The Australian reporting season is only one week old and some trends have already become evident

The Australian reporting season is only one week old and some trends have already become evident. Firstly, there still is a general lack of revenue growth in corporate Australia, with most of the positive surprises reflecting cost-side management rather than above-consensus revenue beats (although there are some isolated cases of that). Secondly, earnings have been mostly consistent with downbeat expectations, which has meant there have been few price surges after results (Domino's Pizza is the obvious exception) and thirdly, even when companies beat consensus on earnings, dividends have been mostly in line and many companies have recorded price declines on the day of results. We saw this with CBA and Telstra in particular. This indicated to me that market valuations have risen so far that there is little value left in the market and investors want to see genuine dividend beats in an environment where the cut in 14 central bank interest rates so far in 2015 has reinvigorated the search for yield and income. (VIEW LINK)