seventh straight quarter of operating leverage. We further strengthened our balance sheet and maintained strong liquidity. In the post results analyst call CEO Moynihan noted “Everything points to a relatively mild recession given the amount of stimulus that was paid to people and the money they have left over,” “At the end of the day, we don’t see the activity on the consumer side slowing at a pace that would indicate that, but we would see commercial customers are being more careful.”


Freeport McMoRan (FCX) Q1 Production and sales impacted by February weather event. Freeport reported Q1 results that beat estimates despite production and sales being impacted by the February weather event but had achieved full recovery by the end of March. Q1 EPS of $0.52 ex-items was ahead of consensus for $0.45 with Q1 revenue of $5.39 billion also ahead of the $5.21 billion estimate. Consolidated unit net cash costs were in line with the January 2023 guidance with good prices being received for copper, gold and molybdenum. The strong balance sheet and positive outlook for cash flow generation is expected to support continued organic growth and cash returns to shareholders. Richard Adkerson, Chairman and CEO said, “Our company is a premier global leader in the copper industry, with large-scale, long-lived reserves and an attractive portfolio of organic growth opportunities. We are focused on executing our strategy to supply copper efficiently and responsibly to a world with growing requirements for this critically important metal.”


Johnson & Johnson (JNJ) beats Q1 estimates, lifts dividend and upgrades guidance. J&J reported Q1 adjusted EPS $2.68 last week, ahead of the $2.50 expected. Revenue of $24.75 billion was also ahead of the $23.60 expected. The company announced a 5.3% increase in the quarterly dividend from $1.13 per share to $1.19 per share for the 61st consecutive year “In recognition of our 2022 results, strong financial position, and confidence in the future” said CEO Joaquin Duato. Full year 23 adjusted EPS guidance was also upgraded to $10.60-$10.70 from $10.45-$10.65 prior. J&J’s consumer health business, which it is spinning off into a separate publicly traded company this year, reported about $3.8 billion in sales, up 7.4% on the same period last year.

The Week Ahead

The domestic highlight this week is the Q1 Consumer Price Index data on Wednesday with estimates for headline inflation to increase 1.5% over the quarter and 7% annually, down from the 7.8% peak in Q4. On Friday is Private Sector Credit growth and the Producer Price Index.

International highlights include German IFO business survey tonight along with the U.S FHFA Home Price Index. Tomorrow night is U.S Consumer Confidence and New Home Sales. U.S Durable Goods and Wholesale Inventories are Wednesday night. The first estimate for U.S Q1 GDP is Thursday night along with Pending Home Sales. Friday sees CPI and unemployment data from Japan, preliminary Eurozone Q1 GDP, German CPI, and from the U.S is the Employment Cost Index, Personal Consumption Expenditure, and Chicago PMI.

Corporate reporting ramps up this week with Verizon Q1 tomorrow night. Google Q1, Microsoft Q3, CME Group Q1 and Thermo Fisher Q1 are Wednesday night. Linde Q1 is Thursday night. With Amazon Q1 and Sony FY on Friday night. There are 180 S&P 500 companies reporting this week, including 14 Dow components.

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

The information presented in this publication is general information only, and is not intended to be financial product advice. It has not been prepared taking into account your investment objectives, financial situation or needs, and should not be used as the basis for making an investment decision. Before making any investment decision you need to consider (with your financial adviser) your particular investment needs, objectives and financial circumstances.

Some numerical figures in this publication have been subject to rounding adjustments. Akambo Pty Ltd (including any of its directors, officers or employees) will not accept liability for any loss or damage as a result of any reliance on this information. The market commentary reflect Akambo Pty Ltd’s views and beliefs at the time of preparation, which are subject to change without notice.