Weekly market update - 23rd of February 2024
Written and accurate as at: Feb 23, 2024 Current Stats & Facts
In the latest week, the financial markets have presented a mixed picture, with indices such as the S&P 500 and NASDAQ experiencing fluctuations influenced by economic data and earnings reports. This article aims to distil the essence of these movements and provide insights into individual stock performances, which are crucial for our discerning clientele at Integral Private Wealth.
The US financial markets showed resilience, returning from a mid-week slump triggered by January's higher-than-expected Consumer Price Index (CPI) figures. This data momentarily dampened the prevailing optimism about a robust US economy, the anticipation of decreasing inflation, and the prospect of significant interest rate reductions in the forthcoming months. The S&P 500 concluded the week slightly lower by 0.3%, while the NASDAQ declined by 1.3%.
This setback comes after a remarkable period where the S&P 500 had advanced in 14 of the preceding 15 weeks, a streak not observed since 1972 and only five times before 1928. The recent Bank of America survey underscores a growing bullish sentiment among fund managers, marking the highest optimism in two years. This confidence reflects decreased cash holdings, diminished fears of a hard landing, and increased allocations to US equities, particularly in the technology sector.
The domestic earnings season has revealed a balance between moderating revenues and stringent cost control, leading to margin performances surpassing expectations. The trend of earnings surpassing forecasts continues, with a notably positive tilt in outlook statements and trading updates.
Globally, the S&P/ASX 200 modestly rose by 0.2%, with disparate performances across sectors. Notably, the US CPI data has led to a recalibration of expectations around the Federal Reserve's interest rate cuts, pushing the anticipated initial cut to July from May. On the earnings front, notable performances include:
- CAR Group reported a solid 25% half-year earnings per share growth, meeting market expectations with robust revenue growth and performance.
- JB Hi-Fi surpassed market estimates with less earnings attributing to resilient January trading and cost management.
- Breville Group announced an 8% year-over-year EBIT increase, supported by product innovation and geographic expansion, albeit with guidance slightly below market expectations.
- CSL exceeded consensus with a 2.5% increase in net profit after tax and before amortization, maintaining its full-year guidance despite challenges in its Vifor business and CSL112 trial failure.
- IDP Education showcased strong student placement performance with a notable EBIT beat despite challenges in the Indian market.
- Commonwealth Bank, Goodman Group, Vicinity Centres, Wesfarmers, and QBE Insurance also reported results that reached market expectations, highlighting resilience and strategic agility in challenging conditions.
However, companies like Fletcher Building, Pro Medicus, and Data#3 faced setbacks, underlining the varied impacts of market conditions and strategic decisions across sectors.