29 January 2024 | Weekly Snapshot

Did you know?

The India stock market’s record-breaking run has pushed its market cap above Hong Kong’s to become world’s 4th largest equity market.

Market Movements

Australian Share Market (ASX 200) – up 1.81% during the holiday shortened week. The Materials sector (+3.15%) led the gains with markets (commodities in particular) buoyed by China’s Central Bank (PBoC) announcement last week to cut its Reserve Requirement Ratio (RRR) by 50 basis points that is expected to release CNY1 trillion into the economy in the latest attempt to halt the early new year Chinese equities slump. Financials (+1.75%) were the next best with Banks up the past 8 weeks in a row on the prospects for rate cuts later in the year. Health Care (+1.65%) was another strong performer. Info Tech (-0.24%) was the only sector lower in what was a strong week. Consumer Discretionary (+0.51%) also lagged the broader market as did Energy (+1.04%) despite the oil price up 5% last week on ongoing geopolitical risks. It was a fairly quiet week for local data. The NAB Business conditions decreased 2pts to +7 index points in December with Business Conditions now back around their long-run average level, from the historically high levels of recent years due to pandemic stimulus measures. While Business confidence rose 8pts to -1 index points on a broad-based lift in confidence although most industries remained in less negative territory with price and cost growth declining sharply during the month. Otherwise, domestic investors were focused on any read throughs from the US Q4 earnings season. With 25% of S&P 500 companies having reported Q4 results so far, 69% have beaten consensus EPS expectations, below the 5- and 10-year averages. It was also noted that 68% have beaten revenue expectations, which is level with the 5-year but above the 10-year average. The blended year on year earnings growth rate for Q4 S&P 500 Earnings Per Share for the 25% of companies that have reported is currently sitting at -1.4%, below the +1.6% EPS growth expected for the S&P 500 at the start of the reporting season.


U.S. Share Market (S&P 500) – up 1.06%, with the Dow (+0.65%), and Nasdaq (+0.94%) also higher for the 3rd week in a row. The S&P 500 extended further into all-time high territory although geopolitical risks remained elevated. Economic and inflation data was again largely better than expected, supportive of the soft-landing narrative with investors having now largely abandoned the higher for longer narrative that dominated most of last year. The Conference Board’s Leading Economic Index (LEI) fell by a smaller 0.1% in December following a 0.5% decline in November, continuing to signal underlying weakness in the US economy. Despite the overall decline, six out of ten leading indicators made positive contributions. Markit’s flash January US Composite PMI unexpectedly hit a seven-month high of 52.3 versus estimates for 51.0 with output growth led by the Services PMI at 52.9 up strongly from last month’s 51.4. The Manufacturing PMI also unexpectedly returned to expansion on improved orders, coming in at 50.3, a big jump from last month’s 47.9 and diverging significantly from very week recent regional manufacturing indicators. The first estimate for US Q4 GDP came in at 3.3% growth, well ahead of expectations for 2% with ongoing consumer spending helped by low unemployment, public-sector spending, and exports key areas of strength. The December PCE inflation report was largely in line. Annualized headline PCE at 2.60%, down slightly from last month was the lowest since February 2021. Core PCE (the Fed’s preferred inflation measure) was also in line with expectations at 2.9% on an annualized basis and the lowest since March 2021. With recent inflation indicators continuing to trend lower it has become a case of when not if the Federal Reserve will cut interest rates, with market pricing currently at a 50/50 chance of a rate cut in March.

Portfolio Movements

Freeport McMoRan (FCX) beats Q4 and year end estimates. Freeport (one of the world’s largest copper producers) reported Q4 EPS $0.27 ex-items last week, ahead of the $0.23 estimate. Q4 revenue of $5.91B was also a slight beat on the $5.85B expected. Strong Q4 operating performance saw Copper sales volumes exceeded, and unit net cash costs come in below, the October 2023 guidance. Richard Adkerson, Chairman and CEO, said, “We enter 2024 with a focus on strong execution of our operating and investment plans, optimism on market fundamentals and a relentless drive to enhance the value of our strong portfolio of assets. Our global team achieved success during 2023 on a number of important initiatives to enhance value, advance growth options and position us for the future.”


Intel (INTC) Q4 beats – Q1 guidance below estimates. Intel reported a better-than-expected Q4 result with Q4 EPS of $0.54 ahead of the $0.45 expected. Q4 revenue of $15.41B was also a beat on the $15.16B expected with a strong 4Q gross margin. “We delivered strong Q4 results, surpassing expectations for the fourth consecutive quarter with revenue at the higher end of our guidance,” said Pat Gelsinger, Intel CEO. “The quarter capped a year of tremendous progress on Intel’s transformation, where we consistently drove execution and accelerated innovation, resulting in strong customer momentum for our products. In 2024, we remain relentlessly focused on achieving process and product leadership, continuing to build our external foundry business and at-scale global manufacturing, and executing our mission to bring AI everywhere as we drive long-term value for stakeholders.” Investors focused on the weaker than expected Q1 guidance with Q1 EPS of just $0.13 expected and well below the $0.34 consensus estimate although the company remained positive on the calendar year ahead.


Verizon (VZ) beats on strong cash flow and customer growth. Telco giant Verizon shares jumped on better-than-expected Q4 and full-year 2023 results highlighted by strong cash flow and customer growth. “After delivering continuous improvement throughout 2023, we ended the year strong and continue to pursue the right balance of growth and profitability,” said Verizon CEO Hans Vestberg. “2023 was a year of change. We have the right assets and the best team in place and are well-positioned for growth in 2024.” It was a bit of a messy financial result with a pre-tax loss from previously disclosed special items of approximately $7.8 billion. But the underlying business seems to have regained momentum with the anticipated turnaround underway.

The Week Ahead

Domestic economic data releases this week include Retail Sales tomorrow, Private Sector Credit on Wednesday, Building Approvals Thursday, with Housing Finance and Q4 Producer Price Index on Friday. The highlight of the week is the monthly and Q4 Consumer Price Index on Wednesday with Q4 CPI expected to have increased 0.8% over the quarter.

International economic data releases include Japan Unemployment tomorrow and Eurozone Q4 GDP tomorrow night along with US FHFA Home Price Index, Consumer Confidence, and JOLTS Job Openings. China Manufacturing and Non-manufacturing PMIs are Wednesday. Wednesday night is big with US ADP Employment, Q4 Employment Cost Index, Chicago PMI, and the Federal Reserve FOMC meeting the highlight of the week. Eurozone CPI and Unemployment is Thursday night along with Bank of England rates decision, and US Q4 Productivity, Q4 Unit Labour Costs, Construction Spending, and ISM Manufacturing. Friday night is another key data point with the US Non-farm Payrolls report.

Portfolio company reporting this week is busy and includes Diageo first half tomorrow, Microsoft Q2, Google Q4, Novo Nordisk full year, and Thermo Fisher Q4 all on Wednesday. Shell full year and Apple Q1 are Thursday, with Amazon Q4 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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