The Match Out: ASX ends a tough week on the front foot, solid results from ANZ & Macquarie, CBA think rates have now peaked

The daily Match Out with Market Matters' James Gerrish for Friday 5 May
James Gerrish

Market Matters

A positive session to end a tough week for the market with some confidence stemming from solid results out of ANZ & Macquarie (MQG) despite the latter ending lower on the day. For the week, the ASX 200 lost 1.22% with the financials the biggest headwind, while it was pleasing to see a bounce back in the property sector despite the increase in rates – a sign that the market believes rates have hit their peak!

  • The ASX 200 finished up +27pts/ +0.37% at 7220
  • The Property sector was best on ground (+2.01%) today while Materials (+0.56%) & Staples (+0.52%) were also strong.
  • IT (-0.31%) and Consumer Discretionary (-0.22%) the weakest links.
  • CBA  +0.39% the only bank to correctly forecast this weeks 25bps interest rate hike, says the RBA is now done and dusted, rates will peak at 3.85% while they think the easing cycle will kick off late this year as inflation recedes at a faster pace than anticipated and unemployment rises more quickly than the RBA’s projections. A bold call.
  • ANZ  +1.45% strong 1H profit, EPS a small beat at $1.21/sh vs $1.20 expected. In line with NAB, they flagged further NIM pressure as banks compete for loans and deposits while the CEO talked to a soft outlook on weaker economic conditions. A better result than NAB, and a cheaper bank too, rallying strongly off early lows. The dividend of 81cps was solid (v 79c exp) while their capital position and asset quality remain solid.
  • Macquarie (ASX: MQG) -0.22%, a decent beat for the FY23 result, 10% earnings growth was ~6% ahead of consensus. Outlook was mixed, expecting costs (IT, headcount and bad debts) to increase following strong growth in the business, MacCap to rebound and Commodities to continue to perform strongly.
  • Block (ASX: SQ2) +2.92% rallied after upgrading FY outlook with its Cash App product performing well.
  • Virgin Money (ASX: VUK) -5.33% fell after reporting higher costs and impairments which more than offset a small net interest income beat, at their quarterly update overnight
  • Another good session by the Gold miners today, Ramelius (ASX: RMS) +5.56%, Evolution (ASX: EVN) +2.33%, Newcrest (NCM) +2.19% while Northern Star (ASX: NST) put on +1.51%
  • Gold was off US$4 in Asia drifting back from recent highs, settling at $US2046 at out close.
  • Iron Ore was ~3% lower in Asia today weighing on Fortescue (ASX: FMG) -0.15% & RIO -0.70%
  • Asian stocks were mixed Hong Kong up +0.70%, Japan closed while China was up +0.50%
  • US Futures are all up.
  • US Non-Farm Payrolls tonight with the market expecting +186k jobs to be added, down from 236k in March. The unemployment rate is expected to tick up to 3.6% (from 3.5%).

ASX 200

Sectors This Week

Source: Bloomberg

Stocks This Week

Broker Moves

  • Alumina Cut to Sell at Citi; PT A$1.50
  • Syrah Rated New Buy at Shaw and Partners; PT A$1.40 – Click Here for the Initiation Report
  • Evolution Energy Rated New Buy at Shaw and Partners
  • FleetPartners Group Ltd Cut to Neutral at Credit Suisse
  • Centuria Industrial Raised to Buy at Jefferies; PT A$3.43

Major Movers Today

Have a great night

The Market Matters Team

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James Gerrish
Portfolio Manager
Market Matters

James is Portfolio Manager & Primary Author at Market Matters, a daily investment report with over 2500 subscribers that offers real market insight. He is also Senior Portfolio Manager within Shaw and Partners heading up a team that manages...

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