The S&P/ASX 200 has had its best start to the year since 1986.
Mr Schellbach expects all eyes to be on post-new year trading updates as investors hunt for clues about the true health of the Australian consumer. He says the outlook is less rosy than the bulls suggest as cash buffers dwindle and households tighten their belts.“Share prices have rallied too hard – we believe they’re factoring in too much optimism,” he said.
“US earnings trends have been following the lagged impact of global hikes throughout 2022, and Australia is starting to follow,” analysts said.“Given risks, guidance upgrades may be limited and reporting season may again be characterised by EPS beats, but cuts to FY23 and FY24 forecasts. “Companies will have to drive growth through initiatives under their own steam, taking costs out, maybe making a small acquisition or crystallising value by selling some surplus assets to try to generate extra returns for shareholders.”has economists believing consumer euphoria is starting to weaken under the burden of higher rates.
“Our view is their share prices have run too hard ... the share prices have already factored in everything positive we can think of in terms of net interest margin expansion and now what we’ve got to start factoring in is the possibility that bad debts could pick up this year,” he said.Katana Asset Management’s Romano Sala Tenna has no doubt that company earnings will be hit by a substantial reduction in consumer spending over the next 12 months.
If America goes into a collapse, you'll see money flight returning home. That in turn, will see ASX fall. The question is... how are S&P Companys doing profit wise? Answer: Terrible.
Australia is a small country. The rise of the sharemarket has less to do with Corporate Performance then it does foreign influences ( like America ). If S&P crashes, so too will ASX. Australias Stockmarkets are just too small for anyone to care about.
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