2 MAY 2022 – Monday Market Highlights – Transcript

Brendan Larsen
Good morning. It’s Monday second day, and I’m Brenda from Milford. It was another busy week for US corporate earnings. Several index heavyweights reporting. Google parent alphabet reported first quarter revenue and loan consensus at 68 billion. However, earnings per share came in at 24.62 versus expectations of 25.74. The key disappointment in the result was YouTube revenue growth, which came in 8%. Below consensus at 14.4% year on year. The stock subsequently traded down 5% in the aftermarket. Microsoft reported earnings better than feared was revenue and EPS growth each 1% ahead of consensus at 18 and 14%, respectively. Importantly, their cloud computing platform is accelerated from 46% to 49%. quarter on quarter, and commercial bookings held up strongly at 35%. year on year. Amazon fell 10% And after hours trading, given operating income missed consensus by 31%, citing ongoing inflationary and supply chain pressures. q2 operating profit guidance was also disappointing, where they expect between a loss of 1 billion and positive 3 billion, which is below consensus midpoint of 5 billion. Market weakness continued on the back of earnings with the s&p 500 finishing the week down 3.27%. On the NASDAQ fared slightly worse down 3.76%. Reporting also continued in Australia this week, Kohl’s reported third quarter 22 results with like for like sales growth in line with consensus at 3.9% year on year, but costs coming in higher given COVID and flooding impacts. The key call outs from the result were product availability. Given this remains challenging across the sector, and inflation, which accelerated 3.3% for the quarter, or 2.9% X fresh and tobacco. EML stock fell 38% On Tuesday, as the company provided a soft three Q 22 trading update and downgraded FY 22 guidance. Third quarter underlying EBITDA fell 14% with the business noting Australia and North America trading in line with expectations, but Europe is continuing to struggle. FY 22 guidance for underlying you would die was revised down to 52 to 55 million from 58 to 65 million. So I think continued challenges in Europe, lower establishment income, delayed regulatory approvals for Euro bond investment and negative effects impact and economic use. Australia’s first quarter CPI data printed even stronger than expected with headline inflation accelerating to 5.1% year on year versus consensus at 4.6%. The RBA is preferred measure trimmed mean inflation also printed stronger than consensus at 1.4%. quarter on quarter versus 1.2%. There’s very strong print suggest there may be a meeting this week is very much in play. where the market is fully pricing in a 15 basis point rate hike from 10 basis points to 25 basis points. US first quarter GDP surprisingly contracted at a 1.4% annualized rate versus an expectation of positive 1%. Much of this mess can be attributed to an input surge tied to solid consumer demand, which suggests that’s unlikely to deter the Fed from hiking 50 basis points at the main meeting this week as per market pricing. We also going to read on the US consumer via the personal spending report. personal spending surged 1.1% in March versus an expectation of 0.6% with an acceleration of services spending up to 1.1% Despite headline spending on goods rising 1.2%. Looking further into the detail it is clear that spending is rotating more towards services, or the restaurants and recreation services up 1.2 and 1.5% respectively, while spending on autos was down 2%. And furniture was down 1.3%. As alluded to this week, we have major catalysts in Central Bank meetings. The RBA Bank of England and the Fed will all meet to decide respective policy rates. So investors will be paying close attention to these additionally, we’ll be watching Australian retail sales, New Zealand employment USI cm and the US employment report. Thanks for listening. We’ll see you again next week.