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Good numbers and a dovish Fed not enough

Tesla, man and machine

Stocks fell across Europe and the US overnight despite better US data and minutes from the most recent Federal Reserve meeting that stressed the central bank’s supportive stance. The US dollar rose in a sign of risk aversion, although the Fed’s words were enough to stall the global bond sell off.

The Australian company reporting season is in full stride with another huge day for releases. Biotech giant CSL’s shares are trading higher after the company revealed a 46% increase in profit after a 19% lift in sales. NZ casino operator SkyCity is a top performer, up almost 5%. Although profit fell 76%, the company maintained its guidance and appointed a new CFO. Sonic Healthcare is also higher after doubling net profit on the back of Covid testing.

Other solid reports include Seven Group (EPS $0.73, f/c $0.68), Abacus Property (EPS $0.23, f/c $0.08) and Star Entertainment (EPS $0.05, f/c $0.04).

Wesfarmers’ shares fell in early trading despite a better than expected 23% lift in profits for the half. Management pointed out that growth comparisons will suffer once the Covid period starts hitting the numbers in March. A lift in the dividend to 88 cents may ease investor concerns.

There are also a number of misses today. Mining services group NRW was thumped, its shares tumbling more than 20% after the company reported a 13% slide in profits despite a 45% lift in revenues. Others to miss the mark include Woodside after reporting a $4 billion loss on asset write downs associated with lower energy prices. Perpetual (EPS $0.54, f/c $1.07), Coca Cola Amatil (EPS $0.25, f/c $0.48) and Crown (EPS -$0.18, f/c $0.06) may also see share price pressures.

Tomorrow brings reports from Vocus (EPS forecast $0.08), Smartgroup (EPS forecast $0.48), Cochlear (EPS forecast $0.88), QBE (EPS forecast -$0.53) and Inghams (EPS forecast $0.10). Cryptocurrencies and individual stocks remain in traders’ sights.


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