Pre-Open Data
Key Data for the Week
Australian Market
The Australian sharemarket closed less than 0.1% lower on Monday after further COVID-19 cases and lockdowns across the nation resulted in mixed performances among the sectors.
Travel stocks were the hardest hit, as further lockdowns are set to have an immediate impact, with Darwin’s lockdown extended to five days and Sydney entered a two-week lockdown. As a result, Webjet slumped 4.7% and Qantas fell 4.0%, while Flight Centre shed 3.5%.
The Information Technology sector also fell during the day’s trade, down 2.8%. The buy-now-pay-later providers were significantly weaker; Afterpay and Zip Co conceded 7.5% and 7.1% respectively, while Sezzle dropped 6.0%.
Gains were seen in the Consumer Staples sector as investors expect the supermarket giants to benefit from the current COVID lockdowns; Woolworths and Coles added 2.9% and 0.5% respectively. Retailer’s also extended gains, Kogan lifted 6.6%, after outperforming during lockdowns last year, and Cettire, an online luxury goods provider, finished 14.0% higher.
The Australian futures market points to a 0.21% decline today.
Overseas Markets
European sharemarkets closed lower on Monday, as bans on British tourists weakened travel stocks; Ryanair lost 2.4%, Air France gave up 4.1% and easyJet fell 5.8%. The Energy sector slipped, impacted by an increase in COVID-19 cases in Asia, which is set to decrease demand for oil in the short term as additional lockdown have been imposed. As a result, BP shed 3.2% and Royal Dutch Shell lost 3.4%.
US sharemarkets were buoyed by the Information Technology sector as both the S&P 500 and the NASDAQ hit record highs. Market giants Facebook and NVIDIA Corporation added 4.2% and 5.0% respectively, while Spotify lifted 1.9%.
By the close of trade, the Dow Jones fell 0.4% and the S&P 500 added 0.2%, while the NASDAQ rose 1.0%.
CNIS Perspective
As we near the end of the second quarter of 2021, US economic data remains strong, with personal consumption holding up extremely well despite the end of government assistance.
If we look at US S&P 500 companies that have issued earnings guidance this quarter, it shows this strength is flowing through to company coffers.
103 S&P 500 companies have issued earnings guidance throughout the quarter, which is about average. However, of those, 66 have provided positive earnings guidance, nearly double the average, with the Information Technology sector experiencing the highest number of companies with improved earnings guidance.
Assuming 66 is the final number of companies issuing positive earnings guidance, it will mark the highest number of S&P 500 companies issuing positive earnings guidance for a quarter since FactSet began tracking this metric in 2006, surpassing the current record of 59, which occurred in the previous quarter (Q1 2021).
This news provides a strong foundation heading into what could to turn out to be a bumper July reporting season.
Should you wish to discuss this or any other investment related matter, please contact your Investment Services Team on (02) 4928 8500.
Disclaimer
The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.
Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.