Janet Yellen stayed on message in her monetary report to Congress, leaving the market to wonder whether it’s more dovish expectations were justified. This was the key macro theme for international markets with US bond yields and $US rising as investors contemplate the possibility that the pace of US monetary adjustment may  faster than they expect.

The potential for higher interest rates and improving margins drove support for bank stocks in US markets last night and CBA has done nothing to upset this with a solid half year profit result this morning. The result contained few major surprises with cost control being one of the highlights. CBA’s 0.6% improvement in cost to income ratio is allowing it to wring out modest profit growth in a tough environment for revenue.

Domino’s Pizza’s share price is under pressure despite upgrading its guidance for F17 profit growth from 30 to 32.5%. Expectations for this stock have been high and, good as the results were, they may have fallen short of some of the most bullish expectations. The stock is still trading at valuation multiples that make it vulnerable to any market nervousness.

 Domino’s has also provided improved transparency on the profitability of its franchisees, noting it expects record franchisee profitability this year and that the current store payback is 3-5 years. It’s also clear that Domino’s has been on the front foot conducting its own checks of franchisee wage payments which have revealed some problems However, the real test for markets will be whether the Fair Work Ombudsman uncovers any significant issues over and above these that put pressure on future costs.