9 September 2024 | Weekly Snapshot

Did you know?

The below chart shows military spend by country. Interesting to note that the US is spending almost 3x the amount of China. The collective spend of allies is interesting in seeing that Russia, Saudi Arabia and India are all significant potential allies to China.

Market Movements

The ASX fell by -0.97% last week, after being up 0.85% the week earlier. Charter Hall Group was one of the best performing companies, up +7.66% on the back of stabilising commercial property values. Mineral Resources was among the worst performers, down -23.66% following softer lithium and iron ore prices.

Over the week, financials outperformed, rising +2.59%. In a speech on Thursday the RBA Governor Bullock repeated recent messaging that the RBA doesn’t expect to be in position to cut rates in the near-term, and reiterated the board is trying to return inflation to target in a reasonable timeframe, and the highest priority remains on bringing inflation down and there is further to go highlighting several risks to the upside for inflation are still present.

The S&P500 fell -4.25% this week, after being up +0.24% the week before. American Tower Corp, which owns, operates and develops wireless communications and broadcast towers was among the best performers, was up 5.4% following upgrades in its credit ratings by S&P. Dollar Tree Inc fell -21.29% after the discount variety store chain CEO said its core customer who contributes approximately 60% of its overall sales continues to be negatively impacted by inflation, “with more than 60% claiming they have had to sacrifice on purchasing basic necessities due to the higher cost of those items.”

US stocks logged their worst week since the height of last year’s regional bank crisis, and breaking a three-week winning streak after tepid hiring in August. The August nonfarm payrolls rose 142K for the month, not far off the 160K expected but July and June were revised lower by 86K jobs combined.

Portfolio Movements

Santos signs LNG supply contract with Glencore

• Santos announced the signing of a mid-term LNG supply contract with Glencore Singapore. The contract will commence in Q4 2025 and supply 19 LNG cargoes, or up to approximately 0.5 million tonnes of LNG per annum over a period of 3 years with the LNG being supplied from Santos’ global portfolio of world-class LNG assets.
• CEO Kevin Gallagher said “This contract along with the recently executed long-term LNG Sales and Purchase Agreement with Hokkaido Gas in Japan demonstrates Santos’ strong LNG portfolio position and customer relationships in the region. There continues to be extremely strong demand in Asia for high heating value LNG from projects such as Barossa and PNG LNG. Santos is committed to supporting the energy security of our valued customers across Asia,”

Westpac appoints Anthony Miller as new CEO

• Westpac has announced that Anthony Miller has been appointed as CEO and managing director. Miller, who joined Westpac in 2019 and was the head of Westpac’s Business & Wealth division. Current CEO Peter King will retire after a 30-year career at Westpac including five years as CEO.
• Westpac Chair Steven Gregg said Mr Miller is the right person to take the company into a new era. “Anthony is an exceptional leader. He’s an individual of integrity and he’s ready to lead Australia’s oldest company. He has deep expertise in financial services and global banking and has built a considerable track record of delivery over 25 years,”

Verizon ups dividend and reaffirms guidance

• US Telco Verizon announced a 1.9% increase in their quarterly dividend to $0.6775 per share with the stock on an attractive 6.5% dividend yield and the 18th consecutive year that Verizon has increased the div.
• CEO Hans Vestberg said “Our strong focus on three key pillars – wireless service revenue growth, adjusted EBITDA expansion, and free cash flow generation – has once again put the Board in a position to raise the dividend”.
• Verizon confirmed a $20B cash takeover of Frontier Communications and expect the deal to close in 18 months, with strategic benefits including extending Verizon premium offerings and experience to Frontier’s consumer and small business customers. The transaction is expected to be accretive to Verizon’s revenue and Adjusted EBITDA growth rates upon closing.
• Verizon also reaffirmed Full-Year 2024 Guidance for total wireless service revenue growth of 2.0% to 3.5% and adjusted EPS of $4.50 to $4.70.

The Week Ahead

• Tuesday: Westpac Consumer Confidence is released, with the prior reading for August showing up 2.8% to 85
• Wednesday: US CPI will be released, with consensus expecting Month on Month (MoM) inflation of 0.2% compared to the prior reading of 0.2% and Year on Year (YoY) inflation of 2.6% compared to the prior reading of 2.9%. CPI excluding Food and Energy YOY is expected to come in at 3.2%, compared to the prior reading of 3.2%. Australian
• Thursday: US Initial Jobless claims are released, with consensus expecting 235k initial jobless seekers for the month, compared with the prior reading of 227k, and the US Producer Price Index (PPI) published by the US Bureau of Statistics and which measures the average change in prices received by domestic producers of goods, services, and construction is expected top rise 0.1% for August, similar to the 0.1% rise in July.
• Friday: University of Michigan Sentiment for September is expected to show 68.3 compared to the prior reading of 67.9.