Charts and caffeine: Three outperforming stocks in an outperforming sector

Charts and Caffeine

Livewire Markets

Welcome to Charts and Caffeine - Livewire's pre-market open news and analysis wrap. We'll get you across the overnight session and share our best insights to get you better set for the investing day ahead.


  • S&P 500 - 3,825 (+1.06%)
  • NASDAQ - 11,586 (+0.71%)
  • CBOE VIX - 27.80 

Note: US markets will be closed tonight for the July 4th Independence Day holiday.

  • FTSE 100 - 7,169 (unch)
  • STOXX 600 - 407.14 (unch)
  • USD INDEX - 105.12 (+0.42%)
  • US 10YR - 2.889% (sitting below 3% for the first time since early June)
  • GOLD - US$1813/oz
  • WTI CRUDE - US$108.46/bbl


Eurozone headline inflation came in at 8.6% - beating the consensus estimate from economists by a hair's breadth. All attention now turns to the next ECB meeting - where the first rate hike in 11 years is a done deal. The question is - will it be 25bp or 50bp!

The coming week is dominated by two things - labour force data out of North America and the next Reserve Bank meeting. 

Let's deal with the RBA first. The pattern of the last few months is being widely expected by economists. Both ANZ and Nomura have 50 basis point hikes pencilled in for next Tuesday at 2:30pm. 

What is up for debate is the impact of rate hikes on the labour market. 

This is the first meeting of the board since the Fair Work Commission decided the minimum wage would rise by 5.2% - faster than inflation's 5.1%. It will be interesting to see what the RBA's projections are for a jobs landscape where it (should) be easier to get a pay rise but inflation will still bite.

In the US, we'll get the latest Federal Reserve minutes following that meeting two weeks ago. 

Finally, the US and Canadian labour reports are released on Friday night - and both should show what we are seeing in Australia.


Perhaps another reminder of the importance of "staying invested" - is the performance of the Dow Jones index through the last 100+ years. The moral of the story is that for every downturn (no matter how prolonged), a period of outperformance has generally followed. Will this time be different? Historians could point to this to argue it won't be different. (Source: Twitter/mayhem4markets)


9.5%: The ASX healthcare sector has delivered EPS growth that far outpaces any other sector on the local bourse. 
(Source: Macquarie)


With this stat in mind, I thought I'd take a look at the ASX healthcare sector. Macquarie's estimates suggest the healthcare sector has indeed outperformed the rest of the local sharemarket every year.... for 15 straight years.

Well that's just swell, isn't it? Look how far healthcare is, in comparison to the rest of the competition! (Source: Macquarie)

The sector also has the highest "realisation" rate. This suggests what you see is most likely what you'll get come February and August reporting season.

The figure is higher in the brokers' two favourite picks: Resmed (ASX:RMD) and CSL (ASX:CSL). In fact, of the major health companies, only one has failed to deliver consistent growth - Healius (ASX:HLS).

Consistency, consistency, consistency (Source: Macquarie)

So if you're after long-term consistency, this may be the winner among winners. 


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Charts and Caffeine
Markets Wrap
Livewire Markets

Charts and Caffeine is Livewire's daily pre-market news and analysis wrap. Every day, Livewire's team of market journalists and editors get you across the overnight session and share their best insights to get you better set for the investing day...

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