The Match Out: A strong start fades ahead of RBA, ResMed Quarterly impresses

A positive start to the week and month for the ASX, though the local index finished a long way from early session highs today as investors position themselves ahead of the RBA rate decision due out tomorrow. Tech was the main laggard which was particularly disappointing given the strength seen in the Nasdaq in recent sessions. The Materials sector was also lacklustre, struggling for direction with most Asian markets closed for Golden Week. Also in the back of investor’s minds is the start of half-year reports for most major banks, the Big 4 made up around half of today’s gains ahead of NAB kicking things off on Thursday.

• The S&P/ASX 200 was up +25pts/ +0.35% to close at 7334
• Utilities (+1.26%) was best on ground today followed by Energy (+1.05%), Healthcare (+0.95%) and Financials (+0.78%).
• Tech (-1.36%) was the main detractor, joined by Materials (-0.42%) and Telcos (-0.2%) as the other sectors to fall on a green day.
• CBA +1.09% have fallen on their sword regarding house price forecasts, they had predicted a 15% decline but now say prices have bottomed (down ~10%), predicting gains of +3% in 2023 and +5% in 2024
• Centuria Industrial REIT (ASX: CIP) +0.32% has reaffirmed its funds from management guidance for 2023 at 17¢ and distribution guidance of 16¢ which puts it on a yield of 5.1%
• Transurban (ASX: TCL) -0.47% now expected an FY distribution of 58c, up from 57c, the 2^nd time they’ve increased guidance recently. Not enough to lift the share price today though
• Adore Beauty (ASX: ABY) -5.42% fell after saying revenue in the March quarter was down 3.3% to $41.3m – it’s becoming harder to get new customers while Kate Morris, who founded ABY, is moving into a complete non-exec role.
• Origin Energy (ASX: ORG) +0.48% upgraded guidance for their Energy Markets division on the back of cheaper coal and an improved contribution from their investment in Octopus Energy in the UK.
• RBA interest rate decision tomorrow, no change now the consensus while the US Federal Reserve is likely to raise rates by another 0.25% when they meet on Wednesday.
• With the RBA call tomorrow Portfolio Manager Harry Watt joined Ausbiz to talk about Consumer Stocks – Click Here to watch
• Gold softened in Asia by -0.4%, and most gold stocks followed suit.
• Iron Ore was closed in Asia today
• Chinese and Hong Kong indices were closed today for the start of Golden Week. The Nikkei was up ~1% at our close
• US Futures are marginally higher, S&P +0.08% and the Nasdaq +0.14%

ASX 200 Chart - Intraday

ASX 200 Chart - Daily

Resmed (ASX: RMD) $35.93

RMD +6.59%: A strong 3Q update from the maker of medical devices to treat sleep apnoea with a successful ramp-up of production and delivery to take advantage of the strong demand environment after their major competitor Philips still struggles following a product recall last year. Adjusted Earnings Per Share (EPS) for the quarter came in at $1.68, up from $1.32 at the same time last year and above the $1.61 consensus. Momentum in sales remains strong and supply chains continue to improve, and given rival Philips remains on the sidelines, pricing will remain favourable. The result was met with universal upgrades from analysts and that pushed the stock to new 12-month highs.

• We own Resmed in the Flagship Growth Portfolio with a 4% portfolio weighting

Transurban (ASX: TCL) $14.92

TCL -0.47%: the toll road operator upgraded guidance for the current FY today, though it failed to carry shares higher. The company now expects distributions for FY23 of 58cps, up 1c from prior guidance but up 41.5% from FY22. The upgrade translates to an expected final dividend of 31.5cps with management saying traffic numbers continue to show strong momentum. Earnings will also be supported by better-than-expected financing outcomes.

Broker Moves

• Regal Partners Ltd Rated New Neutral at Barrenjoey; PT A$3.70
• Pacific Current Rated New Neutral at Barrenjoey; PT A$8
• Navigator Global Rated New Overweight at Barrenjoey; PT A$2.10
• Whispir Raised to Overweight at Wilsons; PT 35 Australian cents
• Woodside Energy Cut to Neutral at Goldman; PT A$35.90
• NEXTDC Reinstated Buy at CLSA; PT A$14.50
• Mirvac Group Cut to Neutral at Citi; PT A$2.50
• Megaport Raised to Overweight at JPMorgan; PT A$7

Major Movers Today

Have a good night

The Market Matters Team

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